p25-2 Choose leverage for LP position on Optimism

As proposition 25 seems very liquely to be accepted the DAO must choose a leverage for the LP position. This leverage will be used for the jEUR pool if p25 is accepted.

Basically the leverage defines the overcollat ratio upon minting. Thus the amount of jEUR that can be minted as well as the APY recieved on AAVE. The higher the leverage, the more exposed to EUR/USD price fluctuation.

LPs have been using a 10x leverage so far.

Note that compared to current LPs the DAO has a lot of inertia and not a lot of liquidity if addition of collateral is needed. Thus choosing a high leverage can be very risky if EUR/USD goes up.

Few examples :

Leverage 1x : jEUR has a 200% overcollat upon minting and 40k$ of jEUR can be minted with the 40k$ of USDC from treasury ≃ 6% APY on AAVE if all jEURs are minted !

Leverage 10x : 110% overcollat, 400k$ jEUR minted ≃ 30% APY

Leverage 50x : 102% overcollat, 2M$ jEUR minted ≃ 150% APY. If EUR goes up 2% against USD = REKT