Summary

The protocol is an LP with a leverage of 5 (MHR = 120%) in the USDC-jEUR pool on Polygon and Optimism. We propose to increase the leverage to 6.6 (MHR = 115%) to increase the virtual liquidity of jEUR on these networks.

Details

Decreasing the Minimum Health Ratio from 120% to 115% will increase the virtual liquidity by $48K on both networks.

It will increase the risk: at 120%, EURUSD requires a +18.5% movement to liquidate the LP; at 115%, EURUDS requires a +12.5% movement.

Motivation

Currently, the utilization ratio of the USDC-jEUR Liquidity Pools on Optimism is 100% and is close to 100% on Polygon, preventing people to buy more jEUR from the protocol.

We will launch the Credit Line, allowing people to borrow jEUR, and we will increase the cross-chain liquidity, but in the meantime, increasing the liquidity on the primary market is a necessary first step.

Vote

YES, increase the virtual liquidity NO, do not increase the virtual liquidity