Summary

A proposal to adjust three (3) total risk parameters, including LTV, LiquidationThreshold, and reserve factor across nine assets in the Trava Lending Pool.

After almost seven months since its launching, over 15 assets have been supported in the Trava Lending Pool. In addition, some of the most important risk parameters have been set to ensure stability, including LTV, threshold, bonus, reserve factor, etc. This set of parameter updates seeks to maintain the overall risk tolerance of the protocol while making risk trade-offs between specific assets.

To assure stability while benefiting users at the same time, we propose to change some of these parameters. Given that the Trava Governance is gradually generating to give users the power to decide, we would like to open this snapshot.

Motivation

This proposal is driven by the goal of reaching an optimization function that balances three core metrics: insolvencies, liquidations, and borrow usage. Parameter recommendations seek to optimize this objective function, including LTV, the liquidation threshold, and the reserved factors.

The modification in these three parameters is for nine main assets in the lending pool, consisting of DAI, USDC, USDT, WETH, BNB, BUSD, AAVE, and ADA.

Each asset in the Trava Lending pool has specific values related to its risk, influencing how they are supplied and borrowed. The table below summarizes the latest values affecting the total locked value.

When market conditions change, risks change, and so we are continuously monitoring the assets integrated into the protocol which sometimes requires quickly adapting the risk parameters.

We have tested the model parameterization finding a low risk of insolvency and suggesting some minor changes to reduce it further. For that reason, we propose some modifications in three risk parameters as below:

• LTV (Loan - to - value): is the ratio of your loan to the value of your collateral.
• The liquidation threshold: is the percentage at which a loan is defined as undercollateralized.
• The reserve factor: is the percentage of fees paid to Trava protocol. If the reserve factor is at 10%, that will imply that 10% of the interest paid on the asset is for Trava Lending Pool.

By changing the risk parameters (Increase the LTV, liquidation threshold, and reserve factor), we look forward to optimistic changes as making the lending pool a safer place and also benefit users with more chance to borrow assets.

Voting options

Whatever roles you play, a vote and a say matter.

By generating the Trava Governance, we give our community the chance to speak up for the long-term development of the Trava protocol.

Cast your now and decide:

YES: CHANGE THE RISK PARAMETERS NO: DO NOT CHANGE THE RISK PARAMETERS