P-ratio 100 - 400

The X-files
1

Hello Lina fam.
I want to make a proposal about the p-ratio.
How about changing it to 100 (for liquidation) and 400 (for target).
What do you think guys ?

2

would like to hear @Majin s opinion regarding the subject. Debt pool is more serious matter than burns its the root of all of the rewards.

3

I don’t know all of the mathematics behind the P-Ratio/Debt Pool. I know you have to have a liquidation mechanism though to have “infinite liquidity”. I am not the person to ask if this is feasible or not as I haven’t dug into the maths.

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4

This would be a really bad idea. The P-Ratio is the amount of money in $LINA with which any staker secures the amount of â„“USD she or he builds. This means the target at the moment is, that any staker secures any â„“USD with 5x $LINA and minium 2x $LINA before she or he gets liquidated.

With the proposed target and liquidation values, this would mean, anyone can build more â„“USD, which would result in an increased supply of â„“USD and the peg would probably go further down. Additionally this would cause, that a liquidation would happen when the security of the staker would be below 1x. In case of liquidation this would mean the staker has unbacked dept on the exchage, which would be really bad for the stability of the protocol.

This Proposition should not go to voting, because it would bring serious risks to the stability of the protocol and I would whish, that the council takes its liablility to these kind of propositions and take their veto.

In the current state of the market with the problematic â„“USD peg an increased liquidation limit (for example 300) and an increased target ratio (for example 800) would make more sense.

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5

Hey Legacy,
Many thanks for your proposal. I feel you, an ability to claim at a p ratio of 400 instead of 500 sure would be nice. But, alas, this one is just not technically viable due to the mechanics of the debt pool and the requirement of the 1/5 ratio (20%) on debt creation.
Nice try though!
I’m moving this proposal out of this section for now.
Best, JP

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