Increase iUSD MCR to ensure protocol solvency

[defiroose]

In process the team is designing dynamic MCR and will propose it to the DAO in the future when it’s ready. It’ll help alleviate some of these concerns. Currently the overall CR of the protocol is safe. Liquidations are working as expected.

[Sir_CryptoConrad_Kni]

That is true. We could also do a gradual increase per epoch by 5%.

[Kobov9000]

To me 110% looks optimal, preserves a good balance with reasonable risk involved. I would love to see a prove against that, it is in all of our interest.

[zygomeb]

Cross-Linking

Increase iUSD MCR to 120%

Because of Indigo’s and Cardano’s efficiency, iUSD was able to launch with a MCR of 110%. This helped bootstrap liquidity by minimizing the borrowing cost. Now that iUSD liquidity has been bootstrapped and the Stability Pool saturation is roughly 96%, we should increase the iUSD MCR to 120%. This in effect increases the borrowing cost which will help reduce the price spread of iUSD in the DEXs.