Proposal to Optimize Algorithmic Interest
As fiat-backed stablecoins gain traction and stable swaps on DEXs continue to mature and gain liquidity, market dynamics for synthetic assets are evolving. In this context, it is timely to revisit and optimize Indigo’s algorithmic interest rate caps to remain competitive and encourage continued protocol growth and user adoption.
Borrow rates across lending protocols have consistently ranged between 30–35% and rarely sustained levels above 40%, even during periods of high volatility. We believe that lowering the interest cap at this stage presents minimal risk and can help further incentivize adoption and healthy CDP activity across iAssets.
For other iAssets, it is also recommended to lower the cap by 5% for further observations.
Current parameters for iUSD
Base int : 10%
NTCR : 200%
CTCR : 350%
Upper Limit int : 40%
Max Disc Factor : 95%
Buffer rate : 5%
Proposed revised parameters for iUSD:
Base int : 10%
NTCR : 200%
CTCR : 350%
Upper Limit int : 35%
Max Disc Factor : 95%
Buffer rate : 5%
Current parameters for iBTC:
Base int : 10%
NTCR : 170%
CTCR : 250%
Upper Limit int : 30%
Max Disc Factor : 95%
Buffer rate : 5%
Proposed revised parameters for iBTC:
Base int : 10%
NTCR : 170%
CTCR : 250%
Upper Limit int : 25%
Max Disc Factor : 95%
Buffer rate : 5%
Current parameters for iETH:
Base int : 10%
NTCR : 170%
CTCR : 250%
Upper Limit int : 20%
Max Disc Factor : 95%
Buffer rate : 5%
Proposed revised parameters for iETH:
Base int : 10%
NTCR : 170%
CTCR : 250%
Upper Limit int : 15%
Max Disc Factor : 95%
Buffer rate : 5%
Current parameters for iSOL:
Base int : 10%
NTCR : 170%
CTCR : 250%
Upper Limit int : 20%
Max Disc Factor : 95%
Buffer rate : 5%
Proposed revised parameters for iSOL:
Base int : 10%
NTCR : 170%
CTCR : 250%
Upper Limit int : 15%
Max Disc Factor : 95%
Buffer rate : 5%
Conclusion:
These adjustments aim to fine-tune the protocol’s risk-reward balance while supporting the broader adoption of Indigo’s synthetic assets. We invite the community to engage in discussion, share feedback, and help shape the future direction of Indigo’s interest framework through governance participation.