Proposal to Optimize iUSD Algorithmic Interest 0525

Temp Check Discussion
1

Proposal to Optimize Algorithmic Interest

As Cardano DeFi matures, it’s important that Indigo’s parameters remain competitive without being overly aggressive. Borrow rates across lending protocols have been trending downward, now averaging around 30%. iUSD has also maintained a 5% overpeg, signaling strong demand.

To stay aligned with market conditions and further encourage further growth, this proposal recommends reducing the upper interest limit for iUSD from 35% to 25%. All other parameters remain unchanged.

Current iUSD Parameters

  • Base Interest: 10%

  • NTCR: 200%

  • CTCR: 350%

  • Upper Interest Limit: 35%

  • Max Discount Factor: 95%

  • Buffer Rate: 5%

Proposed Parameters

  • Base Interest: 10%

  • NTCR: 200%

  • CTCR: 350%

  • Upper Interest Limit: 25%

  • Max Discount Factor: 95%

  • Buffer Rate: 5%

This change reflects market trends and presents a low risk to the protocol, while maintaining competitive rates and improving capital efficiency.

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