Introduction:
Given the recent deterioration in market conditions, with iUSD now trading at $0.87, I propose a more assertive adjustment to the Minimum Collateral Ratio (MCR) for iUSD. This revised proposal suggests increasing the MCR to 150% as a strong immediate response, followed by a gradual rollback plan to balance the market’s needs and our commitment to the peg.
Rationale:
- Immediate Strong Response: The increase to 150% MCR is intended to immediately stabilize iUSD and send a clear message about our commitment to maintaining the peg.
- Gradual Rollback Plan: To ensure market adaptability and prevent long-term over-restriction, we propose a phased rollback of the MCR.
Proposal Details:
- Immediate Increase to 150% MCR: Implement an immediate increase in the MCR for iUSD from 120% to 150%.
- Rollback Plan:
- Reduce the MCR by 5% every 2 epochs for the next 8 epochs (total of 40 days).
- Final MCR target after rollback is 130%.
- Peg Maintenance Requirement: The rollback steps are contingent on iUSD maintaining its peg. If the peg is not sustained, reassessment and potential adjustments to the plan will be made.
Anticipated Outcomes:
- Immediate Market Impact: A swift response to realign iUSD’s value with its peg.
- Controlled Adjustment Period: The gradual rollback allows the market to adapt and stabilize.
- Long-Term Stability: This approach aims to balance immediate needs with the long-term health of the iUSD within the Indigo ecosystem.
Conclusion:
This urgent proposal addresses the current critical state of iUSD and requires swift community action. We seek your support for this strategic approach, which is vital for maintaining the stability of the Indigo Protocol ecosystem. Your active participation and approval are crucial in this decisive moment.