Due to Badger’s small market cap (<$60M), Chaos Labs does not recommend listing it as collateral.
Tokens with a small market cap are highly susceptible to market manipulation and therefore pose a risk to the protocol by being enabled as collateral. Isolation mode with tight debt ceilings is a mechanism designed to allow the listing of long-tail assets, limiting the protocol exposure and potential bad debt. However, this improved security mechanism should not mean adding any asset without community alignment on the rationale and/or revenue potential when listing different assets.
Could @Llamaxyz share the rationale, revenue, and growth considerations for listing $BADGER? Additionally, what is the motivation to allow it to be used as collateral?
The community will be better informed about the asset listing process with a better understanding of the above.
Although Chaos’ recommendation is not to enable the asset as collateral, an option for listing the asset in isolation mode with a proposed debt ceiling should be presented to the community to accommodate a “risk-on” option.