@Doo_StableNode, your concern is valid, on-chain liquidity is paramount for any asset that’s listed as collateral.
However, as @fig mentioned, all that has been proposed is one of the following:
- A v2 listing with an LTV of 0%, meaning it would not initially be listed as collateral (as Gauntlet has previously suggested for initial listings)
- Or, upon contracts going live on mainnet, a v3 listing with parameters agreed upon by the community and risk advisors. As @MarcZeller suggested above, launching on v3 in isolation mode would help keep the protocol as a whole safe. Additionally, with supply caps in v3, the protocol can actively govern just how many deposits they’re willing to accept relative to liquidity.
As on-chain liquidity improves, the community (ourselves included) can help monitor and discuss adjusting these parameters to ensure the protocol is safe and any use as collateral is well managed.
Thanks for your engagement!