Hi folks,
In the current market conditions, the focus should be on risk management rather than capital efficiency. As you mention AVAX is already among the most capital efficient collaterals. Market risks have increased in the last couple of months, in particular volatility.
Based on the current liquidity on the market, a 5% increase gives users $4.1M ($82M * 5%) additional borrowing power while selling just $4.1M AVAX to USDC will have 13% slippage on Avalanche 1inch.
I dont really understand the reasoning behind this ARC, could you please justify how the market metrics of AVAX have improved to support more aggressive parameters?