Summary
A proposal to update GNO’s liquidation threshold, LTV, and debt ceiling on V3 Gnosis.
Motivation
GNO has an average market cap of $445M and a daily trading volume of $3M over the last 180 days.
Over this same timeframe, the largest single-day drop was 9.11%, with a daily annualized volatility of 63.75% and a 30-day daily annualized volatility of 94.46%.
Positions Analysis
There is currently one major user utilizing GNO as collateral on V3 Ethereum, borrowing ~$845 in USDC and WXDAI against his 18K GNO collateral, accounting for over 84% of the debt ceiling. The user’s current health score is 2.86.
Liquidity
GNO liquidity has remained stable since March 1, with more liquidity when paired with WETH than USDC.
Recommendations
GNO is currently listed with relatively conservative parameters: 36% LT and 31% LTV. We recommend an increase to 50% and 45%, respectively. Following observations at these levels and utilizing our simulation platform, these parameters may be further optimized.
Given current market conditions and utilizing our Isolation Mode Methodology we recommend doubling the debt ceiling to $2M.
Specification
| Asset | Parameter | Current | Recommended |
|---|---|---|---|
| GNO | LT | 36.00% | 50.00% |
| GNO | LTV | 31.00% | 45.00% |
| GNO | Debt Ceiling | $1,000,000 | $2,000,000 |
Next Steps
We invite a community discussion around the proposed parameter updates and, barring community objection, will follow up with a Snapshot vote in five days.
Disclaimer
Chaos Labs has not been compensated by any third party for publishing this ARFC.
Copyright
Copyright and related rights waived via CC0