Given MAI/MIMATIC price drop to ~$0.72 over the past 24 hours and its inability to regain peg for the past few months, Gauntlet recommends to begin deprecation of MAI/MIMATIC. We aim to do so by reducing LT and increasing borrow rates to incentivize repayment.
Currently, MAI/MIMATIC is frozen with LTV set to 0.
Recommendations
Lower non-emode LT on Avalanche, Arbitrum, Polygon, Optimism v3
Conservative
| chain | asset | old_LT | new_LT | liquidatable_accounts |
|---|---|---|---|---|
| avalanche | MAI/MIMATIC | 0.8 | 0 | $200 |
| arbitrum | MAI/MIMATIC | 0.8 | 0.73 | 0 |
| polygon | MAI/MIMATIC | 0.8 | 0.65 | $30 |
| optimism | MAI/MIMATIC | 0.8 | 0.8 | 0 |
Aggressive
| chain | asset | old_LT | new_LT | liquidatable_accounts |
|---|---|---|---|---|
| avalanche | MAI/MIMATIC | 0.8 | 0 | $200 |
| arbitrum (*) | MAI/MIMATIC | 0.8 | 0 | $1,500 |
| polygon | MAI/MIMATIC | 0.8 | 0 | $1,000 |
| optimism (*) | MAI/MIMATIC | 0.8 | 0.65 | $1,900 |
( * ) Any LT reduction between 7% to 80% will yield $1500 in liquidatable accounts for Arbitrum.
( * ) Any LT reduction between 1% and 50% will yield $1900 in liquidatable accounts for Optimism.
Adjust Uopt to 0.45, Slope 2 to 300%, RF to 95%
| chain | supplied | borrowed | current_util | current_borrow_rate | recommended_uopt | recommended_slope2 | new_borrow_rate (%) |
|---|---|---|---|---|---|---|---|
| polygon | 533630 | 513560 | 96% | 65% | 0.45 | 3 | 282.18 |
| arbitrum | 22300 | 20000 | 90% | 41% | 0.45 | 3 | 249.45 |
| optimism | 370000 | 354970 | 96% | 65% | 0.45 | 3 | 282.18 |
| avalanche | 10940 | 9200 | 84% | 19% | 0.45 | 3 | 216.73 |
Next steps
Welcome community feedback and aim to put up snapshot with conservative and aggressive options on 2023-10-16.
Other considerations
Removal of MAI/MIMATIC from emode on Polygon v3 and Avalanche v3.
- MAI in emode presents the most risk on Polygon v3 due to large supply.
- drop to ~$0.72 has caused roughly ~$300 in insolvencies, mostly from this user DeBank | The Web3 Messenger & Best Web3 Portfolio Tracker
- LTV 0 does not prevent borrowing in emode.
- Gauntlet has previously recommended removing MAI from emode on Avalanche v3 and Polygon v3 due to uncertainty regarding composition of MAI backing. We recommended this back in our initial Stablecoin emode snapshot, and again here.
- Our estimated impact is roughly ~ $70k in forced liquidations and 6 accounts with >$10 in supply. However, there may be additional nuances that need to be considered for asset removal from e-mode. We are continuing to explore how this may be done.