Should the community wish to list FXS on Ethereum v3, Gauntlet recommends the following parameters.
Parameters
Parameter | Recommendation |
---|---|
Isolation Mode | YES |
Borrowable | YES |
Collateral Enabled | YES |
Stable Borrowing | NO |
Supply Cap (FXS) | 800000 |
Borrow Cap (FXS) | 500000 |
Debt Ceiling | $4M |
LTV | 35% |
LT | 45% |
Liquidation Bonus | 10% |
Liquidation Protocol Fee | 10% |
Reserve Factor | 20% |
Base Variable Borrow Rate | 0 |
Variable Slope 1 | 0.09 |
Variable Slope 2 | 3.00 |
Uoptimal | 0.45 |
LTV, LT, LB, Liquidation Protocol Fee, IR
FXS annualized historical volatility is roughly ~ 95%. We recommend initializing FXS with LT/LTV/LB/IR params in line with assets with similar risk profile set on Aave v3.
Initial Supply and Borrow Caps
FXS is a new asset listing, we use our conservative methodology to recommend initial supply caps. These caps are limited by FXS liquidity.
- FXS has a 25% depth value of ~$4.5M
- FXS circulating market cap is ~$425M
- FXS ADV is roughly ~$20M
Isolation Mode
In line with other assets of similar historical volatility and market cap, we recommend initializing FXS in isolation mode. We recommend a debt ceiling of $4M, limited by our initial supply cap.