[TEMP CHECK] Enable Metis as Collateral on Metis Chain


Gauntlet has been monitoring METIS liquidity of late given the recent surge in METIS price. In particular, it is important to ingest data over a long enough time frame rather than focus on the short term price movements.

Our analysis for enabling an asset as collateral considers data including the following to assess the risk factors when recommending parameters:

  • Market cap of the token
  • Total supply
  • Largest liquidity sources (exchanges including CEX and DEX)
  • Average daily trading volume on CEX and DEX
  • Concentration Risk
  • Other DEX metrics

Metis’ market cap of $408M and 30-day-average daily volume across multiple exchanges exhibits signals of liquidity and market interest for the asset. The asset’s level of liquidity in the market reduces the risk of price manipulation attacks.

Metric Value
Market Cap $414mm
Total Supply 10,000,000
Circulating Supply 5,265,547
30d AVG Volume 4,405,895

The largest liquidity sources for METIS are Uniswap (DEX) and OKX (CEX).

Uniswap OKX
TVL $4.3mm -
24h Trading Volume $1.6mm $3,967,883


Should the community wish to enable METIS as collateral, we provide the following recommendations, noting conservative risk parameters and minimal capital efficiency.

Parameters Gauntlet Recommendation
Isolation Mode Yes
Enable Borrow Yes
Enable Collateral Yes
Loan to Value 30%
Liquidation Threshold 40%
Liquidation Bonus 10%
Liquidation Protocol Fee 10%
Debt Ceiling $1M

If a METIS supplier were to max out the $1M debt ceiling and become liquidatable at a 40% LT, $2.5M METIS collateral would be collateralized against $1M stablecoin. Currently a $2.5M METIS / m.USDC swap would incur about 65% DEX slippage. While high, the conservative LTV/LT parameters provide a large buffer to insolvency during liquidations.

Given the m.USDC incentives on v3 Metis, this debt ceiling may be utilized quickly, noting that m.USDC borrowers may solely be interested in receiving METIS rewards.