Activate the svZCHF/crvUSD LlamaLend v2 Market
Summary
A Llamalend V2 market has been deployed on Ethereum with Frankencoin’s svZCHF (savings-vault-ZCHF) as collateral, and crvUSD as the borrowed asset.
This proposal:
- activates borrowing with an initial cap of 500,000 crvUSD
- sets the admin percentage to 10%
- sets the liquidation discount at 2.8%
- sets the loan discount to 4.8%.
- adds the market’s gauge to the Gauge Controller
Collateral overview
ZCHF is an overcollateralized, Swiss-franc-denominated stablecoin issued through the Frankencoin protocol. svZCHF is an ERC-4626 representation of ZCHF deposited in Frankencoin’s savings module. The underlying ZCHF remains in the savings module and savings yield is paid from Frankencoin’s equity pool, which consists of protocol earnings and ZCHF contributed through the issuance of Frankencoin Pool Shares.
svZCHF therefore provides on-chain, yield-bearing exposure to the Swiss franc through a relatively simple savings structure. The proposed 500,000 crvUSD initial borrow cap and conservative risk parameters provide a cautious starting point for the market.
Market Addresses
| Contract | Address |
|---|---|
| Vault | 0xCb6e2c3d9Dba8fe6245B2c969320F2485dFce2FD |
| Controller | 0xFd85e847cDd2549f213E276e4B57B0690169F043 |
| AMM | 0xc8C469e3964707295302299DBbF88F13EB9C40a3 |
| Oracle | 0xa44b313A8D3Fedc6F024EC25CfBF2E15487c1951 |
| Monetary policy | 0x547De3c2E2960Cc7879EE6626F2763cbc24d4921 |
| Gauge | 0x02385a45868ad548C00609701b35fC4488199DD9 |
Proposed parameters
| Parameter | Proposed value |
|---|---|
| Borrowed asset | crvUSD |
| Collateral | svZCHF |
Band Width Factor (A) |
180 |
| Base fee | 0.05% |
| Liquidation discount | 2.8% |
| Loan discount | 4.8% |
| Borrow cap | 500,000 crvUSD |
| Admin percentage | 10% |
Vote specification
All LlamaLend V2 markets are deployed with borrowing disabled. This vote calls the LlamaLend Markets Configurator to activate borrowing, set the admin percentage, and update the borrowing discounts. It also calls the Gauge Controller to add the market’s gauge so it can receive future CRV emissions.
Calls to the LlamaLend Markets Configurator at 0x6065858d0eF0AA240DFdf6f1A0B2ae34B41f49bC:
set_borrow_cap(0xFd85e847cDd2549f213E276e4B57B0690169F043, 500_000 * 10**18)set_admin_percentage(0xFd85e847cDd2549f213E276e4B57B0690169F043, 10**17)(10%)set_borrowing_discounts(0xFd85e847cDd2549f213E276e4B57B0690169F043, 48_000_000_000_000_000, 28_000_000_000_000_000)(4.8% loan discount, 2.8% liquidation discount)
Call to the Gauge Controller at 0x2F50D538606Fa9EDD2B11E2446BEb18C9D5846bB:
add_gauge(0x02385a45868ad548C00609701b35fC4488199DD9, 0, 0)(gauge type 0, zero initial weight)
Parameter selections
The LLAMMA parameters were selected using the following simulation settings:
- 18 months of constructed ZCHF/USD one-minute oracle data derived from ZCHF/crvUSD and aggregate crvUSD/USD prices
- EMA half-life = 3,603 seconds
- Dynamic-fee multiplier = 0.25
- 4 bands
- External arbitrage fee = 0.05%
Band width factor (A) selection
To select A, llamma-simulator_v2 was used to sweep a broad range of base fees and A values. The resulting losses were used to calculate the liquidation discount required for each parameter pair, and the value that minimized the required discount was selected.
Each parameter pair was evaluated using 100,000 randomly sampled 1-day windows.
The maximum-loss results are shown below:
The corresponding liquidation discounts are shown below:
The liquidation discount is minimized at A = 180.
Base fee selection
The base fee should minimize average soft-liquidation losses over a wider time window without materially worsening the maximum loss, because many borrowers who enter soft liquidation remain there for 3+ days.
At the selected value of A, each base fee was evaluated using 100,000 randomly sampled 3-day windows, and the fee with the lowest average loss was identified:
The average loss is minimized at a fee of 0.051%. At A = 180, the 1-day maximum loss at this fee is also very close to the minimum observed at a fee of 0.034%. The selected fee is therefore rounded down to 0.05%.
Liquidation discount selection
With A and the base fee selected, every eligible 1-day window in the 18-month dataset was evaluated. The maximum raw loss was 1.2%, corresponding to a liquidation discount of 2.3%.
However, as a supplemental long-range check, the final parameters were also evaluated against 6 years of CHF/USD data. The maximum raw loss over a 24-hour window was 1.7%, corresponding to a 2.8% liquidation discount. Because the liquidation discount is intended to protect the DAO against bad debt, this proposal adopts the more conservative 2.8% value instead of 2.3%.
Loan discount selection
LlamaRisk’s methodology applies minimum loan-discount margins of 0.5% for correlated pairs and 3.0% for uncorrelated pairs onto liquidation discount figures.
ZCHF/crvUSD does not fit neatly into either category. It is not tightly pegged, but as a fiat FX pair it has exhibited materially lower volatility than typical uncorrelated crypto-asset pairs. To reflect this intermediate risk profile, this proposal applies a 2.0-percentage-point margin to the 2.8% liquidation discount, resulting in a 4.8% loan discount.
Borrow cap calculation
At Ethereum block 25,686,562 on 5 August 2026, the two ZCHF Ethereum liquidation routes had the following executable capacity before average price impact exceeded 2.8% (liquidation discount):
| Route | Executable capacity (2.8% price impact) |
|---|---|
| Curve ZCHF/crvUSD | 84,322.04 ZCHF |
| Uniswap ZCHF/USDT → Curve USDT/crvUSD | 463,064.43 ZCHF |
| Total | 547,386.47 ZCHF |
The cap is calculated from these routes using LlamaRisk’s fresh-market sizing method. Applying the proposed 2.8% liquidation discount and 4.8% loan discount, a 10% price stress, a 1.5× liquidity-contraction stress, and 0% assumed soft-liquidation efficiency produces a calculated cap of 563,000 crvUSD.
This proposal carries that result over as an initial 500,000 crvUSD borrow cap for the svZCHF market. The cap is deliberately conservative and should be reviewed by the incoming risk team once selected.
Monetary policy selection
The deployed HyperbolicMP targets 80% utilization and a 5.3% borrower APR at target utilization. The corresponding supplier APR is approximately 3.8%. The monetary policy is shown below:
