Summary:
Set Parameters on sDOLA-long LlamaLend market MonPol:
| Parameter | Current Value | Proposed Value |
|---|---|---|
| Alpha (min multiplier) | 0.2 | 0.5 |
| Beta (max multiplier) | 7.2 | 5 |
| Target Utilization | 85 | 90 |
| Rate Shift | 0 | 0 |
Abstract:
The market’s MonPol parameters determine the responsiveness of the rate curve to changes in market utilization and as a function of the target rate assigned by the sDOLA APR. The changes proposed here will reduce sensitivity to utilization changes above and below the target utilization. It also increases the target utilization from 85% → 90%, the utilization where borrow rate == sDOLA APR.
Motivation:
It has been observed that the EMAMonetaryPolicy improves lend market responsiveness for yieldbearing stabelcoin markets. There is an opportunity now to refine MonPol parameters to improve market performance further in terms of returns to lenders and stability for market participants. Compressing the min/max rate multipliers will improve rate stability, creating a more predictable borrow experience for leverage loopers. Increasing the target utilization will increase returns to lenders without substantially increasing the risk that markets will experience prolonged periods of illiquidity.
Specification:
Given current market parameterization and an sDOLA APR ~7.2%, the market exhibits the following rate curve:
The adjust parameters exhibit the following rate curve:
Vote Actions
SDOLA_MONPOL = '0x6640500C9be3DB65aE7e235A91E739Bc7d1C4Dc0'
ACTIONS = [
(SDOLA_MONPOL,
"set_parameters",
900000000000000000, # TARGET_U
500000000000000000, # LOW_RATIO
5000000000000000000, # HIGH_RATIO
0, # RATE_SHIFT
)
]