Increase minimum collateral ratio on USDf

imho keeping the minimum collateral ratio at 0% is just a bad idea
100% algo stables don’t work, that experiment is already done

If anything in the beginning the minimum collateral ratio should be very high like 90% if not even higher
and as the protocol grows and GAIA marketcap is large we can look to make it lower

The current issue is as the min ratio is 0% having it reach high GAIA collateral is bad as we saw recently with 60-40 USDC-GAIA ratio

GAIA being small market cap has thin books and it will get dumped to the ground as people try to redeem to achieve peg on top of that as people get more GAIA when they redeem they have to factor in GAIA slip when doing the arb which is high on a small marketcap token like GAIA

4 Likes

The ratio shouldn’t decrease with 0.5% every hour when it’s above pegg. That’s way too fast!

2 Likes