Given the high demand of bnUSD we’re all experiencing I think now would be a good time to increase LTV to allow people to unlock their positions and also mint more bnUSD to soak up the demand.
I propose we increase LTV to 35%. If the peg flips in the other direction again, I would like to discuss whether or not it makes sense to lower LTV again. I’m not necessarily convinced that’s the case given that rebalancing takes care of this naturally.
Could we do an incremental walk up to 35% vs straight to it. Use metrics to show its working or not vs jump 10 points only to rebalance back down. For example, maybe up 3% at a time (starting @ 28%) with data driven hurdles triggering follow on increases and a cap @ 40% vs straight to 35%.
Aligned. 3 may be too little, 10 too much. Avg Peg over period, loan uptake maybe ratio one to another… Are there current metrics used or emerging? Overall, the idea is more of an (incremental) approach vs one shot. Thanks
Completely agree, as it can be unnerving to watch loan amount increase, liquidation price come up, and collateral being locked at the same time. Obviously best practice is to have ICX on the sideline, but based on talk around the socials I don’t think everyone does that.
Personally I think the LTV should have just been left at 35% to begin with so, despite the peg stabilizing, I’m still for this change.
I understand the reasoning behind lowering it, but I feel like the problem with rebalancing continues to be one of misunderstanding, rather than a mechanical one. Most people are concerned about adjusting the LTV because of a fear of rebalancing, but the rebalancing process is generally actually useful and has yielded positive results for me over the long term and I suspect that is true for most people by design.
Besides, 35% LTV is on par with similar products in the space!
Average rebalance purchase price was somehow $1.58 even though site was showing mid 1.20’s on sicx bnusd post snapshot. Todays rebalance sales were $1.35 average. I’m not sure how many are going to be selling at a loss once their collateral unlocks assuming they were not close to 25% LTV at snapshot. The 30% LTV may be the right thing, but it’s reactionary at the moment for a red herring triggered by CEX deposit closures and balanced selling.