Increasing the LTV ratio for ETH and BTC

The LTV ratio is the Loan To Value ratio which is the maximum loan Balanced will allow a depositor to take for that collateral.
At the moment the LTV for ICX when minting bnUSD is 66.67%, ETH 30%, and BTC 20%.

These values made sense initially as the bridging was new and unproven. Now with a few months with it being active, I think we can safely raise the LTV.

If people are in agreements we should also discuss the exact values. Normalising all 3 at 66% sounds reasonable or 50% for BTC/ETC?
Is there an argument that ~66% is too conservative?
There is no real need for Balanced to ‘protect the user from themselves’ just that in the event of a liquidation there is enough time/buffer for the liquidation process to play out without putting the platform at risk.

In that respect, do we need to consider current liquidity in LPs when determining the LTV ratio for a collateral? I am actually not 100% sure about the ramifications of liquidations if the pool is shallow. I’m thinking it shouldn’t matter as long as the bridges are fine?


I think we should be fine with 66% for BTC and ETH. I guess arguments can be made that is conservative. Since BTC and ETH moves slower and steadier than ICX, missing the liquidation/redemption window should be quite low risk for liquidators and then also the platform. But as you mentioned this only goes if the bridge is live, there are not enough liquidity yet in ETH/BTC to cover large liquidations.

Protecting users from themselves is a marketing discussion. People get angry when they lose the money and most often they are going to blame the platform. Anyway i feel 66% is a pretty good middle ground.


I’d agree to 66% locking-LTV for both BTC and ETH. Should we also address the debt ceilings for each asset on this proposal? @Andell do you happen to know what they are? Debt ceiling is what keeps Balanced safe from a bridge hack for the most part.

They are at 250K each, not even close to the amount of debt we have just yet. Not sure if there is a need to increase them.

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