Proposal #113

Increase HDX money market cap to 60M HDX

Democracy
11mos ago
5 Comments
Tabled

In Interlay ref 95 we opened the HydraDX (now Hydration) HDX money market on Interlay. We originally set the lending market cap at $1M, but that was when HDX was like $0.02 to $0.035. The cap on the HDX lending market is 37.5M HDX which is currently $555,975. Since then, HDX lenders have filled up the supply cap on HDX (currently around $556k of HDX). You can currently trade 7.2M HDX ($106k) before 9% slippage. Usually we multiply by 6x to 10x to determine the max money market size, so I think it's reasonable to increase the HDX money market ceiling to 60M HDX ($900k) which is 8.5x the 9% slippage amount.

Meanwhile, we haven't yet seen much borrowing from the HDX market. Therefore I propose reducing the APR to incentivize more borrowing.

  • base rate decrease 0.5% -> 0% APR
  • jump rate decrease 4.5% -> 2% APR
  • full rate decrease 50% -> 25% APR
  • target utilization stay the same at 80%.

HydraDX has also rebranded to Hydration so update the CoinGecko ticker to point to https://www.coingecko.com/en/coins/hydration
Thanks to Founder Dom for double-checking the referendum. Even though the CG URL has changed, the "APP ID" of "hydradx" is still the same.

This proposal includes compensation for market analysis, proposal creation and testing. 3 hrs = $300 or 15030 INTR at $0.01996/INTR. It was tested using Chopsticks.

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While I understand the intention behind this referendum is to add more liquidity, adding volatile tokens as collateral increases the overall risk of the Interlay ecosystem and thereby the risk associated with iBTC. Therefore, I am voting Nay on this referendum.

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Hydration and its holders are doing a great service for the eco providing such nice APY on HDX and vDOT, also for INTR. Increasing the lending cap for HDX is something we can offer in return. This way more HDX holders can borrow on Interlay, which is also good for Interlay. Moreover, the Hydration team and project are solid. If we fear risks we can not do much in crypto.

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