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.

[@wdAV...HYxD](wdAVLsLnMxnqneY6zsdJG8KeqxvR9N3ju5Da6sASojWDEHYxD-interlay) hey sir, could you give a little more detail on this? to better understand the risk with ibtc? 

[@Jose.Crypto](wdCth6mYwN2JqwdNSF1Kci368PLjvC8ZRpTgiNRPZrT3cvGj8-interlay) It's risk compounding on the no-free-lunch principle. Using a volatile asset as collateral increases the risk for holders of less volatile lent assets such as stablecoins, DOT, or iBTC. If HDX faces a black swan event, the effects will be felt more strongly on Interlay if there is more HDX serving as collateral for debt within Interlay's debt markets. I don't believe that the gain is worth the risk.

[@wdAV...HYxD](wdAVLsLnMxnqneY6zsdJG8KeqxvR9N3ju5Da6sASojWDEHYxD-interlay) in order to continue growing the Interlay ecosystem, we'll need to continue adding more assets so there are more markets and options for users. And each market increases revenue a little to the Interlay treasury. A big goal right now for me is to demonstrate demand for borrowing/lending parachain tokens like BNC is finally being borrowed for deposits into Hydra.

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.

In [Interlay ref 95](https://interlay.subsquare.io/democracy/referenda/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.

- Interlay opened a money market for HydraDX (now Hydration) HDX.
- The lending market cap was originally set at $1M, but now it is 37.5M HDX ($555,975).
- The proposal is to increase the HDX money market ceiling to 60M HDX ($900k).
- The APR for borrowing will be reduced to incentivize more borrowing.
- The proposal includes compensation for market analysis, proposal creation, and testing.

Increase HDX money market cap to 60M HDX