Modify Liquidation Parameters

The Modify Liquidation Parameters poll type will allow Lucra governance to calibrate parameter values that control the mechanics of collateral liquidation. 5 parameters Safe Ratio, Bid Fee, Max Premium Rate, Partial Liquidation Threshold, and Valid Price Timeframe will constitute the control mechanism of liquidating collaterals.

The Safe Ratio is the target risk ratio of a liquidated loan position, defined as the ratio of (Borrow Amount) to (Borrow Limit). A low Safe Ratio value allows for the fast liquidation of collaterals while incurring a high price impact for the collateral, while a low Safe Ratio value enforces liquidations with lower collateral price impact, albeit with slower collateral liquidation.

The Bid Fee parameter determines the commission rate on executed bids, which is used to purchase NEP tokens.

The Max Premium Rate is the maximum rate of premium that bidders can submit.

Partial Liquidation Threshold is defined as the threshold total collateral value to trigger partial collateral liquidations. Loan positions with a total collateral value below this threshold have their collaterals fully liquidated at once, resetting their risk ratio to 0.

Valid Price Timeframe determines the freshness limit for oracle price data. Oracle price data is considered invalid (halts all collateral liquidations) when the most recent price data is older than Valid Price Timeframe.

Parameter Name	Description
Safe Ratio	Targeted risk ratio of a liquidated loan
Bid Fee	Protocol commission on executed bids used to purchase NEP
Max Premium Rate	Maximum bid premium rate value submittable by bidders
Partial Liquidation Threshold	Threshold total collateral value to trigger partial collateral liquidations
Valid Price Timeframe	Time window before the Liquidation Contract considers oracle price data invalid

Genesis Values

Parameter Name	Value
Safe Ratio	85%
Bid Fee	1.5%
Max Premium Rate	30%
Partial Liquidation Threshold	400 nYUSD
Valid Price Timeframe	60 seconds

Poll Format

Field	Description	Optionality
Title	Poll title	Required
Proposal Rationale	Short description of poll rationale	Required
Information Link	External URL for further information	Optional
Safe Ratio	Proposed risk ratio target for a liquidated loan	Optional
Bid Fee	Proposed protocol commission on executed bids used to purchase NEP	Optional
Max Premium Rate	Proposed maximum bid premium rate value submittable by bidders	Optional
Partial Liquidation Threshold	Proposed threshold total collateral value to trigger partial collateral liquidations	Optional
Valid Price Timeframe	Proposed time window before the Liquidation Contract considers oracle price data invalid	Optional