MGP-9┃Add Supply Caps & Debt Ceiling on the Mimo Midas pool on Polygon

Summary:

We propose to add Collateral & Supply Caps on assets in the Mimo Midas pool on Polygon to prevent further risks.

Rationale:

This discussion follows the MGP-7, make sure to read it first.

The Midas Protocol brings the possibility to create isolated markets and allow the deposit of any collateral. The tools they offer allow managing the possible risks on collaterals which can be much more volatile. Recently, Midas launched the Supply and Collateral Caps which are parameters that can prevent further risks on the Mimo Midas pool.

What are Supply Caps ?

These are limits to how much of the collateral asset can be used in the money market. This parameter is designed to protect the pool against specific, long-tail volatile assets to damage the pool’s integrity.

For a variety of smaller capitalization tokens with high fully-diluted valuations that are traded with thin liquidity, having the ability to supply an infinite amount of such tokens poses structural risks. Were the capitalization of such token to vary significantly, it is likely that positions backed by such assets could no longer be liquidate-able, posing the risk of bad debt being incurred in the system.

What are Debt Ceilings ?

These are limits on the total borrow amount of a market that is collateralized by another specific asset in the pool. The cap is measured as an amount of the borrowed market underlying tokens. (Note: For protected collateral tokens there is no Debt Ceiling as tokens aren’t borrowable)

That’s why we propose to adjust the Parameters on the Mimo Midas pool as follows:

On Protected collaterals:

  • Supply Cap for PAR/jEUR Curve V1 Pool → $500,000

  • Supply Cap for PAR/USDC UniV3 LP → $750,000

On collaterals:

  • Supply Cap for PAR → $2.5M

  • Debt Ceiling for PAR → $2.25M

  • Supply Cap for USDC → $1M

  • Debt Ceiling for USDC → $900,000

  • Supply Cap for DAI → $750,000

  • Debt Ceiling for DAI → $700,000

  • Supply Cap for FRAX → $10,000

  • Debt Ceiling for FRAX → $7,500

  • Supply Cap for WMATIC → $500,000

  • Debt Ceiling for MATIC → $450,000

Means:

  • Human resources: Verify that the Mimo Midas Capital Pool has been correctly updated with the new parameters.

  • Treasury resources: There is no cost for the treasury to create the pool on Polygon.

Technical Implementation:

The Midas team will update the new parameters of each asset o the Mimo Midas pool.

** Voting Options:**

  • Accept to update Caps parameters
  • Refuse to update Caps parameters
  • Abstain / Rework the proposal

Authors: @starny & @jeanbrasse from Mimo Labs.

Community poll:

  • Accept to update Caps parameters
  • Refuse to update Caps parameters
  • Abstain / Rework the proposal

0 voters

3 Likes

Considering the recent events of the Jarvis Midas pool, it was preferable that the proposal be postponed until the situation calms down.

That’s why the proposal will be published tomorrow on Snapshot

2 Likes