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Simple Summary

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Lower the target c-ratio to 300%

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Abstract

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This SCCP changes the target c-ratio from 350% down to 300%.

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Motivation

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The target c-ratio was reduced to 300% during the implementation of SIP-148 which changed the mechanism for liquidations. The intent was to raise it back to 400% once the network had stabilised. The c-ratio was then raised to 350% too quickly due to fears that the price of SNX might increase significantly, while the price has almost doubled from the low of ~$1.50 it has stablised in a range below $3 for the last several weeks. Below $3 a c-ratio of >300% puts undue pressure on stakers and on the sUSD peg on Optimism. This SCCP reduces the target c-ratio back to 300% where it should remain until price volatility has decreased and the price of SNX is above $3 for at least several weeks. Stability of the c-ratio is critical for stakers to make informed decisions about their staking strategy, this SCCP should provide confidence to stakers that the ratio will remain at 300% until SNX recovers and price volatility declines.

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Copyright

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Copyright and related rights waived via CC0.

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