Summary
This proposal changes the Diversity Factor in the Emergency Collateral Backing for hyUSD on Base.
Current Diversity Factor:
2000000000000000000
Proposed Diversity Factor:
1
Abstract
The proposed proposal, if enacted, would change the Diversity Factor to 1.
Problem Statement
The Diversity Factor dictates the number of backup assets(in the emergency collateral) the RToken will scale into when an asset in the primary basket has defaulted.
The Diversity Factor is configured incorrectly.
Rationale
In the hyUSD base emergency collateral backing there are only 2 assets. The protocol is smart enough to know to skip over the defaulted emergency collateral in a situation where the primary basket has defaulted. A sensible default value for the diversity factor in most cases is 1.
Setting the Diversity factor to greater than the number of assets in the emergency collateral has the same outcome as setting the diversity factor equal to the number of assets in the emergency collateral. This proposal is a cosmetic cleanup.
Risks
There are no risks in this change.
- Yes, I am for this proposal
- No, I am against this proposal