Summary
This proposal changes the Diversity Factor in the Emergency Collateral Backing for hyUSD on Mainnet.
Current Diversity Factor:
2000000000000000000
Proposed Diversity Factor:
2
Abstract
The proposed proposal, if enacted, would change the Diversity Factor to 2.
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 and will scale into all of the assets(split evenly) in the emergency collateral upon detection of a default in the primary basket. 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.
Rationale
In the event of market turmoil Setting the diversity factor to 2 is a good idea. If sUSDe were to default, it would be ideal to leverage both USDC and USDT.
Risks
There are no risks in this change.
- Yes, I am for this proposal
- No, I am against this proposal