Agreed, the backing buffer needs more documentation on the website. It’s quite important and there are many factors that inform that. Noted.
The gas level is relevant to consider because we should assume bidders pass on any costs they have to pay to the protocol. That is: bidders will only bid at prices that allow them to profit, given frictions such as swap slippage and gas costs.
Gas costs look like they range from ~0.01% loss at 5-10 gwei to ~0.05% loss at 50-100 gwei. So they can end up being relevant when the chain is congested, but generally we should expect the slippage from swaps to be larger. Total slippage in auctions is equal to the sum of these.
Liquidity for the 3 current backing collateral is varied. I’m seeing (at the time of posting) about ~0.1% slippage for wstETH and rETH, and ~0.5% slippage for sfrxETH.
Given the high slippage for sfrxETH (and this conversation to move sfrxETH out of the backet somewhat: [RFC] Collateral Basket Change Proposal: Adjusting ETH+ Collateral Basket To Address Liquidity Constraints - #6 by tbrent) I think reducing the backingBuffer at this time is probably not a good idea.
Maybe ETH+ could accomplish a similar goal by reducing the rewardRatio. Right now it is set for a half-life of 2 weeks, and the suggested default is 1 week.