SCCP-2014: Update Perp Parameters
| Author | |
|---|---|
| Status | Vote_Pending |
| Type | Governance |
| Network | Optimism |
| Implementor | TBD |
| Release | TBD |
| Proposal | Loading status... |
| Created | 2023-06-15 |
Simple Summary
This SCCP proposes to update the perp-v2 parameters as per the below configurations:
Max Market Value
| Existing | Proposed | |
|---|---|---|
| sCRV | 727,000 | 2,000,000 |
| sBLUR | 1,750,000 | 3,000,000 |
Skew Scale
| Existing | Proposed | |
|---|---|---|
| sSOL | 10,000,000 | 6,000,000 |
| sDOT | 30,000,000 | 20,000,000 |
| sAVAX | 8,000,000 | 5,000,000 |
Liquidation Buffer Ratio and Liquidation Premium Multiplier
Keep the liquidation buffer ratio and liquidation premium multiplier at their current levels, specified below:
| liquidationBufferRatio | liquidationPremiumMultiplier | |
|---|---|---|
| sETH | 75 | 1.5625 |
| sBTC | 75 | 1.5625 |
| BNB | 100 | 1.5625 |
| LINK | 100 | 1.5625 |
| SOL | 100 | 1.5625 |
| MATIC | 100 | 1.5625 |
| DOGE | 100 | 1.5625 |
| FTM | 121 | 1.5625 |
| ATOM | 121 | 1.5625 |
| AVAX | 121 | 1.5625 |
| ARB | 121 | 1.5625 |
| OP | 121 | 1.5625 |
| APE | 121 | 1.5625 |
| NEAR | 121 | 1.5625 |
| AXS | 121 | 1.5625 |
| UNI | 121 | 1.5625 |
| DYDX | 121 | 1.5625 |
| AAVE | 121 | 1.5625 |
| FLOW | 121 | 1.5625 |
Abstract
Below is a description on the parameters being updated:
maxMarketValueis the maximum amount of open interest allowed on long and short positions in a given perp market.skewScaleis a scaling parameter that helps calibrate the amount of slippage (or price improvement) a position receives when a position is modified. It also is a parameter that affects the speed by which funding rate changes.liquidationBufferRatiois the penalty imposed on a position when it is liquidated. The penalty is calculated as follows:buffer * P * SLiquidationPremiumMultiplierorLPMis an additional margin required to be set aside when an account opens position with larger size. TheliquidationPremiumis calculated as follows:LPM * (S /Scale) * P * S.
Motivation
The primary motivation behind these parameter changes:
maxMarketValueis proposed to increase in order to cater for rising demand. It is worth noting that the risk associated with this change is considered low taking into account the OI available on centralized exchanges vis-a-vis the potential increase in synthetix oi capacity.- Skew Scale is updated on few markets in order to align with the scaling factor derivative seen on centralized exchanges.
- Liquidation Buffer Ratio and Liquidation Premium Multiplier are kept at the current levels, overriding the changes that are yet to affected mentioned in SCCP-293. The motivation behind this is that newly imposed leverage restrictions at the UI level, help constrain the risk on the debt pool all the while improving the UX on traders with respect to limiting imminent liquidations.
Copyright
Copyright and related rights waived via CC0.