# MIP-22┃Adjust Tokens Collateral Parameters for paUSD on Polygon PoS

**URL:** <https://gov.parallel.best/t/mip-22-adjust-tokens-collateral-parameters-for-pausd-on-polygon-pos/323>\
**Category:** Approved PIPs\
**Created:** [December 18, 2023, 1:28pm UTC](https://gov.parallel.best/t/mip-22-adjust-tokens-collateral-parameters-for-pausd-on-polygon-pos/323 "2023-12-18T13:28:03Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![JeanBrasse](https://dub1.discourse-cdn.com/flex005/user_avatar/gov.parallel.best/jeanbrasse/32/28_2.png) [@JeanBrasse](https://gov.parallel.best/u/JeanBrasse)\
**Post date:** [December 18, 2023, 1:28pm UTC](https://gov.parallel.best/t/mip-22-adjust-tokens-collateral-parameters-for-pausd-on-polygon-pos/323/1 "2023-12-18T13:28:03Z")

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**Summary:**

This proposal aims to adjust tokens collateral parameters for paUSD on Polygon PoS.

**Context:**

Following last month’s market changes (tokens liquidity, volatility, global interest rates raises) we propose an adjustment of the parameters of tokens allowed as collateral for paUSD on Polygon PoS to fit with updated risk parameters and global market conditions.

**Rationale:**

Below are the current collateral parameters for token allowed as collateral for paUSD on Polygon PoS:

 ![](https://europe1.discourse-cdn.com/flex005/uploads/mimo1/original/1X/34a93309635a0188f63f08720ffb032047f58c25.png)  
(More details available [here](https://docs.google.com/spreadsheets/d/1Dk2b-F7TPtqh5ej0ko-u8aEMteoaeuwp-jfG6gqisJY/edit?usp=sharing))

We propose to adjust collateral parameters as follows:

 ![](https://europe1.discourse-cdn.com/flex005/uploads/mimo1/original/1X/a9984667f5293ac4a77ac456878bd1f2ff07b3bc.png)  
(In blue the proposed changes, more details available [here](https://docs.google.com/spreadsheets/d/1Dk2b-F7TPtqh5ej0ko-u8aEMteoaeuwp-jfG6gqisJY/edit?usp=sharing) & [here](https://docs.google.com/spreadsheets/d/1SZ6Q1ny8S2O_hOx1T9GzO35n0JqYB1ZpJTZyrPDyUKQ/edit?usp=sharing))

Proposed Changes Summary:

- Minimum Collateral Ratio (MCR) / Liquidation Ratio (LR) / Liquidation Bonus (LB) / Debt Limit: In order to properly adjust minimum collateral ratios of all assets allowed as collateral for paUSD on Polygon PoS we implemented the LTV calculation [formula](https://github.com/Risk-DAO/Reports/blob/main/a-smart-contract-ltv-formula.pdf) theorized by [RiskDAO](https://riskdao.org/). The proposed formula:  
 ![](https://europe1.discourse-cdn.com/flex005/uploads/mimo1/original/1X/6a62df990a573a4e87f504bdd2c07f74cfe3f6d4.png)

- Where:

You can find detailed calculations for each asset [here](https://docs.google.com/spreadsheets/d/1SZ6Q1ny8S2O_hOx1T9GzO35n0JqYB1ZpJTZyrPDyUKQ/edit?usp=sharing).

- Initiation Fee (IF): No changes proposed.
- Borrow Rate (BR): Following recent market changes, creating increased demand for stablecoins, and a global increase in stablecoin borrowing rates (cf. [GHO](https://app.aave.com/markets/?marketName=proto_mainnet_v3) → 5.36%, [crvUSD](https://crvusd.curve.fi/#/ethereum/markets) → 5%, etc.), we propose to increase interest rates for non-productive tokens to 1.80% per annum, and at least 2.10% per annum for productive tokens (more details [here](https://docs.google.com/spreadsheets/d/1aDkVYgdJM9MwUeJuRhGEYpY2rYB6Ls4MNjeCwWr4nlg/edit?usp=sharing)).

**Means:**

- Human Resources: Multisig signers will need to sign and execute transactions to adjust tokens collateral parameters for paUSD on the Polygon PoS Multisig.
- Treasury Resources: There is no cost for the treasury to adjust tokens collateral parameters for paUSD on Polygon PoS.

**Technical Implementation:**

- In the ‘ConfigProvider’ [contract](https://polygonscan.com/address/0x44adedae87cda45f9e9b6d49e49db5d583646163#code) call the function ‘SetCollateralConfig’ for each token where changes are needed with approved parameters. (USDC, wETH, wBTC, CRV, BAL, AAVE, LINK, SUSHI, DAI, wstETH, wUSK, wFRK, wMATIC, stMATIC, MaticX)

**Voting Options:**

- For the adjustment
- Against the adjustment
- Abstain

Author: @jeanbrasse & @Starny from Mimo Labs.

**Community poll:**

_Poll ([view on site](https://gov.parallel.best/t/mip-22-adjust-tokens-collateral-parameters-for-pausd-on-polygon-pos/323/1))_

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**Author:** ![starny](https://dub1.discourse-cdn.com/flex005/user_avatar/gov.parallel.best/starny/32/32_2.png) [@starny](https://gov.parallel.best/u/starny)\
**Post date:** [January 3, 2024, 10:29am UTC](https://gov.parallel.best/t/mip-22-adjust-tokens-collateral-parameters-for-pausd-on-polygon-pos/323/2 "2024-01-03T10:29:09Z")

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The proposal is now live on Snapshot:  
[https://snapshot.org/#/mimo.eth/proposal/0xb0d1ce57d5525d377fedb9b40335df2b176fe716d0869b1e999ceb5854854abf](https://snapshot.org/#/mimo.eth/proposal/0xb0d1ce57d5525d377fedb9b40335df2b176fe716d0869b1e999ceb5854854abf)

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<div class="post-metadata">

**Author:** ![starny](https://dub1.discourse-cdn.com/flex005/user_avatar/gov.parallel.best/starny/32/32_2.png) [@starny](https://gov.parallel.best/u/starny)\
**Post date:** [January 10, 2024, 3:07pm UTC](https://gov.parallel.best/t/mip-22-adjust-tokens-collateral-parameters-for-pausd-on-polygon-pos/323/3 "2024-01-10T15:07:34Z")

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The proposal has been approved and executed:  
[https://snapshot.org/#/mimo.eth/proposal/0xb0d1ce57d5525d377fedb9b40335df2b176fe716d0869b1e999ceb5854854abf](https://snapshot.org/#/mimo.eth/proposal/0xb0d1ce57d5525d377fedb9b40335df2b176fe716d0869b1e999ceb5854854abf)