# MIP-32 | Tokens Collateral Parameters update for paUSD on Ethereum

**URL:** <https://gov.parallel.best/t/mip-32-tokens-collateral-parameters-update-for-pausd-on-ethereum/401>\
**Category:** Approved PIPs\
**Created:** [July 3, 2024, 6:31am UTC](https://gov.parallel.best/t/mip-32-tokens-collateral-parameters-update-for-pausd-on-ethereum/401 "2024-07-03T06:31:01Z")\
**Posts on this page:** 2\
**Page:** 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:** [July 3, 2024, 6:31am UTC](https://gov.parallel.best/t/mip-32-tokens-collateral-parameters-update-for-pausd-on-ethereum/401/1 "2024-07-03T06:31:01Z")

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**Summary:**

This proposal aims to update tokens collateral parameters for paUSD on Ethereum.

**Context:**

In light of recent market developments over the past six months such as changes in token liquidity, increased volatility and rising global interest rates. We propose adjusting the collateral parameters for tokens allowed as collateral for paUSD on Ethereum.

This update aims to align the collateral parameters with the current risk environment and global market conditions.

**Rationale:**

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

 ![](https://europe1.discourse-cdn.com/flex005/uploads/mimo1/original/1X/c54ee40dcf225724560205f3359ecbd9c493a4ae.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/5b4c4b16b98439efc9aefd0b91b5d27b03baad06.png)

(In blue the proposed changes, more details available [here](https://docs.google.com/spreadsheets/d/1Dk2b-F7TPtqh5ej0ko-u8aEMteoaeuwp-jfG6gqisJY/edit?usp=sharing))

**Means:**

- Human Resources: Multisig signers will need to sign and execute transactions to adjust tokens collateral parameters for paUSD on the [Ethereum Multisig](https://app.safe.global/home?safe=eth:0x25Fc7ffa8f9da3582a36633d04804F0004706F9b).

- Treasury Resources: There is no cost for the treasury to adjust tokens collateral parameters for paUSD on Ethereum.

**Technical Implementation:**

Update Collateral parameters in the paUSD ConfigProvider[contract](https://etherscan.io/address/0x3E0F4aC1Be8F494b7C1AC445192B9099700e5A27#code) by calling the ‘SetCollateralConfig’ function for each token where changes are needed with approved parameters with of these parameters:

- ‘\_collateralType’
- ‘\_debtLimit’
- ‘\_liquidationRatio’
- ‘\_minCollateralRatio’
- ‘\_originationFee’
- ‘\_liquidationBonus’
- ‘\_liquidationFee’
- ‘\_borrowRate’ : decided by paUSD onchain price as voted in [MIP-25](https://gov.parallel.best/t/mip-25-l-update-partial-automated-borrow-rates-adjustments/355)

**Voting Options:**

- Accept the parameters update
- Against / Rework the Proposal
- Abstain

Author: @jeanbrasse & @Starny from Mimo Labs.

_Community poll:_

_Poll ([view on site](https://gov.parallel.best/t/mip-32-tokens-collateral-parameters-update-for-pausd-on-ethereum/401/1))_

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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:** [July 9, 2024, 5:57am UTC](https://gov.parallel.best/t/mip-32-tokens-collateral-parameters-update-for-pausd-on-ethereum/401/2 "2024-07-09T05:57:17Z")

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The proposal will be live tomorrow on Snapshot: [Snapshot](https://snapshot.org/#/mimo.eth/proposal/0xd9bddd25da263dac9dca7e205bbf93bd032ce0d1a459cf055941ec898fd9187e)