This community post outlines a proposed parameter update for the United Stables ($U) market in the Venus Core Pool, following discussions with the United Stables team to support improved liquidation mechanics and reduce protocol collateral risk exposure.
Context and Rationale:
1. Support for United Stables Liquidation Infrastructure
At the request of the United Stables team, adjustments to the $U market parameters are proposed to better support the development of their liquidation framework and ensure smoother integration with Venus risk controls.
Increasing the supply cap will allow for greater market participation and liquidity depth, supporting healthy borrowing and liquidation activity for the asset.
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Supply Cap($U):
20,000,000 → 130,000,000 -
borrow Cap($U):
20,000,000 → 130,000,000
2. Reduction of Protocol Collateral Risk Exposure
To further mitigate collateral-related risk exposure within the Venus Core Pool, it is proposed to disable $U as eligible collateral by setting its collateral factor to zero.
This change ensures that:
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$U can continue to be supplied and borrowed.
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$U will no longer contribute to borrow power.
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No new positions can use $U as collateral.
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Collateral Factor:
75% → 0%
This adjustment aligns with prudent risk management practices while maintaining market functionality for $U liquidity purposes.
Summary:
If executed, this update will:
- Increase the $U supply cap from 20M to 130M.
- Set the $U collateral factor to 0%, disabling it as collateral.
- Support United Stables’ liquidation framework development.
- Reduce Venus Core Pool collateral risk exposure related to $U.
We welcome community feedback ahead of submitting a formal governance proposal.