Summary

This vote is to determine if the Notional protocol should update its governance parameters. The proposed parameters (23) will change Notional’s AMM curves to be more capital efficient, allocate slightly less liquidity to the 1 Year pool for USDC & DAI, and slightly more liquidity to the 3 Month for ETH & WBTC. This update will make lending and borrowing on Notional more capital efficient with lower slippage for end-users while making better use of LP capital.

Proposed changes:

Parameter	Current value	Proposed value
ETH Anchor Rates	0.02 (2%)	0.01 (1%)
DAI Anchor Rates	0.07 (7%)	3M: 0.02 (2%), 6M: 0.03 (3%) and, 1Y: 0.04 (4%)
USDC Anchor Rates	0.07 (7%)	3M: 0.02 (2%), 6M: 0.03 (3%) and, 1Y: 0.04 (4%)
WBTC Anchor Rates	0.02 (2%)	0.01 (1%)
ETH Scalar Rates	18	32
DAI Scalar Rates	19	26
USDC Scalar Rates	19	26
WBTC Scalar Rates	18	32
ETH Leverage Thresholds	0.78 (3M) & 0.78 (6M)	0.88 (3M) & 0.88 (6M)
DAI Leverage Thresholds	0.76 (3M), 0.77 (6M) & 0.78 (1Y)	0.90 (3M), 0.87 (6M) & 0.85 (1Y)
USDC Leverage Thresholds	0.76 (3M), 0.77 (6M) & 0.78 (1Y)	0.90 (3M), 0.87 (6M) & 0.85 (1Y)
WBTC Leverage Thresholds	0.78 (3M) & 0.78 (6M)	0.88 (3M) & 0.88 (6M)
ETH Deposit shares	40% (3M) & 60% (6M)	50% (3M) & 50% (6M)
DAI Deposit shares	40% (3M), 35% (6M) & 25% (1Y)	40% (3M), 40% (6M) & 20% (1Y)
USDC Deposit shares	40% (3M), 35% (6M) & 25% (1Y)	40% (3M), 40% (6M) & 20% (1Y)
WBTC Deposit shares	40% (3M) & 60% (6M)	50% (3M) & 50% (6M)
ETH Initial Proportion	0.54 (3M), 0.53 (6M)	0.63 (3M), 0.63 (6M)
WBTC Initial Proportion	0.54 (3M), 0.54 (6M)	0.64 (3M), 0.64 (6M)
Maximum Proportion (all cash groups)	0.96	0.99
fCash haircut (all cash groups)	160 (8%)	110 (5.5%)
fCash buffer (all cash groups)	160 (8%)	110 (5.5%)
fCash haircut liquidation discount (all cash groups)	40 (2.0%)	30 (1.5%)
fCash buffer liquidation discount (all cash groups)	40 (2.0%)	30 (1.5%)

Links

The related NRC community discussion can be found here: https://commonwealth.im/notional/discussion/3963-governance-parameter-update-q2-2022 Governance parameter documentation: https://docs.notional.finance/governance