What are you voting for?

• Extending 250,000 XAI of Credit to the LINK silo.

Chainlink

Name: Chainlink

Ticker: $LINK

Contract Address: 0x514910771af9ca656af840dff83e8264ecf986ca

Description: $LINK is the native token of the Chainlink protocol

LT: 85%

Absolute Parameters

Oracle: Chainlink LINK/ETH price feed

Liquidation: Silo’s liquidation engine can liquidate $LINK collateral efficiently.

Protocol-Wide Parameters

As discussed in SiloDAO’s adopted Risk Framework, no individual silo will receive a credit line extension exceeding 2,348,150 $XAI (1,643,705 $XAI after application of liquidity buffer).

Silo-Specific Parameters

$LINK has relatively high on-chain liquidity. Assuming we deploy the maximum credit line of 2,348,150 $XAI, this would imply the liquidation of 395,777 $LINK (2348150/0.85)

Simulating sales on Matchaswap indicate that swaps of this amount into $ETH would incur 5.22% slippage which would still be profitable to liquidate.

Applying the liquidity buffer of 30%, we will simulate the sale of 277,044 $LINK collateral which would imply a credit line of 1,643,075 $XAI.

Slippage is still relatively high at 3.26% but allows for a larger buffer in the event of liquidations.

Recommendation

Since $LINK’s on-chain liquidity is sufficiently deep, the maximum credit line we would be willing to extend is 1,643,075 $XAI, our Silo-Specific limit (Protocol-Wide Limit * 30% Buffer).

At the moment, we recommend extending a smaller credit line of 250,000 $XAI to gauge interest. We recommend assessing utilization and can adjust upwards towards our Silo-Specific limit as demand increases.

$LINK and $XAI’s on-chain liquidity must be closely monitored and managed - if there are significant decreases to TVL, this must be noted and credit lines burned if necessary.