[Proposal] Adjusting recognized Maximum LTV parameter for bLuna

As Max’s forum post, Anchor Protocol has recently finished a proposal to raise the bLuna’s max LTV from 60% to 80%. As currently, readily available UST yield strategies significantly outperform the net interest rate the Anchor Borrow charges, higher target LTV will result in higher yield for Nexus’s Anchor bAseet vaults. The method to implement higher target LTV for Nexus Anchor vaults will involve updating recognized maximum ltv parameter, as the Anchor vaults’ target LTV ration is set as 80% of max LTV.

Thus we propose recognized maximum LTV parameters for bLuna to be changed from 60% to 80%, which in result will adjust target LTV from 48% to 64%, with bracket of re-balancing action trigger from 45%~51% to 60%~68%.

Proposed parameter changes

“borrow_ltv_max”: “0.85”,
“borrow_ltv_min”: “0.75”,
“borrow_ltv_aim”: “0.8”,
“basset_max_ltv”: “0.8” (bLuna only)

The timing of the proposal should be carefully considered, as the proposal will include embedded parameter change , which will be forcefully be executed once the proposal is passed. Meaning that in very rare circumstance where Nexus governance proposal is passed, but Anchor Proposal is delayed in execution, vaults will make positions at automatic liquidation level. Although there may be 5~6 days gap of having relatively lower target ltv (48% vs 64%), performance difference of 5 days translated into less than 0.35% APR; which does not worth the systemic risk imo.

Thus the proposal will be made once the team confirms the anchor parameter has been changed.