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HIP-19: Temporarily reduce C-Ratio to 350%

Temporarily reduce the Target C-Ratio to 350% to relieve pressure on stakers and allow them to claim weekly rewards.

PreviousHIP-20: Suspend zMATIC Market and Introduce zPOL Ahead of MATIC to POL MigrationNextHIP-18: Add DOGE and SHIBA to Horizon Futures

Type: Horizon Improvement Proposal

Date: Aug 14th, 2024

Status: Completed

Specification Set the target C-Ratio to 350% and adjust Preset Strategies to:

  • Conservative: 1000% → 850%

  • Neutral: 800% → 650%

  • Aggressive: 600% → 350%

Motivation Lowering the Target C-Ratio to 350% will provide immediate relief to stakers by making it easier for them to claim weekly rewards without the need to burn zUSD or self-liquidate. HZN stakers play a key role in the Horizon Protocol Ecosystem by providing collateral to the Global zAsset Portfolio and actively maintaining a healthy collateral ratio. Additionally, stakers provide liquidity to the zUSD and zBNB on/off ramps, earning additional yield. This temporary measure is intended to alleviate the current pressure on stakers, who may be struggling to maintain higher C-Ratio, while maintaining the liquidity of the zUSD and zBNB on/off ramps.

By temporarily decreasing the Target C-Ratio, stakers will be able to access the weekly rewards incentive while having more flexibility to contribute to the total zAsset liquidity.

Potential Risks The implementation of this HIP might come with some risks, including the following:

  • For stakers, it is easier to reach the 160% liquidation ratio from 350% than from the previous 600%. So, should they decide to use an aggressive strategy, stakers will have to be vigilant in managing their debt. To mitigate this risk, stakers have a 12h grace period to fix their wallet should they hit the liquidation ratio. Stakers can always choose to use a Moderate or Conservative strategy, and use external notification services for price alerts.

Considerations Additional thoughts we should take into consideration:

  • This is a temporary measure, and the impact will be closely monitored to determine the appropriate time to revert to the previous C-Ratio or adjust it further as needed.