GIP-15 mandated a 3 month engagement with the RiskDAO. This engagement period will come to an end in 10 days, and this proposal suggests to extend the engagement by additional 9 more month, with the same engagement price.
Setting the right risk-related parameters, most notably loan-to-value (LTV, aka collateral factor), is crucial for lending markets solvency and adoption. Aggressive parameters would encourage borrowers adoption at the expense of higher insolvency risk, and conservative parameters would do the opposite.
Gearbox has an in-house Risk Committee , however it is becoming best practice to engage with external risk assessment firms (e.g., see Aave) similarly to how external code auditors are engaged.
Further, the RiskDAO offers additional monitoring tools and simulation models w.r.t the tools the risk committee is offering.
Our Gearbox dashboard went live in less than a week after Gearbox mainnet deployment.
The dashboard recommend liquidation thresholds and also display key indicators to explain how these recommendations were formed.
Some notable indicators are credit account composition
Asset distribution and expected liquidations according to asset price
and a stable coin monitoring widget
In addition, we developed and implemented, per the GIP-15 decision, a mathematical model for stable coin collaterals.
And proposed, in GIP-27, to introduce a sanity check to the LUSD price oracle implementation.
The engagement will continue to include the development and maintenance of the dashboard.
In addition, we will continue to research topics that are of interest to the Gearbox community.
It was brought to our attention that current, the community is interested in:
- Investigate the implications and risk model of having balancer LP tokens as a collateral.
- Investigate the risk implications when deploying on L2s (which stem from the lower liquidity in those ecosystem).
- Explore and consult and additional oracle vendors.
Risk DAO is a revenue driven service DAO.
The pricing model is $50k per quarter. The DAO members are willing to accept up to ⅓ of the payment in vested protocol tokens.
The proposal is for an additional engagement of 3 quarters, and we propose to execute a payment once per every quarter, starting the month of December.