Abracadabra community launches new proposal proposing rate adjustment for CRV cauldrons

Odaily Planet Daily News The Abracadabra community, the issuer of the algorithmic stable currency MIM, released a new proposal to propose an interest rate adjustment for CRV cauldrons. The proposal states that in view of the current large CRV risk exposure of the protocol, it is proposed to apply the collateral-based interest rate to the two CRV cauldrons. As such, the interest rate on the CRV collateral will incorporate a base rate that is determined by the sum of the outstanding principal of the two CRV cauldrons. The actual interest rate will be generated by combining the benchmark interest rate and the interest rate multiplier. The interest rate multiplier depends on the collateral ratio of the cauldrons. If the proposal is approved, all interest will be deducted directly from cauldrons’ collateral and immediately transferred to the treasury of the agreement to increase the DAO’s reserve factor. Once in the treasury, the collateral can be traded on the chain or through Abracadabra One of the off-chain partners converts to MIM. Given the current principal outstanding of $18 million, the base rate is 200%. According to this interest rate, the loan can be fully repaid within 6 months. As the principal is repaid, the base rate will decrease. If the mortgage ratio is 40%, the base rate will not change. If the mortgage ratio is 45%, then the base rate will be multiplied by 5. Based on the current principal outstanding, this means the loan will be fully repaid within 1.2 months.