Forum Post: https://forum.inverse.finance/t/proposal-to-increase-firm-staked-cvx-market-parameters/525

Summary:

This proposal seeks to adjust the FiRM Staked CVX market parameters by increasing:

• The market ceiling from 2,000,000 to 3,000,000 DOLA.
• The daily borrow limit from 250,000 to 500,000 DOLA.

These adjustments are supported by consistent growth in collateral integrity as measured by the Risk Working Group’s (RWG) in-house frameworks, increased market usage, and rising borrow demand for the CVX market.

Supporting Evidence:

The RWG monitors FiRM collateral asset integrity through a detailed Observer Checklist. This tool enables the RWG to analyze long-term trends, assess asset stability, and refine parameters using advanced simulations of price impact and liquidation scenarios.

Key Observation Metrics from Q4 2024:

• Curve CVX-ETH LP TVL:
  • September Average: $7.7M
  • December Average: $14.2M
• Binance CVX/USDT 2% Depth:
  • September Average: $45.8K
  • December Average: $95.5K

The growth of the Curve CVX-ETH TVL and centralized exchange depth, alongside improved price impact simulations demonstrates strong growth in the Convex and Curve ecosystems.

Collateral Asset Scoring from Q4 2024

This framework evaluates the relative “risk” of any asset, using wETH as a benchmark using the following factors:

1. Market Capitalization Score (MCS):

• September 2024: 5.59
• January 2025: 9.34 (significant improvement)

2. Trading Volume Score (TVS):

• September 2024: 3.37
• January 2025: 3.10 (slight decrease)

3. Price Volatility Score (PVS):

• September 2024: 3.36
• January 2025: 2.81 (increased volatility)

4. Trading Distribution Score (TDS):

• September 2024: 6.28
• January 2025: 6.82 (increased decentralization)

Staked CVX FiRM Market Performance:

The CVX market has proven resilient, ranking as the second most liquidated market on FiRM (after CRV), accounting for 21.2% of total liquidations.

Liquidations Summary:

• Total Liquidations: 41
• Total Repaid Debt: 722,256.71 DOLA
• Total Liquidator Rewards: 294,528.46 DOLA
• Largest Single Liquidation: 71,700.00 DOLA
• Largest Liquidator Reward: 36,056.29 DOLA

Conclusion:

The proposed increase to the CVX market ceiling and daily borrow limit aligns with observed growth in CVX collateral metrics and market demand. By implementing these changes, FiRM can better accommodate borrower needs while maintaining collateral safety and market integrity.

On-Chain Actions:

1. Set Staked CVX market ceiling to 3,000,000 DOLA.

2. Set Staked CVX daily borrow limit to 500,000 DOLA.