stkd-SCRT Max LTV change proposal

Hello everyone,

I’m making this forum post to show support for raising the max LTV for the stkd-SCRT vault to 60%.

Currently the Max LTV for this vault is 50%, which represents the lowest Max LTV of all SILK collateral vaults.

A change in max LTV for the stkdSCRT vault from 50% to 60% does not currently represent a large change in risk profile for the protocol as long as the SILK allowance caps are managed conservatively.

If SILK allowance caps are aggressively lifted in tandem with higher Max LTVs, this would represent a larger change in risk profile for SILK which would require a much more thorough risk analysis.

Currently, over 1.2M SILK (35.8% of SILK supply) are deposited into the SILK “Earn Pool” to be used to pay off debt and liquidate collateral for positions that have exceeded their Max LTV allowed. This currently exceeds what is considered a “healthy” amount of SILK that would be needed in almost all short term liquidation scenarios. This factor is important to consider as increasing the Max LTV of a vault, as the burden on the pool of SILK used for liquidations grows as more SILK is needed to liquidate the same amount of collateral. However, the marginal increase in SILK needed to liquidate ALL stkdSCRT collateral (60k SILK) is minor relative to the size of “earn pool” deposits.

If the max LTV for the stkdSCRT vault is raised to 60%, borrowers will see their “loan health” improve as a result of their current LTV being “further away” from the maximum LTV allowed.

TLDR; I support raising the max LTV of stkdSCRT vault to 60%.

Best Regards,