[MRC-40] Parameter Adjustments: LTVs and Liquidation Bonuses


The objective of this proposal is to adjust the LTVs and Liquidation Bonuses of several markets within the Red Bank and Farm. The motivation behind doing so is twofold:

  1. Since launch, some parameters might have already been outdated.
  2. Since previously the price source for most assets was TWAP-based, some additional conservative precautions were made in relation to the LTVs and Liquidation Bonuses of those assets. Specifically, for some assets with relatively low onchain liquidity, their LTVs were capped below what was suggested by the framework to adjust for the TWAP manipulation risk. In the same vein, the liquidation bonuses for most of these assets were set very conservatively to control for the natural TWAP-spot price lag. Now that most assets have migrated to Pyth, these additional precautions are no longer needed.

We believe the proposed adjustments will make the protocol more efficient without sacrificing the conservatism and risk aversion that characterizes Mars.


After running all current assets through the Mars Risk Framework, we propose the following adjustments:

Asset Current Max. LTV Current Liq. LTV Current L. Bonus Proposed Max. LTV Proposed Liq. LTV Proposed L. Bonus
axlUSDC 74% 75% 10% 79.5% 80% 7.5%
axlWBTC 64% 65% 12.5% 78% 80% 10%
axlWETH 63% 65% 12.5% 78% 80% 10%
ATOM 68% 70% 15% 74% 75% 10%
OSMO 59% 61% 15% 73% 75% 10%
axlWETH/OSMO LP 65% 67% 12.5% 75% 77% 12.5%
axlWBTC/OSMO LP 59% 62% 12.5% 75% 77% 12.5%
axlUSDC/OSMO LP 65% 66% 15% 75% 77% 12.5%
ATOM/OSMO LP 63% 65% 15% 73% 75% 12.5%
stATOM/ATOM LP 61% 62.5% 15% 64% 65% 15%

Note: For stATOM we propose no adjustments since it still uses a TWAP as its price source (the stATOM/ATOM adjustment is the result of the ATOM adjustment, while keeping stATOM parameters the same). For AXL no adjustments are proposed since it was listed just a couple weeks ago.


This is a signaling proposal, not an executable proposal.

The Mars smart contracts on the Osmosis chain are currently controlled by the Builder Multisig address. If this proposal passes, the builders will utilize their multisig to make the necessary parameter changes.


Copyright and related rights waived via CC0.


This proposal is being made by Delphi Labs Ltd., a British Virgin Islands limited company. Delphi Labs engages in incubation, investment, research and development relevant to multiple ecosystems and protocols, including the Mars Protocol. Delphi Labs and certain of its service providers and equity holders own MARS tokens and have financial interests related to this proposal. Additionally, Delphi Labs is one of several entities associated with one another under the “Delphi Digital” brand. Delphi Digital’s associated entities and/or equityholders or service providers of such entities may hold MARS and may have financial interests related to this proposal. All such entities, service providers, equity holders and other related persons may also have financial interests in complementary or competing projects or ecosystems, entities or tokens, including Osmosis/OSMO. These statements are intended to disclose relevant facts and to help identify potential conflicts of interest, and should not be misconstrued as a complete description of all relevant interests or conflicts of interests; nor should they be construed as a recommendation to purchase or acquire any token or security.

This proposal is also subject to and qualified by the Mars Disclaimers/Disclosures. Delphi Labs may lack access to all relevant facts or may have failed to give appropriate weighting to available facts. Delphi Labs is not making any representation, warranty or guarantee regarding the accuracy or completeness of the statements herein, and Delphi Labs shall have no liability in the event of losses or damages ensuing from approval or rejection or other handling of the proposal. Each user and voter should undertake their own research and make their own independent interpretation and analysis of all relevant facts and issues to arrive at their own personal determinations of how to vote on the proposal.


A very welcome proposal!

This will make Mars a much more competitive money market within the Cosmos, while still being safe.

And even looking outside the Cosmos, the proposed axlWBTC parameters are even better than Aave on Ethereum. For wBTC, Avae has the max LTV at 73% and liq at 78% - whereas this proposal would put max LTV at 78% and liq at 80%. Of course, the liquidation penalty is much lower on Aave.

Now all Mars needs is more USDC…