Configuring protocol constraints

Bringing it together

Estimations of:

  • Liquidator execution capacity

  • Market depth

  • Market depth recovery time

come together to help direct the following protocol constraints:

  • Asset deposit weights

  • Liability borrow weights

  • Global protocol deposit limits per asset

  • Global protocol borrow limits per asset

and soon:

  • Soft deposit and borrow limits in lieu of global hard protocol limits

Weights and global limits provide double coverage

Weights and global limits control similar protocol exposure, but from different angles:

  • Asset and liability weights control the leverage exposure any one account can have, regardless of its size. Today, these are the only account limits that mrgnlend employs

  • Global limits control the leverage exposure the overall protocol can have, providing an easier way to manage safe liquidation capacity.

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