Per BIP 74:
The long-term goal with managing the liquidity is to have at least (-50%; 0%) price range covered at all times.
After the recent price drop, the current liquidity for BADGER only covers a ~40% price drop, so we need to deploy another range. The next range has the following parameters:
- Lower bound price: 780 sats
- Higher bound price: 1560 sats
- BTC to deposit: 20.41
There isn’t enough unallocated BTC available in the wallet, so to fill the gap, the proposal is to withdraw an excess portion of eBTC/WBTC Uni V3 liquidity (~34%).
According to my estimates, the amount withdrawn will have no effect on eBTC risk posture: ALL user eBTC debt can still get liquidated within the 1.01 price, which was the target in the framework I used.
Another part of the proposal is to use the withdrawn eBTC liquidity to top up the Treasury’s eBTC CDP to 185% CR (now at 150%).
