𝐔𝐒𝐃𝐃 𝐂𝐎𝐋𝐋𝐀𝐓𝐄𝐑𝐀𝐋 𝐇𝐀𝐈𝐑𝐂𝐔𝐓𝐒 𝐂𝐀𝐍 𝐑𝐄𝐕𝐄𝐀𝐋 𝐇𝐎𝐖 𝐑𝐈𝐒𝐊 𝐈𝐒 𝐏𝐑𝐈𝐂𝐄𝐃
Collateral risk controls need to account for the possibility that an asset’s market value can change faster than a protocol can respond. A haircut reduces the value credited to collateral for risk calculations, creating a buffer between the observed market price and the amount of borrowing or issuance that the asset can support.
When analysing USDD’s collateral arrangements, users can examine whether asset eligibility and valuation rules account for volatility, liquidity, and the time required to execute transactions. A conservative valuation approach can help limit exposure, although its effectiveness depends on the actual parameters and the conditions under which they are applied.
The important point is that collateral values should not be treated as equally dependable simply because they are denominated in a familiar currency. Transparent risk parameters make it easier to understand the assumptions behind a stablecoin’s backing and identify where additional scrutiny may be necessary.
@Justin Sun孙宇晨 @USDD - Decentralized USD #TRONEcoStar
Collateral risk controls need to account for the possibility that an asset’s market value can change faster than a protocol can respond. A haircut reduces the value credited to collateral for risk calculations, creating a buffer between the observed market price and the amount of borrowing or issuance that the asset can support.
When analysing USDD’s collateral arrangements, users can examine whether asset eligibility and valuation rules account for volatility, liquidity, and the time required to execute transactions. A conservative valuation approach can help limit exposure, although its effectiveness depends on the actual parameters and the conditions under which they are applied.
The important point is that collateral values should not be treated as equally dependable simply because they are denominated in a familiar currency. Transparent risk parameters make it easier to understand the assumptions behind a stablecoin’s backing and identify where additional scrutiny may be necessary.
@Justin Sun孙宇晨 @USDD - Decentralized USD #TRONEcoStar
