Abracadabra has initiated a new proposal to adjust the interest rates for CRV collateralized lending

ChainCatcher news, the algorithmic stablecoin MIM issuer Abracadabra community has released a new proposal to adjust the interest rates on CRV cauldrons.

The proposal states that, given the protocol's current significant CRV risk exposure, it is proposed to apply a collateral-based interest rate to the two CRV cauldrons. As a result, the interest rate on CRV collateral will include a benchmark rate, which depends on the sum of the outstanding principal of the two CRV cauldrons. The actual interest rate will be generated by combining the benchmark rate and the interest rate multiplier. The interest rate multiplier will depend on the collateralization ratio of the cauldrons.

The effect of this proposal is that all interest will be directly deducted from the collateral of the cauldrons and immediately transferred to the protocol's treasury, increasing the DAO's reserve ratio, thereby reducing the DAO risk associated with liquidity conditions related to CRV.