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blimpa authored Sep 1, 2023
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Expand Up @@ -34,7 +34,7 @@ The Stability and Liquidity Facilitators must in collaboration with the CVC Subc

### 3: The general Asset-Liability Management model

#### 3.1: The general Asset-Liability Management model definition
### 3.1: The general Asset-Liability Management model definition
The ALM model governs the overall duration risk of the Dai collateral portfolio, and its contents are implemented practically in the Decentralized Collateral Scope Framework and the Real World Asset Scope Framework. The high level requirements specified in the sections act as the boundaries for how the Dai collateral portfolio must behave. Broadly, there are two categories of collateral in the Asset-Liability Management model: Stability Collateral, and Yield Collateral. Stability collateral are stablecoins and highly scalable and liquid assets that are used directly by the Maker Protocol to support the Dai peg and the Dai Savings Rate in the market place, while Yield Collateral are low risk, but less liquid assets used to generate yield above the Dai Savings Rate as surplus for the Maker Protocol.

#### 3.2: ALM Rules for Stability Collateral
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##### 3.3.5: *Yield Collateral Benchmark Yield*. Yield Collateral is highly diverse and is deployed in many different ways. The Yield Collateral Benchmark Yield is a tool for Maker Governance to control the overall risk of Yield Collateral through a single, simple parameter that influences various incentives and rules throughout the Scope Frameworks.
###### 3.3.5.1: Initially, the Yield Collateral Benchmark Yield is based on the 3-month US Government Treasury Bill. The standardized specification of the Yield Collateral Benchmark Yield is contained in *3.3.5.1.1A*, and this is the parameter that will be used in practice as the Yield Collateral Benchmark Yield. If the standardized specification deviates significantly from its intended value, it can be changed through the Weekly Governance Cycle by a proposal from the Stability and Liquidity Facilitators, the Decentralized Collateral Facilitators, or the Real World Asset Facilitators.
* **3.3.5.1.0:** *This element is meant to be improved to become a long term self sustainable, automated algorithm based on both endogenous values and external oracle input over time.*
* **3.3.5.1.1A:**
###### 3.3.5.1.0: *This element is meant to be improved to become a long term self sustainable, automated algorithm based on both endogenous values and external oracle input over time.*
###### 3.3.5.1.1A:

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