Partial Cash Collateralization Parameters
Values
- callCollatScalingFactor: 0.7
Meaning/Justification
- Scales the amount of long call cash collateral held by the LP
- Increases the capital efficiency of the AMM by freeing up liquidity that would have been used in a fully collateralized system.
Values
- putCollatScalingFactor: 0.8
Meaning/Justification
- Scales the amount of long put cash collateral held by the LP
- Similar to the
callCollatScalingFactor, this parameter increases the capital efficiency of the AMM by freeing up liquidity that would have been used in a fully collateralized system.
Values
- adjustmentNetScalingFactor: 0.9
Meaning/Justification
- Percentage of liquidity that can be used in a contract adjustment event.
- This parameter caps the total pool value used in the calculation for scaling longs down to ensure there is a cash buffer in an insolvency event.
- Reserves some value for the LP token to safe guard the price going to 0.
Last modified 4mo ago