Poll Link: (https://terra.mirror.finance/gov/poll/76)
Minimum collateral ratio (MCR) only needs to be high for a relatively volatile asset, such that when the collateralisation ratio falls below the MCR, it should still be above 100% when the liquidation happens, to ensure that all mirror assets are backed with a sufficient amount of UST.
Gold on its own has become a store of value due to its stability in price. As such it does not make sense to use an MCR of 150% for mIAU. From the image below we can see that over the last 12 months, even at gold’s most volatile period, the price moved ~15% over the span of 2-3 weeks in it’s most volatile period.
Estimated impact if approval passed:
With ~12 million UST worth of mIAU minted, we can expect ~20% of it to be freed up and be used more efficiently.
This change to mIAU hopefully marks the beginning of a better choice of consideration of historical price volatility. (e.g. lower for mIAU, and possible higher MCR for mVIX).