Parameter Updates

Manage and update vault parameters for mutable strategies.

Overview

Mutable strategies allow parameter updates after deployment. This provides flexibility but requires careful management.

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Updatable Parameters

Interest Rate

Adjust based on market conditions:

// Update interest rate
strategy.setInterestRate(newRate);

When to adjust:

• Market rates change

• Utilization too high/low

• Competition changes

Bond Ratio

Adjust risk requirements:

// Update bond requirements
strategy.setMinBondRatio(newRatio);

When to adjust:

• Market volatility changes

• Bad debt concerns

• Risk appetite shifts

Allowed Assets

Add or remove assets:

// Add new asset
strategy.addAllowedAsset(newAsset);

// Remove risky asset
strategy.removeAllowedAsset(riskyAsset);

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Governance Process

Proposal

1. Draft parameter change proposal

2. Document rationale

3. Model expected impact

4. Gather community feedback

Announcement

1. Announce change 48+ hours in advance

2. Explain reasoning

3. Show impact analysis

4. Allow discussion

Execution

1. Execute change via timelock

2. Verify correct values

3. Monitor impact

4. Communicate completion

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Best Practices

Gradual Changes

❌ BAD: Interest rate 10% → 30% overnight
✅ GOOD: Interest rate 10% → 12% → 15% over weeks

Transparency

Document all changes:

Date: 2024-01-15
Parameter: Interest Rate
Old Value: 12%
New Value: 15%
Reason: Increased market rates, improve LP returns
Expected Impact: +2.5% LP APY at current utilization

Safety Bounds

Set limits on parameter ranges:

// Interest rate bounds
uint256 MIN_INTEREST = 0.05e18;  // 5%
uint256 MAX_INTEREST = 0.50e18;  // 50%

require(newRate >= MIN_INTEREST && newRate <= MAX_INTEREST);

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Impact Analysis

Model Changes

Before updating:

function modelParameterChange(
    uint256 newInterestRate
) public view returns (
    uint256 newLPAPY,
    uint256 expectedUtilization,
    uint256 impact
) {
    // Calculate expected LP APY with new rate
    newLPAPY = newInterestRate * utilization / 1e18;

    // Model utilization change
    // Higher rates → potentially lower utilization

    return (newLPAPY, expectedUtilization, impact);
}

Related Documentation

• Mutable Strategies

• Monitoring Health

• Risk Management