Risk Parameters Controlled by ADADAO Governance

Each Vault type (for example, ADA vault) has its own set of Risk Parameters that must be followed. The criteria are set depending on the collateral's risk profile, and ADAO holders have direct control over them through voting.
The Key Risk Parameters for ADADAO Vaults are:
Debt Ceiling : The maximum amount of debt that can be created by a single collateral type is referred to as the debt ceiling. ADADAO Governance gives a Debt Ceiling to each collateral type, which is intended to guarantee that the ADADAO Protocol collateral portfolio is sufficiently diverse. Once a collateral type's Debt Ceiling has been reached, it's no longer feasible to establish new debt unless some existing users pay off all or part of their Vault debt.
The Stability Fee : It is a one-time fee levied when a collateralized vault is created. It is a fixed percentage of the amount if AUSD taken out from the system. It is not time dependent. Liquidation ratio: ADADAO Governance expects low price volatility of the collateral if the Liquidation Ratio is low; if the Liquidation Ratio is large, ADADAO Governance expects considerable volatility.
Liquidation Penalty : fee added to a Vault’s total outstanding generated AUSD when a Liquidation occurs, is known as liquidation penalty
Collateral Auction Duration : ADADAO Vaults have a limit on how long Collateral auctions can last. The durations of the debt and surplus auctions are global system parameters.
Auction Bid Duration : The amount of time until a single bid expires and the auction concludes.
Auction Step Size : This Risk Parameter was created to encourage early bidders in auctions while also preventing abuse by bidding a little amount higher than the current bid.