Governance proposal 525, submitted by TokenLogic, is marked executed. Its Monad execution transaction succeeded on Oct. 8 and set the supply cap and E-Mode parameters, including a 2.62% liquidation bonus.
A Moving Collateral Value
The new token’s onchain oracle carries the configured initial annual discount rate of 5.745%, with a maximum of 8.804%. This is a pricing input, not the interest rate borrowers pay. The linear model values the PT below its underlying $AUSD redemption value before maturity, with the discount shrinking as expiry approaches.
“LlamaGuard agents will update the discount rate and E-Mode risk parameters through maturity,” LlamaRisk said in its launch announcement.
Under LlamaRisk’s published framework, discount-rate updates change the oracle’s valuation, while E-Mode updates can change loan-to-value limits, liquidation thresholds and liquidation bonuses. Updates pass through governance-controlled risk-agent permissions and safety checks. Aave has already activated this approach on Plasma.
For borrowers, a higher discount rate lowers the PT’s collateral valuation. A lower valuation or liquidation threshold reduces the account’s health factor—the ratio of threshold-adjusted collateral to debt. Aave permits liquidation below a health factor of one, so a position can move closer to liquidation even without the borrower taking another loan. The liquidation bonus is the extra collateral a liquidator receives for repaying debt.
At the Dec. 17 maturity, each PT redeems for one $AUSD, according to LlamaRisk’s asset assessment. That principal claim is independent of whether Agora continues the yield rebate supporting the Pendle market.