Collateral & volatility
Both Nephrite and Liquity are single-collateral stablecoins, but Nephrite uses BEAM instead of ETH. BEAM is more volatile than ETH, but its volatility is comparable to other low-cap privacy coins.
Volatility comparison (as of 15 June 2022)
Standard deviation of log returns and worst daily drawdown.
| Coin | σ since Beam launch | σ last 365d | σ last 180d | σ last 90d | Worst daily drawdown (since Beam) | Worst (365d) |
|---|---|---|---|---|---|---|
| ETH | 4.89% | 4.38% | 4.21% | 4.30% | -43.05% | -17.12% |
| ARRR | 11.19% | 6.84% | 6.62% | 6.41% | -43.05% | -29.43% |
| BEAM | 8.52% | 6.84% | 6.02% | 6.83% | -54.45% | -36.05% |
| DERO | 7.93% | 7.42% | 6.95% | 6.55% | -43.20% | -22.78% |
| FIRO | 6.72% | 6.04% | 5.98% | 6.48% | -41.71% | -34.51% |
| SCRT | 8.37% | 7.58% | 6.76% | 6.11% | -33.06% | -25.75% |
| XHV | 9.58% | 10.32% | 10.83% | 12.17% | -52.95% | -41.40% |
Minimum collateral ratio
To retain Liquity's capital-efficient approach, Nephrite sets the same Minimum Collateral Ratio of 110%.
It is up to Nephrite users to choose their desired collateral ratio, balancing capital efficiency and liquidation risk. The Nephrite team strongly encourages users to follow the vast majority of Liquity and MakerDAO users in maintaining a collateral ratio at or above 200%.