Matthew Rabinowitz: Sorry, and I do have one question related to that: so if we ultimately one day went through and did this manually, at some point, I agree with Greg that the mental cognitive overhead right now is probably not worth it; maybe it might be in a couple of weeks, a month or two or six. But wouldn’t there still be a 13% liquidation penalty for those parties?
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Gregory Di Prisco: No.
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Matthew Rabinowitz: Why not? Why wouldn’t we?
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David Utrobin: Well, I believe the auctions would try to recover 13% on whatever the debt is, but it’s just not going to get it.
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Kurt: David said it correctly. The keepers won’t bid more than the collateral’s fair market value, and there’s no way to force them to do that. They will sit there hoping to get 13%, but they just wouldn’t get it. We’ll get approximately the value of the collateral minus some inefficiency factor.
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Matthew Rabinowitz: Understood, now I’m not entirely familiar with how the keeper side of it works. I didn’t know there was a 13% ding in effect on the principal at that stage.
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MakerMan: Hey, can I chime in a little bit? So the only buffer for any kind of anything is that 1% there. That’s it, there is no 13%. The second thing is that the interest rate is running into the surplus buffer, right? So you can kind of run the numbers, but you’ve got to run them against what’s already gone into the surplus buffer. So the clock is kind of ticking on several things. I don’t consider this an emergency. I hear many people saying, well, if we can get the DAI price down somehow, get people to close, that that’s kind of an ideal situation, but we’ve been in this boat for a while, and I don’t easily see us getting out of it. There’s no 13% anywhere. We’ve got 1% to work, and that clock has been ticking into that 1% for a while now.
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Matthew Rabinowitz: Understood, got it.
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David Utrobin: And that’s why it’s probably not a bad idea to advocate for lowering the stability fee on USDC-A to extend that clock a little bit for Governance. I don’t know if I’m missing something that might make that a bad idea.
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SamM: Yeah, I’m definitely in favor of lowering the stability fee at some point.
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David Utrobin: Especially since we’re maxed out on the surplus buffer right now, and we’re doing the surplus auctions, it might be responsible to lower the stability fees on USDC-A.
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MakerMan: I mean, loosely speaking, some of that DAI that we thought we had that we are now buying MKR with we kind of don’t have. You kind of really want to pull that back until you solve this problem.
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Gregory Di Prisco: Well, that’s not true. We have the DAI that we burned so far. It’ll become a problem in a couple of months, but the DAI getting burned now is definitely ours to keep.
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Matthew Rabinowitz: I do, however, want to caution or recommend, at least to the community, the notion that we’re changing the stability fee on anything less than the underlying risk that’s associated with the collateral. I think it sets a dangerous precedent from my perspective only to move the stability fee, in effect trying to mix monetary policy with risk policy.
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MakerMan: There was one thought I had on this USDC-C because the one thing about opening that up, and I don’t want to get into the details of, is that in effect that will reset the clock. Anything that goes in there, whatever the stability fee is, that clock starts when that facility opens.
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David Utrobin: Yeah, absolutely. My whole point about the USDC-C thing is that you get to, basically, have more control over those positions where you don’t have to manually liquidate. Still, you have more control since you can set the stability beyond each of those facilities as you need.
). The closest work experience I have to that subject is related to Anti-Money Laundering / KYC consulting for a bulge bracket in the states.