At the present the collateral debt ceiling is absolute. Example: ETH has a USD100m debt ceiling, irrespective of the USD value.
My question is: Would it not be better to have a relative debt ceiling expressed as a percentage and linked to the marketcap?
Example: ETH has a marketcap of USD 20 billion. Instead of a absolute debt ceiling of USD100 million, we could give it a floating debt ceiling of 0.5% of market cap?
The debt ceiling would be the same using both systems but the relative debt ceiling would be much more flexible. If ETH doubles in value, the debt ceiling measured i USD doubles automatically. Same if the price of ETH drops. In this way the debt ceiling for Vault collateral would be adjusted to market circumstances without increasing the Maker governance workload.
Are there any strictly technical reasons this would not work? Possibly too high reliance on oracles?