Given the exponential growth of DAI outstanding and the value of ETH I wanted to get a conversation going about the Pros/Cons of adjusting the Box Parameter. However, I don’t think we are quite ready for a signal request before we hear more from Risk on this subject.
I don’t have a good sense of the model that was used to select the current BOX of 15,000,000 but I assume that when the debt outstanding and liquidity of DAI have both substantially increased that this would also justify increasing the BOX. Given that we have over 600 Million DAI from ETH-A alone if we have a vicious pullback/deleveraging event and have substantial liquidations occurring a la Black Thursday there is no way that 15,000,000 will be enough to clear auctions with a 6HR TTL without losses.
Happy to hear what others think and hopefully we can come up with a range of possible BOX values for a future signal request.