As I mentioned in today’s governance call, I made a mistake with one of the proposed launch auction parameters. This is in addition to the “missing parameter” issue I spoke about here [Discussion] Governance Poll Missing Parameter
We made a fairly recent change to the debt auction lot size (from 10,000 to 50,000) in order to prevent a very minor migration issue with the DSR. Essentially, there was a small risk that the DSR could needlessly trigger a debt auction. Since in the early days there might be no offsetting stability fees to cover the cost of the DSR (which might have happened if Sai holders migrated over, but not CDP owners), we increased the threshold amount for triggering a debt auction.
Unfortunately, we did not change the corresponding maximum bid amount from 50 to 250. As a result, the maximum bid is too low, meaning no keeper will rationally bid on the auction. The auction is still designed to reinitialize with a discount until the price is competitive for keepers, but this would take several cycles, meaning that bad debt might sit in the queue for a number of days.
This isn’t a critical risk, but definitely something we want to avoid. If we have time to clean this up before launch, and we do, we probably should. The proposed fix is a special cleanup governance poll on Monday, which can remedy both this issue and the missing parameter one. If the governance poll passes, there should be no issues for launch.
As for how this happened, and how we can prevent it from happening again, we’ll be doing a review. We had plenty of eyes on these parameters, but unfortunately no formal governance QA process. We will circle back when we put together a process, which has now become a big priority for me.
Sorry again for these errors.