What ideas exist out there around how we can cushion the system from being forced to sell assets into over-stressed markets during crashes when mass liquidation is taking place?
This is an often glossed over risk factor and inefficiency that we are confronted with. I want to begin discussing good alternatives to take some of that pressure off. It makes little sense to sell forcefully and blindly into downturns but I do understand why we do it. There has to be some better ways out there to at the very least reduce the degree in which we subject the MCD system to this though.
I see a bright future for MCD where there are many, many diverse collateral types and uncorrelated or even inversely correlated vault types. In that future the system has either insured or sold some of the assets of every collateral type in preparation for a major liquidity crunch. In that future MakerDao is more proactive in the attempts it makes to cushion this type of impact to the system and less reactive than it is currently structured. Help discuss here how we might best bridge that gap. Or, if you prefer, share your own perspective on things.