If the executive passes, the ESM Threshold will be increased from 50,000 MKR to 75,000 MKR. The ESM Threshold describes the amount of MKR required to trigger an emergency shutdown of the Maker Protocol.
To elaborate slightly on why we (mandated actors) chose 75k over 100k, we felt that 75k was enough of an increase to mitigate the increased risk from Aave and other lending platforms. Further changes can be made in the future if appropriate once more time has been spent trying to determine the ‘correct’ value.
Normally an informal poll would not lead to a change entering a weekly executive proposal. However, in this case the change will be included for the following reasons:
- There was widespread support for an increase in the Informal Poll thread.
- Positive recommendation from the Risk Team.
- The amount of MKR available to borrow on DeFi lending platforms is approaching 50,000, and we want to move sooner rather than later.
- Last weeks executive showed that we can rally approximately 100,000 MKR in less than 48 hours if necessary.
- The ESM Contract is being replaced anyway as part of the Liquidations 2.0 Update.