Emergency Shutdown Module Threshold Change

As discussed in this weeks governance and risk meeting and this informal poll thread, as part of the Liquidations 2.0 executive today, we will be including an increase to the ESM Threshold.

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.

For a more detailed breakdown of why this number was chosen, please see this evaluation produced by @Risk.

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.

More details on Emergency Shutdown and the Emergency Shutdown Module can be found here and here.

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:

  1. There was widespread support for an increase in the Informal Poll thread.
  2. Positive recommendation from the Risk Team.
  3. The amount of MKR available to borrow on DeFi lending platforms is approaching 50,000, and we want to move sooner rather than later.
  4. Last weeks executive showed that we can rally approximately 100,000 MKR in less than 48 hours if necessary.
  5. The ESM Contract is being replaced anyway as part of the Liquidations 2.0 Update.

Whoa! Perfect Timing. Woke up this morning and had some thoughts… [RISK] What If... A Powerful Intelligence Agency Attacked The Emergency Shutdown


I think this generally was one of my concerns.

See my post for other comments on this topic.

I like it, sorry I missed the discussion but 75,000 is an arbitrary number. We could choose a different number, that is functionally the same but sends a message.

How about 77,777 - super lucky, I would feel pretty good shutting this bad boy down knowing we had luck on our side!

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