As we start the MCD launch process, we should also consider and review the “core mandate”…
- Stabilize DAI to the USD with a 1:1 soft peg with as many zeros after as possible
- Methodically and scientifically reduce the risk of collateral portfolio while maintaining the above
- Expand the DAI ecosystem getting DAI used a synthetic US Dollar to cement the existing network effects
We have addressed the first two and that remains a never-ending vigilant process.
For the third, I not only reference it to bring attention to the business development aspect (raw implementation) but also how it influences the aspects for the first two (eg it’s impact on monetary policy).
For example, in SCD and presumably in MCD, ETH will be used as collateral with a 150% CR and a TBD risk premium.
Point being to assist in the mass release of DAI, we should consider a massively de risked collateral package (for each approved collateral) where the objective is the mass monetization of collateral but where the risk of default is laughably low… So a CR of 1000% or more such that the RP is 50bps (or even less).
Today there is no “discount” for providing exceptionally more collateral than needed… and to that end, no motivation…
By splitting between the possible leverage use case and just partial monetizing of an asset, we can lock up additional collateral, mint more DAI, integrate in more use cases, compete with a better cost of capital, get more people paying the DSR and thereby more people receiving the DSR… In summary, expand the monetary base without expanding the risk profile.