Hey all,
Everybody watching or participating on Governance & Risk call past week have been notified about current inefficiencies happening at FLAP auctions. @cmooney and one of the active MakerDAO keepers “d_zap” have mentioned that due to low flap_beg value there isn’t enough incentive for keepers to bite Flap auctions and propose a healthy bid. Flap auction zero bidders have therefore been noticed last week.
This is why we are proposing an urgent on-chain poll to increase the current 2% flap_beg value to 4%.
Additionally we believe a higher flap_ttl value than the current one of 30min is needed due to the increasing likelihood of a high amount of FLAP auctions triggered if a larger liquidation event occurs. If we have 15m of FLIP auctions successfully cleared, MakerDAO would collect 1.95m in penalty fees which would go directly into FLAP auctions. This represents around 200 auctions and keepers might want to have more time for bidding. Therefore we propose to increase current 30m flap_ttl value to 1h.
Note also that a Surplus Buffer increase to 10m poll is also scheduled this week which should also mitigate the whole situation if approved and if this poll doesn’t pass. However a FLAP parameter adjustment is in our opinion needed for reasons mentioned above.
