[Gov Poll] Vote for 0% for the Stablecoin Stability Fee!

Yeah I’m planning to rerun the poll as soon as an executive is available which will be early December. Although the decision is technically correct, I do think MKR holders want a lower SF.

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that would be great! if those of us who shorted could get out with just a little bit of what we put in, it would be great! :sweat_smile:

If you sold for Dai >$1.01, don’t you have a profit? You can just abandon the CDP

nope, with the 4% stability fee I am at 99.6%. So I got my hopes up for the 0% stability fee. But now with the 4% I will basically lose it all within the next 30 days.

What does Dai need to trade at for you to exit at breakeven?

We are approximately at the breakeven point right now. Just slightly underwater for the leading edge vaults.

In my case DAI should be lower than current levels for breaking even. Not in Coinbase!, but in Curve or similar (as far as I know I cannot unwind a leverage using Coinbase price). TBH I already assumed I simply lost the deal there, yes that 0%, or even 2% and then PSM was a life saver; but the wrong decision was taken by myself in September, I definitely think that I shouldn’t complain, it was a bad decision as a keeper, that’s all (as somebody said above, sometimes you win, sometimes you loose this game). But of course, if something miraculous happens and we see a push back to those levels, then at least I will not loose the investment (which would be great of course!).

What worries me is what will happen if others (probably like me) doesn’t unwind those big leverages (not talking about a few DAI here), if those CDP are 100% abandoned, they will continue collecting fee forever?? (or a 0% like the action plan for stablecoins will take place and will apply forever to that CDP, I wonder if we should have a zombi CDP as long as the DAO lives with a bunch of USDC on it).

The Vault doesn’t really keep “collecting” the fees. It just goes to the surplus buffer, so as long as governance continues to raise the buffer above the bad debt coming from the stablecoin vaults, there shouldn’t be an issue.

I’ll put a specific example. Somebody invested 10k USDC in Sept and made a leverage to tens of millions of USDC - DAI. That’s quite an important amount IMO with fees between 500k - 1M DAI per year. On Dec 18th if all goes fine, PSM is activated but this person was not able to break even (I don’t think he’ll unwind his vault when it simply recover some 500DAI or even 1000DAI, probably not interested in less than 5k). For Dec 18th (or one week later, after the vote is approved and PSM “published”) then he’ll need already DAI to worth 0.999 for breaking even. Fees continues accumulating (PSM doesn’t set fees to 0!). For January he’ll need 0.99 or lower DAI values. CDP will be abandoned with tens of millions of USDC and fees in DAI being sent toward the surplus buffer.

Till when will we be obliged to keep a growing surplus buffer for maintaining this (and maybe others) CDP “printing DAI”?

Not sure if it makes sense. And yes, the situation above is real!

To be clear, I was just saying that the fees aren’t actually being collected by the protocol if the Vault is <100%. Once a Vault goes below that threshold, we as the Maker community should probably just consider it abandoned for all intents and purposes. I think the PSM is going to be a great tool, but for the Vaults that are too far gone we can just liquidate those once the the new liquidation system is in place…there’s not really any rush to do it.

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Ah sorry, yes that’s fine! I’ve not read that much about the new liquidation system and I guess that as a user I just see those fees being “added” to the debt, and sounds as if that debt is being “collected” somehow within the Vault. But probably that’s due to me not understanding the mechanic of it very well.

Then when those Vaults be at a 100.1% or higher, when the new liquidation system comes in, will we simply liquidate the 100%, and that 0.1% will be paid back (in some moment) printing new MKR, am I right?

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So I think there is still chance these vaults self unwind if DAI goes below 1. I am referring to a MKR on-chain poll where the vote passed to disable fees once leading vaults reach 100% CR.

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Even if you liquidate them at 90%, the other 10% is just sitting in the surplus buffer - where it will then be subtracted upon eventual liquidation.

For instance, imagine you’ve put 101 USDC into the system and generate 100 Dai, and your vault ends up being 90% collateralized due to fees (90 USDC backing 100 Dai). When this vault is liquidated, it will register as having 10 Dai of bad debt. Since this Dai is just sitting in the surplus buffer, it’s subtracted from the total and no MKR is minted. So long as you can efficiently liquidate without much slippage (which the new system will allow us to do), the fees and CR can be anything so long as we make sure the Dai stays in the buffer.

EDIT: Made a mistake on the initial debt

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I need dai-price to be around 0.9985ish to break even. But in just a few weeks this will be closer to .999. Waiting until Dec 18th and PSM, will basically mean all lost even at a dai-price of 1.

But yes I agree with @smaugho the mistake I made was in September when I decided to be a keeper, with way too big a fraction of my bankroll.

If DAI is significantly less than 1, the stablecoin library will automatically correct it. It provides us with protection against the sharp depreciation of DAI, so there is no problem and everything is fine. After implementing PSM, everything will be better.

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