Yes, you are right, risk team has in the past given guidance that the surplus buffer should be in a range of 2-4% of debt issued from volatile collateral in order to absorb losses. With 586MM Dai issued from volatile collateral that means our buffer should be between 11.7 and 23.4 million Dai.
Right now our coverage is 0.68%. I suggest we bundle an increase of $250k in the stability buffer each week. In that way we will reach the 2% coverage level in 31 weeks, and roughly $30k of protocol income would still be used for buying MKR. The proportion of of income used to burn MKR would increase as more loans are issued and more stability fee income is collected.
Alternately, as you suggested, we can look back at the total fees collected in the previous week, and increase the stability buffer as a percentage of that.
We can continue this until we reach the 2% coverage level, at which point we can decide to anchor the surplus buffer to 2% of volatile Dai supply or do something else.