I posted this as an idea in a few places.
Here is a thread that went no-where probably because the idea wasn’t clearly laid out.
If we want to further incentivize players to borrow DAI governance could offer MKR as a DAI borrowing reward to all vaults. Using MKR to incentivize additional borrowing would allow us to raise SF rates. By offering more MKR value than the DAI being received in the SF is potentially a valid way to do the following:
- Allows for Maker to create negative rates by offering more MKR value than DAI fees raised by SF in surplus.
- Encourage more borrowing (may not be good if this drops CRs)
- A more robust sell/buy MKR economy and hence more MKR - DAI liquidity generally.
- A way to set positive SFs and balance these with MKR reward to increase capital flows around MKR-DAI pair.
- Another way to distribute MKR more widely and possibly get vault participation in MKR governance.
Generally the thinking is that with SF at 2% we could offer 1% MKR mining reward for borrowing and 3% SF to give an effective 2% fee rate. Or we can offer 3% MKR return with a 2% SF to give a -1% negative rate to borrowers.
The con here is that it would apply to all current borrowers and also that it would dilute MKR potentially but this could be offset by surplus buying back MKR.
To this end I am putting up a simple poll on the subject to gauge governance on the topic and whether this should be persued in detail or not.
A Yes basically means persue the topic.
No means don’t persue this, and Abstain/Invalid you can give your own reasons for why you chose those options.
- Yes - governance should pay MKR to DAI borrowers to incentivize borrowing. (offer MKR farming)
- No - MKR should not be used.to incentivize borrowing
- Abstain - I can’t vote for or against for some reason. Please note reason below.
- Invalid - I believe the poll to be invalid. Please note reason below.