Parameter Changes Proposal - PPG-OMC-001 - October 1st 2021

Parameter Proposal Group: MakerDAO Open Market Committee
Authors: @Primoz @LongForWisdom, @Monet-supply, @SebVentures, @Akiva, @hexonaut, @ultraschuppi

The Open Market Committee has observed no substantial change in the competitive environment since last month.

We have noted that revenues continue to support our Core Units and that we are also making revenues from liquidations on a sporadic basis.

Over the next month we will continue to monitor changes from the economic environment and ongoing collateral onboardings. We anticipate that USDC can and will be cleared out of the portfolio eventually but not within the next month. We also anticipate a growing surplus buffer which can anchor MakerDAO as a creditworthy institution.

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Here’s our collected interest rate data for the previous month: Risk Premiums & Competitive Rates October 2021 - Google Sheets

Changes:

  • No longer covering KNC or USDT collateral types due to offboarding
  • Added details for GUNIDAIUSDC and MATIC due to onboarding (MATIC uses data from Aave Polygon market for competitive rates)
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Not a formal position, but have we thought about adding some nominal fee like 50 or 100 bps to UNI DAI-USDC? I don’t think I know how much yield they tend to provide, so not sure what the holders could bear and still have a reliable spread.

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Due to the massive leverage on UNIV2-DAI-USDC even a small fee may be enough to cause the pool to unwind. Previously the fee was around 0.5% and the pool was barely getting used. With such low fees in the pool you probably don’t want to go over 10 bps, and at that point is it even worth bothering. We’re going to get a lot more bang for our buck with the G-UNI version as the fees are much higher.

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