I definitely agree that with any sort of positive fee, and without reliable auctions, the USDC LR needs to be significantly higher. But I don’t think the value of getting a bit of MKR buy and burn is worth much when the cost is a worse peg (in a situation where the peg is already broken and has been broken for a long time). I also don’t think having a lets say 5% SF on USDC for 6 months would help make any difference if e.g. coinbase failed.
On the other hand I think that having shown user growth and better momentum for the project by delivering a more acceptable user experience through a less broken peg, would probably make a big difference, because it would impact whether the market would be ready to buy a lot diluted MKR if some sort of big catastrophe happened. <-- thats really the crux of my argument - I think people who want to be conservative with risk parameters believe they are reducing risk to the system, when IMO it is potentially doing the opposite if it’s making the UX and growth prospects significantly worse.
Obviously the ideal situation is a world where there is plenty of collateral and a decent DSR, and diversified stablecoins available as collateral at low LR’s with high enough SFs to properly account for their risk from a risk management perspective.
I also think the idea of a direct liquidity/stabilization mechanism built into the DAO is very interesting. It’s something that I’ve considered too radical in the past but now we’re post black thursday and getting into the defi free money bonanza I think it should be considered more in depth by the community.
But back to the topic of what to do in the short run: Ultimately it’s not my decision what gets up for a vote - For risk decisions like this I’m just another voice in the community, so ill support any measure that can help. The most important thing is just that we do something, and that we always take a broken peg seriously.
The biggest risk IMO, is the market losing confidence in the commitment of governance to maintaining the peg.