Proposal: Add Governance Delay to Single Collateral Dai

A few weeks ago, the Governance Security Module delay parameter was increased from 0 seconds to 86,400 seconds (24 hours). The GSM protects Multi-Collateral Dai from Governance Attacks, but does not yet protect Single Collateral Dai.

Right now, SCD and MCD are linked via the Migration Contract. Sai is a special collateral in MCD that the Migration Contract can access. It provides a two way bridge between Sai and Dai. The maximum amount of Sai that can be used to mint Dai is 30MM.

I’m proposing we reduce the maximum amount of Dai that can be minted using Sai down to 10MM. The largest CDP 3088 is around 8MM so it’s still enough for it to migrate, and it reduces the maximum surface of attack.

Additionally, I propose that the Governance Security Module is also activated for Single Collateral Dai. This does not require any additional deployments since SCD will use the same GSM as MCD. It only needs some rerouting of permissions so any governance action taken on SCD has to pass through the GSM and be delayed by the set delay time (currently 24 hours).

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I wanted to say great job on working this up Mariano!

Only 1 question and I agree Maker needs to limit SAI-DAI minting. Is this 30M SAI-DAI minting now matched to the SCD debt ceiling? If so does the above proposal of lowering the 30M to 10M basically a request to lower the SCD SAI debt ceiling or is it doing something else (changing a different parameter related to the bridge)? I think it should be easy to garner consensus around this but just want to make sure we all understand what is being proposed.

I add a genral note here regarding my current take on the SCD. I would advocate that given the bridge is up and SAI can be exchanged for DAI to the tune of a few million now that we should crank the SCD debt ceiling down to 21.51M. I see no real reason why we need to have any headroom in the debt ceiling in the SCD when we have the bidirectional SAI-DAI bridge in operation with >5M available and a larger DAI to SAI market now (by a factor of 5).

For various reasons I think over the next few months we should get a last push of movement out of the SCD SAI-DAI MCD… After that I don’t expect too much movement but also do NOT see a reason to necessiarly shutdown the SCD other than to limit any additional minting by setting the current debt ceiling AT the current SAI debt minted there and adding the GSM above.

EDIT ADD: I just noticed today the outstanding SAI dropped by 1.2M to about 20.2M today so I think giving people time to move is working actually. It will take some time for out bigger players to perhaps finally come back to settle their CDPs so I am still hopeful that migration continues provided we keep the system open for people to migrate and simply mitigate any hazards. I also don’t think too much time should be spent on managing the SCD system other than to add the GSM and watch the auctions and lower the DC and make sure the SCD SF is always higher than the MCD SF by at least 100bps (1%)

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This was a duplicate post - deleted.

In this case I’m only suggesting that we drop the maximum amount of Dai that can be generated in MCD by using Sai with the Migration Contract to be 10MM. Nothing is assumed about the Single Collateral Dai debt ceiling.

It’s true that now they go hand in hand, ie there’s a 30MM Sai debt ceiling and it corresponds to 30MM max Dai that can be generated on MCD with Sai, but it doesn’t need to be correlated.

I would rather not discuss the actual SCD debt ceiling myself, but would leave that to you and Governance to propose.

Is this a 10MM limit per transaction, or 10MM ever?

10MM overall. So right now there’s 6.3MM Dai from Sai as per daistats.com

If more Sai migrates to Dai, even if it reaches the ceiling of 10MM it would still be enough for the largest CDP 3088 to migrate too.

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Mariano thank you for the reply. So will we have another parameter added that is the maximum amount of DAI that can be minted using SAI in the migration contract and the dc will be left alone.

I still think we should just clamp the debt ceiling on the SCD now to the outstanding debt + 1 or 2% as it completely limits any additional capital risk exposure in the SCD. But know this is a seperate topic from the Proposal.

Thank you again for explaining Mariano!

One other thing that I just thought of. Shouldn’t the maximum mintable in the contract be something like 10M or the dc which ever is less rather than a hard limit of 10M? Meaning what would happen in the SAI DC was 5M and one had a seperate variable in the migration contract that said I could mint 10M?

This is not a new parameter! We already have an use it, it’s just the same as the Sai debt ceiling currently.

If Sai DC was 5M and migration contract was 10M, you still couldn’t mint the whole 10M, because you’d need 10M Sai and there’d be no way to get them.

Sounds good!

thanks again for answering Mariano. I was a yes when you posted the Proposal! :slight_smile:

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Unless any forced migration comes without the stability fee I am absolutely totally against it!

"I am still hopeful that migration continues provided we keep the system open for people to migrate and simply mitigate any hazards. "… Happy to hear reasonable voices here.