Question on USDC Vaults

I’ve opened my first vault. To my understanding, the USDC price for vaults is hardcoded to $1.00 rather than using an oracle. That makes me think that there is no possibility of liquidation and withdrawing DAI all the way down to the 120% minimum ratio is perfectly safe. However, the GUI keeps warning me about putting my vault at risk. What am I missing here?

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So currently, in practice two things would need to happen for you to be liquidated if you opened at 120%.

  1. The Vault Fee for USDC-A would need to be above 0% (it’s currently about to change to 0%.) The Vault Fee is added to debt, so this can push you under the liquidation ratio.
  2. Liquidations on USDC-A would need to be enabled by governance (they are currently disabled for USDC-A.)
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I have a USDC vault as well and you are not missing anything AS IT STANDS now. BUT governance can change the Stability Fee on you driving you immediately into liquidation territory. This by itself isn’t a big deal. The problem is enabling Liquidations which the longer we put this off the lower the LR will have to go to not liquidate people under the 120LR now. So the problem here is if liquidations are turned on as well.

Try to keep your CR something north of 120%. I do like 121% just so I have at least a couple weeks to cover this in case everything is turned on. The issue will be USDC USD pricing so I may end up nudging this up 5% to 125 so .95 USDC to USD doesn’t become an issue. The other problem is if DAI rises above $1… Right now we are basically safe but this could change at any time. Inherently I am not entire comfortable with this but for now will take advantage.

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