Request to raise the GUNIV3DAIUSDC1-A DC to 500M

Request to raise the GUNIV3DAIUSDC1-A DC to 500M

Risk and Protocol Engineering Core Units would like to put forward the following community request for raising the G-UNI DC to 500M.

Since this collateral went live, the debt ceiling has reached capacity at 50M.

Along with a debt ceiling increase, this proposed change should also include the following parameter changes:

  • Liquidation Ratio lowered from 105% to 102%,
  • Stability fee lowered from 1% to 0.5%

A 3rd party audit has successfully been completed and did not find any issues. This document will be shared when formally published by ChainSecurity.

Please voice any concerns or objections you may have to this proposal as GovAlpha will move this forward to an on-chain poll for MKR holders to vote on Monday 8th November.

21 Likes

Given the demand, why do we want to lower the SF?

3 Likes

FYI with PSM tin/tout going to zero I see no reason for anyone to trade DAI-> USDC or USDC->DAI on uniswap, curve or anywhere else. We can raise this DC (and probably should) but once the fees dry up here I expect/predict this vault use to decrease.

If we wanted to see this ramp up we should set the PSM tin/tout to 20/20 and maintain a .4% trade spread and this vault use would probably ramp up. The beauty of fees is everyone gets them, and friction can be a good thing.

6 Likes

@PaperImperium my expectation is that as the pool size increases, the APY will inevitably come down so we want to remain competitive in this space. I welcome others, particularly Risk and Growth to correct my thinking here if there are counter views.

@MakerMan Re: PSM tin/tout. My personal view is that there should be a spread, I agree with you, a little friction is good, but it looks like the poll to move to 0 fees is currently winning.

6 Likes

Yeah it is entirely unclear whether I should try to speak with other delegates about this. Time is running out. :frowning:

@twblack88 @ElProgreso - you two alone are passing this. Precisely why do you believe we need to kill the stablecoin-DAI spread? Because if the poll is approved your basically telling all markets on L1 in particular in stablecoin-DAI to fold up shop. Realize anyone wanting to go from one stable to another can do it with 0 fees (killing USDP, USDC markets as well). Passing this will signal a death knell to the GUNIV3DAIUSDC vault.

9 Likes

You have me confused with someone else

1 Like

My apologies @PaperImperium I hit the wrong LLC delegate.

1 Like

Perhaps your vote/thinking focus more on the short-term fee component of Maker versus the long-term outlook. As I stated on the Flip Flop Flap Delegate platform, this Vote is about DAI being accepted as a stable asset versus a volatile currency that some might interpret, as something that is here today and possibly gone tomorrow. DAI needs to be identified as the best stablecoin available in Finance. I respect your view, but as I told you directly I will stay firm. Risk is real, fear is a choice.

2 Likes

I think he’s partly tip toeing around do we think Maker is more or less likely to be blacklisted than our (value weighted average) LP pool.

If you have faith Maker will be a compliant entity, then it makes sense to kill off stable-stable pools to get integrations and market share. If you think Maker will continue as it has, then the strategy of diversifying that by having LP pools hold the coins is a very solid one (aside from raising revenue).

The revenue isn’t unimportant, but I don’t think that’s the most important thing.

Perhaps? My view is we want to actually support liquidity and reasonable fees to create a large and growing stablecoin/DAI trading market. This move will actually crush trading in not just USDC-DAI, and USDP-DAI but also USDC-USDP by proxy and as Maker adds more of these PSMs with tin/tout at zero it is going to cross an even broader swath of these markets.

Has noting to do with being blacklisted but completely has to do with having robust markets and liquidity sources to trade. This is about free markets and price discovery to support liquidity. At some point if we do enough PSMs with 0 fees to DAI someone is going to look at Maker as having a monopoly on the stablecoin ‘markets’ and price fixing. If this is in conjunction with a market loss event. Well then likely game over for Maker.

The numerous other hazards I have already commented on in many places.
Fortunately with choices eventually come consequences. Everything can look great until it doesn’t and by them the window to act will likely have closed.

2 Likes

Because I don’t think it will “kill it” that fast? You’re reasoning is solid but I think it’s a bit of “cart before the horse” if it matters. I think we have more than enough time to adjust if this is the wrong path, and paper is already polling for that.

PSM = arbitrage. GUNI = leveraged LP. They’re not the same? Am I missing something… (probably!).

Also, I’m not 100% sure the tin to 0 is the perfect decision but reducing the pressure on growth CU to me is more important. I believe I said that in my vote reasoning.

3 Likes

That’s how you know it fails. Literally never gotten a SR through except the one that died in polling

1 Like

My expectation is we will not be able to reach 500M at a SF of 1%. As soon as the APY drops below the SF the pool is no longer profitable and will unwind. 1% may not seem like a lot, but at 50x leverage this is 50% to the end user.

4 Likes

The poll for this proposal passed yesterday! The changes are now up for an executive vote here - Maker Governance - Proposal Parameter Changes, Return Unused Budget to the Surplus Buffer - November 12, 2021.

If this executive proposal is approved, changes will go live after the GSM Pause.