We are approaching a point where fixing the peg with stablecoins won’t be possible without having a great majority of collateral locked in centralized stablecoins. From past experience, it’s clear to me that the problem (peg) won’t go away if we add just another 100M of stablecoins to the books.
Instead of waiting a month or so for this to happen and losing more market share and reputation because of being way off the peg - I suggest a new approach. Let’s print 100M DAI, buy ETH and deposit it as collateral that we keep on our books for as long as we decide. Assuming we buy ETH below $450, we can keep it (sell for DAI and cancel the debt) until:
- 1 DAI = $1 OR
- 1 ETH = (insert any value here, i.e. $600) OR
- the emergency shutdown OR
- until needed (as a kind of surplus(hopefully) buffer) OR
We can have a separate discussion/governance poll about what to do with the ETH collateral.
- 100M DAI will be sold immediately for ETH bringing the DAI price down.
- decreasing dependence on stablecoins
- the announcement and the purchase of ETH could start the positive loop and keep the ETH price above our purchase price avoiding the system being undercollateralized.
- DAI may become temporarily or permanently (if ETH price never goes up) undercollateralized
- probably needs some manual action for execution
- sets a precedent (this is not good, right)
- 100M might not be enough to lower the DAI price to $1
So, should we print 100M DAI, buy ETH with it and deposit it in a vault?
All the technical details could be worked out later if there is a will to use this method. If you like (not hate) this method but you are afraid that we won’t be able to execute it successfully (i.e. ETH price moving too fast, the amount is too big/small, problems with unwinding, other complications… please vote Yes and No)
The poll will be open for 2 weeks unless there is a majority for “Yes” who wants to move faster with the implementation.