[Signal Request] Adjust ETH-A Debt Ceiling (2021-01)

Overview

ETH-A is currently at ~88% utilization. There has been a steady increase in the last months.

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This poll is about changing the DC to allow more DAI from ETH-A. There is a similar poll for the ETH-B collateral type as well - but that one has a higher stability fee and a lower liquidation ratio.

Pros:

  • more fees collected
  • more DAI in circulation

Cons:

  • I personally do not see any, as ETH is still the most liquid and robust asset-type we have in the portfolio, but I am happy to adjust here if people raise good points in the discussion

Ceiling adjustment

  • 740 MM (+ 150 MM)
  • 690 MM (+ 100 MM)
  • 640 MM (+ 50 MM)
  • 590 MM (no change)
  • Abstain

0 voters

Next Steps

Last time we raised the ETH-A Debt Ceiling the @Risk-Core-Unit team proposed a increase on their own but were influenced by the corresponding community poll - this is the corresponding community poll :wink:

The poll will run until January 14th; its outcome will either result in a on-chain-poll assuming the outcome of the poll deems it necessary or there will be a corresponding on-chain-poll taking the (intermediate) result and the proposal by the risk team (maybe the SF needs to get adjusted?) into account. I guess raising the ETH-A-DC might be a topic for the first governance call of this year already?

6 Likes

I really would like to see the IAM in action for ETH-A too, but I don’t know how the plan is about adding it to ETH-A.

2 Likes

I believe we “just need” to find a fix/ workaround to the issue highlighted by the risk team.

Thanks for this post! I voted for 740m (+150m).

However this number seems a bit arbitrary, out of “gut feeling”.

Even if I know that this was discussed some other times, I wonder if the time is now mature to start thinking & implement a DC/SF automatic adjustment system.

For example we could weight in some factors such as:

  1. price of ETH
  2. averaged growth/loss in price of the last 3 months
  3. % of ETH collected in ETH-A vaults (currently ~2.3%)
  4. Current utilisation of the DC (currently 523/590, i.e., ~88%)

and spit spit out (read: onchain algorithm Alg) SF and DC parameters.

Of course the algorithm Alg can be updated whenever we want via governance.

But it would, imo, provide a more ‘scientific’ approach to SF/DC scaling, and possibly an easier to handle one, compared to all the time voting more-or-less arbitrary numbers.

Remark: this is in no way urgent and possibly not even necessary. It’ just something that I think should emerge sooner or later because it makes sense.

2 Likes

I argue that the current non-automated, human-managed debt ceiling is similarly vulnerable to attack. Hence, I encourage switching to the IAM because it doesn’t seem worse than what we already have.

5 Likes

@Joshua_Pritikin thanks!!!

I had missed the majority of the discussion around the IAM, it’s hard to be on top of everything happening here, isn’t it!? :clap:

It’s great that the building block is already in place.

in the meantime utilization is at 95% (only 37MM headroom). in parallel USDC-A-DC has been hit again, everything looks a bit more urgent now

We should adopt IAM as it is better.

4 Likes

ETH-A DC filled up. Do we have to wait till Friday for an executive vote to raise the DC? It sucks seeing the limit hit and no more DAI can be minted

an emergency exec is being prepared soon™

6 Likes

here it is, the urgency executive (this is not an emergency as outlined in MIP24): [Urgent Executive] ETH-A, USDC-A and PSM-USDC-A DC increase

2 Likes

thanks everybody for participating in this signal request. your participation helped on making a decision on the urgency executive. we will have more DAI tomorrow :slight_smile:

4 Likes

Is there another poll/executive vote to increase the DC for ETH-A? The utilization is at 90% now.

Looking at the overall market it looks bullish, can we increase more than 150M at a time? It seems like the DC is being consumed at a very fast rate.

How about ETH-B DC? Any plan to increase? It has been maxed out for a while

Personally, I think we should concentrate on ETH-A DC increases. (Instead of ETH-B too) There’s demand for ETH-A, and this will manage the risk exposure better.

2 Likes

As the price of ETH increases, we should focus on ETH-A and increase SF every time DC is raised. Regarding ETH-B, I think the DC should be added after the deployment of Clearing 2.0.

1 Like

I think we should substantially raise ETH-A debt ceiling and probably also the stability buffer. This bull market has room to run so we should strike while the iron is hot.

1 Like

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