In the latest MakerDAO Risk Team Flip Auctions Report, you may have noticed lower Auction Efficiency for the ETH-B vault.
To incentivize Keeper participation we may want to increase the ‘beg’ parameter (auction bid increment in %). A higher ‘beg’ should make Keepers more comfortable bidding earlier, placing less risk for MakerDAO. It should be noted that ETH-A does receive a lot of participation, though there is still benefit to MakerDAO if Keepers are more comfortable placing earlier bids for ETH-B.
We may also want to increase the ‘chop’ parameter (penalty fee). Due to ETH-B’s lower Liquidation Ratio, ETH-B vaults have a smaller asset buffer at auction compared to other vaults. This represents a greater risk to the MakerDAO protocol. A higher ‘chop’ will also incentivize vaults to be more cautious to not get liquidated.
A side benefit of increasing Keeper participation is that we may be able to increase the ‘Box’ parameter.
- A higher ‘beg’ may result in lower penalty fees collected by MakerDAO
- Higher ‘chop’ and ‘beg’ may result in less collateral being returned to liquidated vaults
- Auction Efficiency may improve to counteract the penalty fee
- Vaults are incentivized to not get liquidated
- 3% - No Change
- 13% - No Change
This Signal Request will run until Thursday, February 25th. Winning votes will proceed to an on-chain governance poll on Monday, March 1st. Please leave any thoughts or comments below!