[Signal Request] Increase PAXUSD-A Debt Ceiling

Now that USDC/TUSD/PAX have a liquidation ratio of 101% we are seeing a lot of usage out of these vaults. USDC was just increased to 400M and TUSD to 50M. PAXUSD recently maxed out at 30M and unless we increase will probably stay there for a while. Therefore I wanted to request a signal from the community on whether we would like to increase this debt ceiling further. I believe it was initially voted on to increase to 100M here but I missed why it was changed to 30M. I also heard in rocketchat that some believe PAXUSD may just get abandoned as its hard to unwind. Perhaps @cyrus can speak to this.

Please vote for all options you agree with.

Should we increase the PAXUSD-A Debt Ceiling?

  • No
  • Yes - Increase to 60 Million
  • Yes - Increase to 80 Million
  • Yes - Increase to 100 Million
  • Yes - Increase to 120 Million
  • Abstain

0 voters

Polling will run until 2020-09-23T04:00:00Z or a clear winner is determined with 40 participants or if @risk determines to increase the DC themselves.

4 Likes

It’s difficult to source 15M of PAX that may be needed for auctions. But I fail to see how that change from 30M to 120M.

Strategically we should help non-USDC stablecoins.

3 Likes

@SebVentures, I agree with you (even if I abstained this specific poll due to lack of knowledge on the risks of PAXUSD hinted by Aaron).

But I am worried that the current general sentiment seems to be:

ok we already assuming so much risk, so let’s increase it even further, it doesn’t change very much at this point.

I guess this is the only viable approach now, but when we find other ways to keep the peg under control (a lot of discussions on this) beside embarking stablecoins, I hope we can get back to more reasonable levels of risk.

Yeah I wasn’t clear. Increasing the PAX-A DC doesn’t change the liquidation risk anyway but decrease the concentration risk on USDC-A So it’s good from a risk perspective for me.

On the same time, from a business strategy perspective, avoiding a USDC monopoly is good for DAI and Maker.

Finally, I wanted to add that, as you said, we shouldn’t focus to much on managing stablecoin in details. We should focus on onboarding good collaterals.

2 Likes

I would be a bit cautious by how much it gets increased from here, although I do support diversified stablecoin exposure. This is how PAX liquidity looks within most liquid stablecoin venue right now.

If we’d potentially need to unwind PAX vaults through manual liquidations and using liquidations 2.0, this situation with low PAX liquidity in DeFi is not very appealing. I’d rather see TUSD exposure to overtake PAX.

Note also that PAX exposure increased mostly because USDC-A DC was reached and due to free arbitrage day before 101% LR kicked in.

4 Likes

For auctions you just need to be able to source DAI. For big keepers, they can convert the PAX collateral they bid on 1:1 with USDC/USDT/TUSD/… at FTX.

I think it’s a good idea to increase the PAXUSD-A DC to diversify our stablecoin collateral holdings.

5 Likes

Note the TUSD-A Vault is currently not enabled for any public UIs. Instadapp, DefiSaver, Oasis.

2 Likes

Friendly reminder that poll is closing tomorrow.

I would just like to remind participants that the risk team is recommending slower DC increases due to lack of liquidity. [Signal Request] Increase PAXUSD-A Debt Ceiling

@chris_hamby @Jack_Branum @mahercbeaucoup @zkwartler @Paxos_Kyle @paulchevs @dink @vfurman @mcm @Charlie @Brent_Perreault @kfc25 @xfantle @nuke4u

You all have suspiciously new accounts which are voting in this poll and not interacting within this forum in any other meaningful way. Given that

  • This poll is directly related to PAX
  • And that @Paxos_Kyle directly identifies as part of PAX
  • And that most or all of the votes are for the maximum debt ceiling value

I’m assuming that most or all of you are Paxos employees, and are voting in this poll because someone from Paxos either told you to, or shared the link and suggested that it would benefit the company if you voted.

I would recommend that everyone discount these votes when counting totals here. To those involved, please don’t do this, it doesn’t lead to goodwill. These polls are open to all, but the expectation is that those voting in them are part of the Maker community, or at the very least making an effort to communicate and engage with the Maker Community in an upfront way.

@rafael.cosman of TUSD and @spin of Centrifuge are good examples of individuals belonging to outside organizations engaging with this community in a healthy and upfront manner.

13 Likes

@LongForWisdom Apologies - this post got shared on Paxos slack and a number of employees new to the Maker community voted today. We’ve encouraged everyone at Paxos that voted in this poll and wasn’t previously an active member of the community to remove their vote. As you probably guessed by our response, we’re really excited to be working with the Maker community as well and will keep this post in mind for future participation in any polls relating to PAX or Paxos.

8 Likes

Appreciate that, thanks. This has happened before with various groups and will happen again. I’m sure there was no ill intent from you guys.

Would love to have Paxos people participating more in and with governance generally. Though as a courtesy if you guys can identify yourselves in your profiles that will make my job a lot easier.

8 Likes

@LongForWisdom Also sorry for the poor etiquette - longtime forum lurker. Decided to vote as a user of ETH-A and USDC-A vaults in the general interest of peg restoration.

1 Like

Polling is now closed. Looks like 100m is winning and so I will put together a pull request for addition to next weeks governance cycle. It also looks like PAX will increase to 60m in this Friday’s executive. Thank you to everyone who participated!

3 Likes

This signal request is now on-chain here. If you would like to see this change (or not), please vote!

2 Likes

The on-chain poll subsequently passed on-chain, and was executed on October 4th. This brought the PAXUSD-A Debt Ceiling to 100 million DAI.

Thanks to all for voting.

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