I have written here about reasons to increase Surplus Buffer due to potential inability to collect current and future accrued fees on debt from stablecoin collateral. I have tried to address some concerns that may have not been addressed before this poll where people voted in favour of not increasing Surplus Buffer.
I am going to run another poll, by proposing a 2m increase of the Surplus Buffer. At current rates and potentially implementing this increase on next Friday’s executive vote, this buys us about 5 weeks time from now before we hit it again.
Another reason for increasing Surplus Buffer that I haven’t addressed in my previous post but mentioned on the G&R call is that Maker currently has around 900m debt exposure, of which 420m is based on volatile collateral. Ideally Maker should be always aiming to have between 2% and 4% buffer available for loss coverage (these levels are based on risk premiums). In case Surplus Buffer is increased to 4m it would represent around 1% of debt from volatile collateral and is somewhat better than the current 0.5%. Although still not ideal in my mind, it is a step forward.
Should we increase the Surplus Buffer by 2m?
Poll is open until this Friday and will proceed to Monday’s on-chain Poll.