[Signal Request] Increasing the 'dust' amount

The ‘dust’ parameter is the minimum possible debt of a Vault. It is currently set to 20 DAI for all collateral types. This issue was brought up in the rocketchat by @cmooney.

Recently the price of gas on Ethereum has been going up. It’s no longer cost effective to liquidate dusty vaults due to the gas costs of the auction process. We also need to consider that gas costs could increase sharply during a liquidation event. There’s also the gas cost of cycling capital, and which can also be quite high compared to the profitability of a dust vault liquidation.

Another thing to note, is that opening a vault costs a lot of gas anyways. It’s not cost effective for users to make small vaults as well. (It can cost more than 550k gas to open a vault. That’s $9 at 50 gwei.)

Considering these gas costs of these actions, the dust amount should probably be raised to 100 DAI or higher to ensure ‘dust’ vaults are cost effective to liquidate.

Auction costs: Used $320 Ethereum

Gas Used Gwei: 100 150 200 250
Kick 257k $8.22 $12.34 $16.45 $20.56
Tend 100k $3.20 $4.80 $6.40 $8.00
Dent 86k $2.75 $4.13 $5.50 $6.88
Deal 52k $1.66 $2.50 $3.33 $4.16

Increasing the ‘dust’ amount

  • 20 DAI
  • 50 DAI
  • 100 DAI
  • 150 DAI
  • 200 DAI
  • 250 DAI
  • Abstain

0 voters

Polls will run for ~1 week from July 29 to Aug 5. Please leave any thoughts, comments, or analysis below!

@monet-supply @MakerMan

5 Likes

I’m leaning towards $50 for now. I dislike what the user experience is for new DeFi users, and $100 just feels too much (acknowledging the risk)

3 Likes

We can assume that L1 costs will soon be so high that only transfers and very optimized contracts would be worth running on L1 unless transferring more than $5k. Sure, we should optimize but unless MakerDAO has its own L2 solution - it will be hard to compete with other projects/stablecoins.

Given the current gas costs I doubt it is a good idea to open a CDP for 50dai

2 Likes

For some figures on the gas cost of opening a vault. It costs more than 550k in gas. That’s $9 at 50 gwei.

1 Like

Wow that’s a 0.9% effective origination fee on 1000 DAI loan. I’d prefer to up the dust limit to 1000 DAI considering the gas costs - we can almost consider it a usability issue like slippage warnings on DEX. Opening a small vault is just not economical at this point.

1 Like

Polls close in 1 day.

Just a friendly reminder that poll wording should be submitted on the community github here https://github.com/makerdao/community/tree/master/governance/polls by end of day. Please tag me as a reviewer on the PR.

1 Like

The poll has ended. The community has signalled support for increasing the Dust Parameter from 20 DAI to 100 DAI for all vaults.

PR for an on-chain governance poll - https://github.com/makerdao/community/pull/710

Breaks my heart that the barrier to participation is at least $100

2 Likes