- Stablecoins that will be included in PSM
- Debt Ceiling per stablecoin
tout parameters were already decided by MKR holders (0.1%
tin and 0.1%
Based on PSM Risk Assessment, MakerDAO could well add another 200m or more stablecoins to its collateral portfolio if PSM were to be implemented with 0.1%
tin and 0.1%
tout parameters. Also we need to keep in mind that low LR stablecoin vaults should be replaced by PSM in short to mid term (either through refinancing or liquidation into PSM). This means PSM might in the upcoming weeks or months hold around 700m stablecoins which would represent up to 55% of the DAI backing.
1. Stablecoins supported by PSM
Governance needs to decide how it wants to diversify among stablecoins in PSM, where stablecoins suggested by @Risk would be USDC, TUSD, PAX and GUSD. Here I want to note there were some arguments that since stablecoins have binary risk (being worth 0 in very rare events or worth $1 most of the time) it might be that diversification doesn’t necessarily imply good protection. In other words, if you think any of stablecoin that totally fails might destroy Maker, why not just pick one that is the safest and most liquid, which may be USDC.
Also it seems that implementation of PSM with many stablecoins included could potentially delay actual implementation of PSM, although this shouldn’t really affect risk based decision here.
2. Debt Ceiling per PSM Vault type
First, if governance prefers PSM usage versus low LR stablecoin vaults, Debt Ceiling would need to be decreased to 0 for USDC-A, TUSD-A and PAX-A collateral types. On the other hand, Debt ceiling would need to be equally increased for PSM Vault Types, plus additional increase to reach $1.001. This unfortunately means that Maker would have very high available exposure for stablecoins backed debt until stablecoin vault to PSM refinancing or liquidation is performed.
Again, it all depends on how quick governance wants to move, and what kind of efficiency of PSM and effect on the peg it expects in the short term.
The first Poll below asks for starting total PSM DC that is planned to be implemented on 18th December. I am describing here what each Debt Ceiling value represents in practice:
250m - estimated amount needed to reach $1.001
500m - a bit of extra buffer if current stablecoin vaults refinance/liquidate to PSM
750m - current stablecoin debt exposure plus estimated amount needed to reach $1.001
Note that if selected PSM DC is higher than 250m, 0 DC would be proposed for USDC-A, TUSD-A and PAX-A vault types.
- Equal Weight among selected stablecoins
- USDC having at least 50% weight
This Poll will run until this Friday 11th December.