Some very good points in your discussion , I will try to address some.
MakerDAO doesn’t have any power in any statement it can make currently. There is no “whatever it takes” possible because leadership is decentralized in people no one knows. WBTC to capped by a debt ceiling for weeks before it gets raised. We have this issue for months now and we have tried 2-3 new policies, not even one per week. Moreover, the subject is very complex and we don’t have the manpower to do proper research on the topic.
I would argue that the Fed isn’t stealth. I’ve not seen any research on a spike in volatility on Fed meetings. The market and the economy dictate the Fed action more than the opposite.
Making power statement is powerful, and most of the time, the market front run the Fed so the Fed has almost nothing to do. The last example I have is buying corporate bonds ETF. The announcement was enough to get price in check. For government bonds you know exactly what they will buy each week.
It could be that having a USDC-M vault capped at 100M is 10x less effective than having a vault capped at 100 billions and it require less minting the later case.
The way I see it, the peg is taking most of our governance bandwidth. We let others fires burning. We lose momentum. I want to fix the peg because it should be easy to do (in this direction at least) so we can focus on others problems.
In my view, on this side of the PEG we should have:
- inside the range $1.0 < DAI < $1.005 the market should be able to fluctuate and market maker do the job to absorb small imbalance of supply and demand.
- at $1.005 the PSM should absorb a medium imbalance automatically with a buffer. It’s the outside spread from the money view so arbitrageurs have support.
- over $1.005 manual intervention should take place. It can be lowering the rates (subsidize the borrowing) or stuff like quantitative easing.
For the tax implications, that’s already here with earnings in the surplus buffer. At some point we may probably have to pay taxes. That’s not a near term problem. I would be disappointed if the first project being a government target is not Maker. That’s a success metric.
By design quantitative easing can be unlimited (let say billions of dollars), I don’t see how someone can go against. Most likely, we will stop before, but that’s a governance call. It’s the same problem with the PSM.