[Signal Request] Quantitative easing to fix the peg (aka Manual PSM)

True. Because of this we need to fix peg ASAP, otherwise there is no valuable reason to store your value in DAI.

This is literally the ONLY IMPORTANT THING that matters!
Otherwise people searching for stablecoins will go away from DeFi projects like DAI!

If we wait until liquidations 2.0 to do liquidations, it will be possible to force liquidations to happen only at 1:1 (by not letting the dutch auction decrease in value) and then doing it when the peg is below 1 USD so a 1:1 trade is better than the market

I oppose the whitelist. It monopolizes an arbitrage opportunity that should be permissionless. Whitelists should not be an alternative to security or good design.

3 Likes

It is not the only important thing. It is the least important thing of the 3 things:

  1. DAI should stay decentralized
  2. DAI should be tradeable for $1
  3. DAI should be backed by $1 of collateral

As we are witnessing for the last 6 months - we cannot have all 3 things at the same time so people searching for stablecoins are moving to USDC and other coins.

It is important that people understand that they might not get $1 in the case of the ES even if DAI is backed by $1 of collateral.

the problem is that people only look at results. No 1$ exchange ratio? Well, then they’ll just move to another stablecoin, no matter how DAI is safe and decentralized.
Even if DAI is an awesome project, no one will use it if it can’t be traded for 1$

Removing the whitelist (or a USDC-A LR at 101%) would be providing a profitable arbitrage to others while leaving all the risk on Maker. How fair is that?

We can say that USDC-M has an initial fee of 100% and open to anyone if that makes you better. Now, as no one will pay that except Maker (which pays to itself), can we agree to not implement it as it would be a waste?

The concept of whitelist is already used by Maker for OSM feeds anyway. RWA will likely not be permissionless neither.

“Creating arbitrage privileges with inadequate risk only compensated by the special position of the privileged trader” should really fire up alarm bells. Either the proposed vault is risk-adequate and should be open to everyone, or it is not and should not be open for business. I remember Maker repeatedly being called a Rube Goldberg machine early on by people who didn’t take the time to get the simplicity behind the concept. I don’t want to see that criticism become valid. The PSM had a slight Rube Goldberg scent. This form of QE has an even stronger smell.

4 Likes

Aight, so the end result of this is:

  • 24 Yes
  • 14 No
  • 17 Abstain.

Ignoring the abstain votes, that puts yes with a majority over no.

In general, this would be the sort of signal that I think fits better as a Declaration of Intent under MIP13. Especially given that the Foundation teams are not able / willing to implement it.

However, given the state of the peg and the DAI supply right now, I think this is reasonable to put on-chain as a poll next week. I will emphasise that the poll won’t really have any power to cause this to happen and someone outside the Foundation would need to pursue it in order for us to see results. However, it will open the door to a strong signal from MKR token holders that might prompt further action from the more technically minded community.

@SebVentures please submit a PR with the poll wording on the community github today, and I’ll put it on-chain next Monday. Happy to discuss the contents with you whenever.

5 Likes

The on chain poll result was against this proposal (19k for, 5k against).

MakerDAO decided in the meantime to push USDC-A at 103% (then 101%) which seems to work. I still believe that it would have been better to gives the profit to MKR holders. Moreover we are not able to diversify the current 200M USDC.

In the same time, I get the issue with MakerDAO having assets and manually manage them.

2 Likes