After the WBTC-A DC maxed out at 20m DAI for 3 weeks, MKR holders passed an executive proposal to increase the WBTC-A DC by 20m. This DC was maxed out after 9 hours. Currently DAI from WBTC makes up 10.5% of total DAI.
In a governance poll, MKR holders also signalled strong support for raising the WBTC DC to 34m, 61,127.33 MKR (100%).
Currently DAI has been above it’s peg since March. Recently, there’s been some discussion regarding expediting the governance process for debt ceiling adjustments.
There’s been strong demand to mint DAI from WBTC. Raising the WBTC-A DC aligns with MKR holders goal of increased DAI liquidity to defend the peg.
There are some very liquid curve.fi liquidity pools for WBTC swaps to renBTC and sBTC. Though it should be noted that WBTC liquidations have not been stress tested. Increasing the WBTC-A DC will also expose MKR holders to increased custodial risk, and BTC price risk.
One interesting point brought up in the Emergency Peg Management Governance and Risk Meeting on Wed July 29th is that the protocol has less direct exposure to speculation. DC room is mainly used for liquidity farming opportunities, making it easier for Vault holders to unwind positions during a price crash. Vault holders are less exposed to price risk.
As the base rate is currently at -4%, MKR holders are currently committed to subsidizing risk premia to increase DAI generation. Raising the WBTC-A RP is less urgent. Vote in this signal thread for a WBTC RP change. [Signal Request] Should we change the RPs for various collateral types?
Previous WBTC DC raise thread - [Signal Request] Should we raise WBTC Debt Ceiling?
Should the community take emergency action by expediting a WBTC-A DC raise and going straight to an executive proposal?
- Yes, Executive Proposal by Friday, August 7th
- Yes, Executive Proposal by Friday, August 14th
- No Emergency Action
WBTC-A Debt Ceiling Adjustment
- 40 million (no change)
- 50 million
- 60 million
- 70 million
- 80 million
Polls will close on 2020-08-06T16:00:00Z if “Yes, Executive Proposal by Friday, August 7th” is winning. Otherwise polls will close on Wednesday, August 12th.
Choosing “Yes, Executive Proposal by Friday, August 14th” gives more time for community members to vote on the signal request. If “No Emergency Action” wins, an on-chain governance poll will be placed on Monday, August 17th and an Executive Proposal on Friday, August 21st if the governance poll pases.
Please leave any thoughts, comments, or analysis below.