Due to current market conditions and the state of the peg, I thought it might be good to start a discussion on whether the community would have any appetite in adding MKR as collateral to the system. I know this is, and will probably always be, a contentious topic but I know a portion of the community is open to this idea and is worth exploring if it can be done properly. Here are some pros and cons that I can think of. I look forward to adding more as the community weighs in. If the poll gains traction I can take it to the next steps.
- High market cap collateral option
- Takes MKR away from secondary lending platforms
- Positive price impact during “good” times
- MKR in vaults is MKR not voting
- During market downturns, MKR vaults could contribute to death spirals (price drops so MKR vaults have to sell to cover liquidation so price drops more, etc.)
- Moral Hazard and Emergency Shutdown
Should we consider adding MKR as collateral?
This poll will run for 1 week to provide ample discussion if necessary and not too long in case there is any traction. If you can think of any other pros/cons I will be sure to add them to the overview. Looking forward to hearing the communities thoughts on the matter!