Looking at DEX liquidity I estimate that around 150m DAI would need to be minted to arb versus USDC, USDT and TUSD to push the price down to $1.01 (assuming 101% LR vote on Friday is realistic and this is already our target in regards to DC increase). There’s additional demand on CEX and other pairs, so the final figure may be potentially around $250m DAI?
The 133m DAI that is currently in SAFE/DAI pool on balancer will be probably released back when farming stops end of this week. But I think we just learnt we always want to have 100m-200m buffer available to defend against these farms that can pop up out of nowhere.
What I also think is that we shouldn’t be really constraining ourselves or being fooled that doing a smaller rather than larger increase of DC for stablecoins makes Maker any more safer at this point. Also, if speculators and arbitrageurs believe that 101% LR on Friday is realistic, they will already start shorting DAI this week until DC is reached.
So we can either increase DC already now by 300m to accommodate for Friday’s potential 101% LR outcome if we want to pursue that strategy. Or make a “smaller” increase (100m?) so that we make sure DAI price doesn’t go up from here and then do the real one on Friday, when we’ll have more information on the potential 101% LR. The other issue is we don’t know how much more DAI goes into SAFE farming.
And then we also need to decide, whether we want more exposure towards PAX and TUSD by having same parameters and limiting USDC DC to some number so we force people to mint on other stablecoins. I think this would be great but not sure how feasible it is, assuming that current DAI from SAFE will be returned, USDC DC will be released and people will prefer it versus PAX and TUSD.