[Signal Request] Should we increase USDC-A debt ceiling?

Vault type USDC-A debt ceiling has only 4m DAI buffer left due to some increased minting from arbitrageurs in the last few days (about 20m increase since Monday). DAI is also trending higher and currently stands at $1.03. Fortunately we have USDT and PAX Vault available and ideally we would like to see some diversification from USDC into other stablecoins. However those two Vault types are not efficient in terms of capital use (higher liquidation ratio for both) and we are still testing how appealing they are for arbitrageurs as they just got launched. There is also an additional buffer available in USDC-B Vault, but this type of vault is primarily better suited for auctions due to high SF.

Also, if we are afraid DAI/USDC arbitrageurs won’t be available to mint any more DAI from USDC and peg might be affected negatively, there is still a lot of DAI liquidity on Compound and arbitrageurs could still borrow there. But obviously we want arbitrageurs to use Maker and we know Maker is more popular because it has liquidations turned off and USDC price is fixed.

So by being more conservative I think we should be increasing USDC-A debt ceiling very soon, the question is by how much. If the outcome of this vote is to increase it, the vote will go straight into executive this Friday.

  • Increase USDC-A Debt Ceiling by 20m DAI
  • Increase USDC-A Debt Ceiling by 40m DAI
  • Increase USDC-A Debt Ceiling by 60m DAI
  • Keep USDC-A Debt ceiling at 40m DAI
  • Abstain

0 voters

This poll closes in 24 hours.

6 Likes

It feels like the Community is living for the “Moment” as oppose to planning/executing future outcomes. How much longer can we continue to live by the day, as oppose to being 5 steps ahead of the game? As an example, the USDC-A DC was lowered from $140M to $40M a few weeks ago–why? I have no idea/I voted against it.

Maybe I’m wrong but we seem to be living for the “moment”, as oppose to staying ahead of the curve…

11 Likes

exactly… we have just lowered the ceiling (I think I also voted against lowering it)

the DC of USDC should be a constant percentage of total DAI ceiling

4 Likes

I fully agree on your points @ElProgreso and @mmoossttaaffaa we are spending too much time on low level stuff. The DC was lowered in order to avoid it filled in case of a USDC failure, kind of reducing the attack surface. Sound management.

MIP17 is in the work to automate that so we will have only to define the highest DC we agree on and the system will lower and increase the actual DC as needed.

1 Like

Please speed up MP17. Frequent voting to increase DC will affect work efficiency.

Why are you so afraid to increase USDC DC? We should build a separate module for all stablecoins and set new system parameters.

Stable assets and existing volatile assets should belong to two different modules, so as to facilitate the setting of two different system parameters and optimize management.

Pretty much agree. I think the argument for reducing the ceiling was just that we want it as tight as possible in case USDC-A implodes. But really, it seems a really small chance that it’ll happen and we’ll have no prior warning.

Regarding MIP17, I’d actually rather we just went straight to instant access modules at this point. I’d really encourage everyone here to go read and leave comments on the thread.

1 Like

Poll closed, winning vote was to increase USDC-A debt ceiling by 60m DAI. Vote will go straight into executive vote today.

5 Likes

I would argue that even 60m is too small of an amount. We need more room in these vaults for large players to adequately manage risk.

2 Likes

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