Hi all. I’m really happy to see the DAI-ETH LP getting some traction, especially given that:
- BTC and ETH have been on a tear leading to an expected decrease in demand for being an LP
- No easy one-click leveraging solutions through Zapper / DeFi Saver / InstaDapp (yet )
This proves our thesis that there is substantial demand for LP tokens and I suspect that LP tokens (not just from Uniswap, but SushiSwap, Curve, Balancer, 1inch, etc.) will contribute a significant amount of stability fees going forward. Now that we’ve tested the waters, I think we should try to scale this as quickly as possible.
That being said, there is still significant Oracle risk given the smart contracts have not been formally audited. So here’s what I suggest. We get an audit on the contract ASAP. It would actually be great if we could fund this through the Surplus Buffer as it would showcase an end to end community led effort of how to onboard something into the Maker Protocol in a responsible manner and be a blueprint for future initiatives to follow. Audits will take time though as auditors are frequently scheduled months in advance.
In the meantime, the Oracle Domain Teams confidence in the Oracle contracts has increased given we haven’t seen a hack over the holiday break (knock on wood). Rather than increase our exposure by increasing the debt ceiling for DAI-ETH, I think it would better to onboard USDC-ETH and WBTC-ETH with 3,000,000 DAI debt ceilings (though I will defer to the Risk Domain Team if they have strong opinions on the matter). This positions us much better for the future given that debt ceilings can be raised in an instant but collateral onboarding is a process with significantly more friction. I would strongly recommend we do it this way instead of raising the DAI-ETH debt ceiling, though ultimately it is up to Maker Governance on how to proceed.
DappHub audited the Uniswap V2 code and has significant expertise with respect to the Multi-Collateral Dai contracts. If they’re willing (and Governance agrees of course) I think they would be an ideal auditor.