Signal Thread: Finishing Flops And Current Executive

Unblocking the 20 stuck debt auctions (1MM unbacked debt) is currently a high priority for the health of the Maker protocol. This thread is intended to gather sentiment on three different options for doing so.

Background information can be found in:
This earlier forum thread.
This set of slides.
The recording of the March 24th Governance and Risk Call.

  • 1 executive vote on Friday ONLY to unblock debt auctions
  • 1 executive vote on Friday containing monetary policy updates and unblocking of debt auctions
  • 2 executives–1 on Thursday for unblocking debt auctions, 1 on Friday for monetary policy

0 voters


If we can finish the debt auctions on Thursday then the monetary policy can really focus on the peg. Otherwise people are likely to hesitate to make any aggressive changes to fix the peg until next week.

What changes need to be made monetary policy wise to fix the peg? We’re already at 0.5% on peg and 0% on DSR. Are you referring to USDC SF?

I know people have mixed feelings about lowering the USDC SF, but at least we should focus on those mixed feelings. Or even better, encourage onboarding more stablecoins.

I think we need to clear the $1M flop auctions - then we can revisit monetary policy. While important I don’t think it is as pressing as getting the flop auctions reset.

Something Kurt did not point out is that with this flop auction Executive vote we can set a day/time for these to go off.

I honestly would like to see these fire off around 9am EST on Friday but that means a thursday executive passing pretty quickly. Otherwise I think based on the limited feedback in the CC we should set the time for 9am EST Monday.

Hence I voted for single Friday executive since there is nothing absolutely pressing in monetary policy to my mind on rates except to lower SCD DC from 20-15M.

Does anyone think that we need to bundle in anything else that is non-contentous into this executive. The only thing I want to see simply because I want it done is the SCD DC lowered from 20-15M anything with SF’s can wai a week since SF rates otherwise are basically near/at rock bottom. As to debt limits we are seeing some additional minting in ETH-A.

PEG is high but this could be due to other factors. I know a few people will probably want to lower USDC SF to encourage more printing but honestly I want that facility as an emergency measure. If anything I want the SF to go up slightly to force people to find other better ways to unwind their DAI short positions. The key reason I did was because I considered 20% somewhat high rate. Now if I wanted to mint some to participate in a flip I’d do it in a heart beat even at 20%. I really don’t want to encourage more rate arb people to get into a trap they might not easily be able to get out of. A high USDC SF rate does that. Notice these players are immune to liquidation since there is no OSM and other technical reasons (but could be fixed). I honestly would at least like to see a USDC/DAI OSM price oracle put up.

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Why this, probably not arbitrary, time? Because US markets open? Or you assume keepers are mostly americans?

Only because I heard from one keeper in the CC that wanted this. I think their point was they didn’t want this going off on the weekend. But you are right no clue on time - but day should probably not be a weekend day (saturday/sunday).

Also a deterministic time known in advance, even if not ideal for all participants, at least allows participants to plan ahead and be present at the moment of kickoff for maximum market efficiency.


So it looks like we might have low participation in the FLOPs auctions. 50k lot sizes can be prohibitive for allowing more people to bid. And it’s also demoralizing to get outbid by an aggressive whale that’s bidding to win everything. Which is why a lot of people gave up, no point positioning capital for the auction.

We’ll see how the auctions pan out. We could’ve been close to a 1 keeper scenario. Basically if keepers don’t have 2x the capital of how much DAI we’re raising, you don’t get a competitive auction with the current parameters. (Ex. 2m of DAI being raised. We have a whale, and other keepers with 1m in capital. You end up with 1m of competitive auctions, and the whale gets to win the other half of the auctions that expire at the minimum price)

Options for the future

  1. Redesign flop auctions completely.
  2. Smaller Lot sizes.
  3. TTL and TAU the same.
  4. Limit # of active auctions. More competition. Less capital required for competitive auctions.

This poll has been closed for a little while. In the end the option selected was to have two executives. The FLOP-auction-unblocking executive took place on the 26th March and passed on the 27th of March. FLOP Auctions took place shortly after.

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