[Urgent Signal Request]: Increase USDC-A Debt Ceiling

With USDC-A creeping up to max debt ceiling and the possibility of a 101% liquidation ratio on Friday, I wanted to see whether the community wanted to increase USDC exposure by increasing the Debt Ceiling further.

Pros - More DAI to fix the peg

Cons - Increases exposure to a centralized asset that already makes up 30% of total DAI supply

Should we increase the USDC-A DC and include it in Friday, September 18th's Executive?

  • Yes, Increase DC to 300 Million
  • Yes, Increase DC to 350 Million
  • Yes, Increase DC to 400 Million
  • Yes, Increase DC to 500 Million
  • No
  • Abstain

0 voters

For poll to be executed, quorum of 40 participants must be reached before 2020-09-17T15:59:00Z.

Edit: Redid poll to add more options.

9 Likes

I support USDC’s DC increase to 350 million. We should also encourage other stablecoins to mint DAI.
Let us leave some DC space for other stablecoins.

1 Like

Voted for no due to increasing risk. And apparently I just see that something called PICKLE has helped to bring the peg down to 1.01-1.02 today?

1 Like

No- The peg is normalizing based on the fact that governance finally acted to lower the LR to 1.03 on USDC and the expectation that the LR will be further reduced to 1.01

2 Likes

I want to continue to be a voice of caution when it comes to large under-utilized debt ceilings. If there is ever, God forbid, a bug in the protocol, the debt ceiling acts as protection against the mass-minting of un-backed Dai. My preference is to keep DCs as highly utilized as possible and create a more dynamic system for altering them up to the conceptually approved levels.

3 Likes

Rather than increasing DC for USDC-A, I’d prefer to increase DCs for PAX and TUSD. Also, we have active applications for GUSD, as well as HUSD and BUSD (Paxos stablecoins) which we can potentially use in the future.

I think Maker has the ability to really be a kingmaker in the fiat stablecoin space. It would be a shame to allow USDC to become even more dominant.

5 Likes

I don’t think the increasing debt ceiling is needed at the moment. Currently, it’s at ~155M DAI debt USDC with 200M DAI ceiling. I think 45M more DAI supply would be good enough to make DAI stable.

Although, a better solution would be to decrease the L.R to 101% or 102% if there’s no risk to it.

I think we’ve focused on USDC far too much recently. We should look at making other collateral types more attractive. Remember, we have the same levers for all types, and some of those are quite far from their DC. We could try lowering LRs a bit on some other vault types, or maybe adjust the LF a little on some (if that’s possible, I don’t know if they’re all on one variable).

1 Like

@Samyak 45M isn’t enough DAI supply. Could see some more minting after 101% CR. Also, another project can easily come around and add another 100M+ of DAI demand.

4 Likes

I think we have to be willing to assume this risk until we get faster processes in place to raise the DC, as people are losing patience with MKR governance. If we don’t raise the ceiling, the dc gets reached, and the peg shoots up, it just continues to undermine confidence in Dai.

3 Likes

In basis of the recent developments with the peg & the debt ceiling. I change my vote to No. I believe that a reduction in the LR together with an increase in the DC of other stable coins would help us diversify our custodian risk while reaching a similar peg objective.

@Jiecut I get it and there might be more demand for it but relying of USDC so much or any centralised collateral doesn’t seem viable. It’s good for the short term stability but for longer term I think ETH should be contributing most of it.

I’m really bullish on solutions like YETH Vault.

With the new liquidity mining in Uniswap starting tomorrow, much more pressure will be on the PEG, ETH-DAI Pool will be receiving UNI rewards, I can imagine demand increasing, plus USDC-ETH pool will receive rewards too, so we should have enough incentive for people to lock their USDC in MakerDAO (lower LR)

400M seems the the best option given these events, paired with 101% LR. Otherwise DAI could hit the ceiling too fast, and price could skyrocket toward the 1.05.

6 Likes

We have only two options to maintain the peg in the short term until RWA become available: USDC/other stablecoins and unbacked dai. People generally seem more comfortable with the former. Its most important that we maintain the peg right now to restore confidence in the project and have people become more comfortable with minting and selling Dai from their CDPs. USDC is paying stability fees at 2% right now - its the biggest contributor to MKR income. The risk that all USDC vaults will be frozen without advance warning is much, much smaller than major ETH flash crash. ETH flash crash has already happened and remains the biggest systemic risk to the project by far.

4 Likes

Poll is now closed! Great participation! I’ll let @LongForWisdom and @Risk make the call on what happens moving forward.

4 Likes

Will be +200 million on USDC-A, bringing the ceiling to 400 million if the executive passes.

11 Likes

The executive passed and the USDC-A Debt Ceiling was raised to 400 million.