In line with a discussion board submit from MakerDAO, the issuer of the U.S. dollar-pegged DAI (DAI) stablecoin, on March 11, the agency requested an “pressing govt proposal to mitigate dangers to the protocol.“ Maker stated it possessed a number of collaterals “uncovered to USDC tail danger” in mild of the extraordinary depegging of the USD Coin (USDC) stablecoin that started on March 10. MakerDAO presently has over $3.1 billion price of USDC in collateral backing DAI.
Firstly, Maker proposes lowering the debt ceiling of UNIV2USDCETH-A, UNIV2DAIUSDC-A, GUNIV3DAIUSDC1-A and GUNIV3DAIUSDC2-A liquidity supplier collaterals to 0 DAI. Subsequent, Maker needs to cut back the every day minting limits of its USDC peg stability module from 950 million DAI to 250 million DAI, and enhance the charge from 0% to 1% to forestall “extreme dumping of USDC.“ One other stablecoin module, GUSD, will even see its every day minting restrict diminished from 50 million DAI to 10 million DAI if the proposal passes.
Maker additionally needs to get rid of publicity to decentralized finance protocols Curve Finance and Aave completely. In line with Maker, Curve “makes use of a set $1 worth for USDC,“ which “presents a danger of unhealthy debt accrual and doubtlessly financial institution runs with cascading market insolvency if the market worth of USDC falls considerably beneath the present collateral issue.“ Whereas Aave doesn’t possess such dangers, Maker however acknowledged that its “total risk-reward of depositing funds into the D3M are usually not favorable beneath present situations.“
Lastly, Maker proposes rising the protocol’s debt ceiling for the Paxos Greenback (USDP) stablecoin issued by the Paxos Belief Firm from 450 million DAI to 1 billion. The agency wrote:
“Paxos has comparatively stronger reserve property versus different accessible centralized stablecoins, consisting primarily of U.S. treasury payments, reverse repurchase agreements collateralized by U.S. treasury bonds. They face comparatively decrease potential for impairment versus different accessible stablecoins”
On March 10, USDC depegged from the U.S. greenback after its issuer, Circle, disclosed it had $3.3 billion price of funds collateralizing the stablecoin caught in now-defunct Silicon Valley Financial institution. On the time of publication, USDC is presently buying and selling at $0.9025. In mild of the information, the DAI stablecoin has additionally degged to $0.9235.
