Executive Vote: Modify Multiple System Parameters

14 August 2020

The Governance Facilitators and the Maker Foundation Smart Contracts Team have placed an Executive Vote into the voting system which will enable the community to approve the following alterations to the protocol.

Reduce the Base Rate

As per the weekly Base Rate poll the Base Rate meta-parameter will be reduced from -4% to -6% if this proposal passes.

Stability Fees are calculated from the Base Rate and Risk Premiums using the formula Stability Fee = max(Base Rate + Risk Premium, 0%)Please note that a negative Base Rate does NOT imply negative Stability Fees.

Adjust the Dust Parameter

As per the non-standard weekly poll, the dust parameter for each vault type will be increased from 20 DAI to 100 DAI if this proposal passes.

The dust parameter is the minimum amount of DAI that a user can borrow from a particular vault.

Community discussion on this change can be found here.

Adjust the BAT Risk Premium

As per the non-standard weekly poll, the BAT Risk Premium will increase from 0% to 4% if this proposal passes.

Stability Fees are calculated from the Base Rate and Risk Premium using the formula Stability Fee = max(Base Rate + Risk Premium, 0%).

Community Discussion on this change can be found here.

Increase the Surplus Auction Buffer

As per the non-standard weekly poll, the Surplus Auction Buffer will increase from 500K DAI to 2M DAI if this proposal passes.

The Surplus Auction Buffer is also known as the 'System Surplus' and refers to the amount of surplus DAI the system will accrue before triggering FLAP auctions to burn MKR.

Community Discussion on this change can be found here.

Summary

Therefore, if this Executive proposal passes the following will occur:

  • The Base Rate meta-parameter will be reduced from -4% to -6%.
  • The USDC-B Stability Fee parameter will be reduced from 46% to 44%.
  • The MANA-A Stability Fee parameter will be reduced from 8% to 6%.
  • The dust parameter for each vault type will be increased from 20 DAI to 100 DAI.
  • The BAT-A Risk Premium will be increased from 0% to 4%.
  • The Surplus Auction Buffer will be increased from 500K DAI to 2M DAI.

Note that the increase to the BAT-A Risk Premium has no effect on the BAT-A stability fee at this time due to the negative base rate.

The Executive Vote (FAQ) will continue until the number of votes surpasses the total in favor of the previous Executive Vote. This is a continuous approval vote.

Review

Community debate on this topic can be found on the MakerDAO governance forum. Please review the linked discussion threads to inform your position before voting.

Additionally, these changes may have been discussed further in recent Governance calls. Video and Audio for these calls is available to review.

Action

Voting for this proposal will place your MKR in support of implementing the changes outlined above.


Resources

If you are new to voting in the Maker Protocol, please see the voter onboarding guide to learn how to use this dashboard and set up your wallet to vote.

Additional information about the Governance process can be found in the Governance Risk Framework: Governing MakerDAO

To participate in future Governance calls, please join us every Thursday at 16:00 UTC.

To add current and upcoming votes to your calendar, please see the MakerDAO Public Events Calendar.

14 August 2020