TUSD and USDC-B Approved by Maker Governance as Collateral Types in the Maker Protocol

4 June 2020

6/5/2020: TUSD vaults are temporarily unavailable due to a TUSD's unannounced contract upgrade, triggering safety measures that no unaudited external code can interact with the Maker Protocol. Will update after code is upgraded and audited.

As a result of an Executive Vote that ended this morning, MKR holders have accepted TUSD (TrueUSD) and USDC-B (the USDC token with different risk parameters) as new collateral assets in the Maker Protocol. Both tokens are US Dollar-backed ERC20 stablecoins and can now be used to open Maker Vaults in order to generate Dai. 

As noted in the USDC-B proposal discussion in the Maker Forum, the purpose of this variant of USDC “is to act as an emergency credit facility during times when keeper liquidity is overwhelmed (such as busy liquidation periods with large amounts of collateral being auctioned). This is in contrast to how USDC-A is currently being utilized (primarily as a tool to arbitrage the Dai price back down to $1.00). Ideally, the USDC-B collateral type should remain unused unless there is a severe and acute liquidity issue in the Dai markets.”

Prior to the vote, the Maker community discussed the merits of adding TUSD and USDC-B, as well as the appropriate risk parameters for the tokens (listed below), in the Maker Governance Forum. In addition, the governance community considered in a public meeting what, if any, impact adding a centralized stablecoin as a collateral type to the protocol might have on users and the Decentralized Finance (DeFi) movement as a whole. 

TUSD Risk Parameters

  • Stability Fee: 0%
  • Debt Ceiling: 2,000,000
  • Liquidation Ratio: 120%
  • Auction Lot Size: 50,000 TUSD
  • Minimum Bid Increment: 3%
  • Bid Duration: 6 hours
  • Max Auction Duration: 3 days
  • Liquidation Penalty: 13%
  • Dust: 20 Dai

USDC-B Risk Parameters:

  • Stability Fee: 50%
  • Debt Ceiling: 10,000,000
  • Liquidation Ratio: 120%
  • Auction Lot Size: 50,000 USDC
  • Minimum Bid Increment: 3%
  • Bid Duration: 6 hours
  • Max Auction Duration: 3 days
  • Liquidation Penalty: 13%
  • Dust: 20 Dai

Note: Liquidations are currently disabled for all stablecoins used as collateral, and the Oracle prices for them are fixed at $1.

The flexibility of the Maker Protocol means that almost any kind of asset that can be tokenized can be added as collateral in the system, as long as it has appropriate risk parameters and is approved by Maker Governance. 

Adding TUSD and USDC-B to the list of collateral types is an exciting step. Users can now connect their wallets to Oasis Borrow and lock either type in a Maker Vault to generate Dai.

4 June 2020