According to a forum post by MakerDAO, the issuer of the U.S. dollar-pegged Dai (DAI) stablecoin, the firm requested “urgent implementation of proposals to mitigate risks to the protocol” on March 11. Given the unusual depeg of the U.S. Dollar Coin (USDC) stablecoin that began on March 10, MakerDAO currently has over $3.1 billion worth of USDC collateral backing DAI.
First, Maker is proposing to reduce the debt ceiling on UNIV2USDCETH-A, UNIV2DAIUSDC-A, GUNIV3DAIUSDC1-A, and GUNIV3DAIUSDC2-A liquidity provider collateral to 0 DAI. Next, Maker hopes to reduce the daily minting limit of its USDC-pegged stable module from 950 million DAI to 250 million DAI, and increase the fee from 0% to 1% to prevent "overselling USDC." Another stable currency module GUSD, if the proposal is passed, its daily minting limit will also be reduced from 50 million DAI to 10 million DAI.
Maker also wants to completely de-risk decentralized finance protocols Curve Finance and Aave. According to Maker, Curve "uses a fixed $1 price for USDC" and "if the market price of USDC is significantly lower than the current collateral factor, this creates the potential risk of bad debt accumulation and bank runs and cascading market capitalization." Insolvency.” While Aave did not face such risks, Maker stated that its “overall risk-reward for depositing funds in D3M is not favorable under current conditions.” Finally, Maker is proposing to increase the protocol’s debt limit on the Paxos Dollar (USDP) stablecoin issued by the Paxos Trust Company from 450 million DAI to 1 billion. The company wrote: “Compared to other available centralized stablecoins, Paxos has relatively stronger reserve assets mainly including U.S. Treasury bills, reverse repurchase agreements backed by U.S. Treasuries. Compared with other available stablecoins, they face reduced Relatively low value potential”
USDC was depegged from the U.S. dollar on March 10 after its issuer, Circle, disclosed that it had funds worth $3.3 billion collateralizing the now-defunct Silicon Valley Bank’s stablecoin. At the time of publication, USDC is currently trading at $0.9025. The DAI stablecoin also fell to $0.9235 in light of the news.
