MakerDAO Risk Core Unit Proposes to Change Collateral Parameters for Dai.
MakerDAO Risk Core Unit wants to make urgent changes to collateral parameters for the decentralized autonomous organization’s stablecoin Dai. Primoz, a member of its team, proposed the changes in light of recent events in the crypto ecosystem and surrounding uncertainty regarding the financial stability and asset liquidity of various entities and their possible connections with token-governed protocols.
The unit wants the debt ceiling for MATIC, LINK, YFI, and renBTC vaults to be reduced as such to 50%, 80%, 70%, and 100%, respectively. Its earlier proposal had suggested for the debt ceiling for MANA be lowered from 10 million to 3 million. If the proposal is passed, the number of tokens that can be used as collateral to mint new Dai will be reduced.
It should be noted that some of the tokens are already close to the new debt ceiling. They will be immediately hit or close to it, should the proposal pass. Currently, $14.2 million worth of MATIC is backing Dai. But the proposal would reduce the debt ceiling for MATIC to $10 million, meaning that users would no longer be able to mint new Dai by depositing MATIC.
Primoz sought to calm users through the proposal which may only be temporary. He outlined that when the situation becomes clearer and the environment less risky, the Risk Core Unit will propose further parameter changes to adjust parameters based on the future state. The unit doesn’t necessarily want the current positions to unwind. It just wants to limit further possible exposure.
MakerDAO is the latest victim of FTX’s collapse. The value of its stablecoin Dai has fallen and debt levels have surged too high.