MakerDAO to launch offline voting for vault types in March 2023

03/03/2023 14:55 • Daily Digest • 69 views

According to reports, MakerDAO tweeted that it would launch the offline USDC-A, USDP-A and GUSD-A executive voting on March 8, 2023. At that time, the execution voting will deploy the following parameters to the above vault types: the maximum debt ceiling is 0, the liquidation penalty is 0%, the FlatKick award is 0, and the liquidation ratio is 1500%. This parameter will be deployed in the execution vote launched on March 8. After that, all positions of USDC-A, USDP-A and GUSD-A with a mortgage rate lower than 1500% will be cleared. If liquidation is to be avoided, it is necessary to pay off the DAI debt in full and close USDC-A, USDP-A or GUSD-Availts before the end of voting. MakerDAO reminded that USDC-A, USDP-A and GUSD-A are standard vault types with mortgage debt position models, and should not be mistaken for PSM.

The MakerDAO community will launch the offline USDC-A, USDP-A and GUSD-A executive voting on March 8

Interpretation of the news:

MakerDAO, a decentralized finance platform, announced that it would launch an offline voting mechanism for USDC-A, USDP-A, and GUSD-A vault types on March 8, 2023. The voting will implement specific parameters for the aforementioned vault types, such as a maximum debt ceiling of zero, a liquidation penalty of zero percent, a FlatKick award of zero, and a liquidation ratio of 1500%. The MakerDAO community members will be able to vote for or against these parameters during the execution vote that will take place on March 8.

This announcement has significant consequences for users who possess mortgaged debt positions in USDC-A, USDP-A, or GUSD-A vault types. Any positions with mortgage rates below the 1500% liquidation ratio parameter will be cleared, and a full payment of DAI debt will be required to avoid liquidation. Therefore, if a user does not pay off their DAI debt and close their position before the voting ends, they could risk losing their position entirely.

MakerDAO clarified that these vault types for USDC-A, USDP-A, and GUSD-A are standard models for debt positions and should not be mistaken for the PSM. The PSM or the peg stability module is a smart contract that allows MakerDAO to maintain a stable US dollar value for DAI.

In conclusion, MakerDAO’s offline voting mechanism with predetermined parameters to implement for specific vault types could potentially disrupt the positions of users with low mortgage rates in USDC-A, USDP-A or GUSD-A. The announcement of this voting mechanism and the parameters it will introduce has implications for the risk management of users who have mortgaged debt positions.

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