Maker DAO files emergency proposal addressing 3.1B USDC exposure

According to a forum station from Maker DAO, issuer of the U.S. dollar-pegged DAI stablecoin, connected Mar. 11, the steadfast requested an "urgent enforcement connection to mitigate risks to the protocol." Maker said that it possessed aggregate collaterals "exposed to USDC process risk" successful airy of the bonzer de-pegging of the USD Coin (USDC) stablecoin that began connected Mar. 10.  Maker DAO presently possesses much than 3.1 cardinal USDC successful collateral backing its DAI stablecoin. 

Firstly, Maker proposes reducing the indebtedness ceiling of UNIV2USDCETH-A, UNIV2DAIUSDC-A, GUNIV3DAIUSDC1-A, and GUNIV3DAIUSDC2-A liquidity supplier collaterals to 0 DAI. Next, Maker wants to trim regular minting limits of its USDC peg stableness module from 950 cardinal DAI to 250 cardinal DAI and summation the interest from 0% to 1% to forestall "excessive dumping of USDC." Another stablecoin module, GUSD, volition besides spot its regular minting bounds reduced from 50 cardinal DAI to 10 cardinal DAI if the connection passes.

Maker besides wants to destruct vulnerability to decentralized concern protocols Curve and Aave successful their entirety. According to Maker, Curve "uses a fixed $1 terms for USDC," which "presents a hazard of atrocious indebtedness accrual and perchance slope runs with cascading marketplace insolvency if the marketplace terms of USDC falls importantly beneath the existent collateral factor." While Aave doesn't person specified risks, Maker nevertheless stated that its "overall risk-reward of depositing funds into the D3M are not favorable nether existent conditions."

Finally, Maker proposes to summation the protocol's indebtedness ceiling to the USDP stablecoin issued by Paxos from 450 cardinal DAI to 1 billion. The steadfast wrote:

"Paxos has comparatively stronger reserve assets versus different disposable centralized stablecoins, consisting chiefly of U.S. treasury bills, reverse repurchase agreements collateralized by U.S. treasury bonds. They look comparatively little imaginable for impairment versus different disposable stablecoins"

On Mar. 10, USDC depegged from the U.S. dollar aft its issuer, Circle, disclosed it had $3.3 cardinal worthy of funds collateralizing the stablecoin stuck connected now-defunct Silicon Valley Bank. At the clip of publication, USDC is presently trading astatine $0.9025. In airy of the news, the DAI stablecoin has besides degged to $0.9235.