Generally, decisions like this are expected to be confirmed by governing authorities in the company. Before going through an executive vote.
Yes to USDC
In line with preparation, an executive vote was carried out on March 17, 2020. The result of the vote confirmed that USDC is now a collateral asset on Maker. USDC is a popular stablecoin backed by US dollars. And is the third crypto to join the Maker protocol. Prior to this time, ETH and BAT were already approved collateral type crypto on Maker. USDC will now be used to generate Dai.
In the Maker forum the day before the approval, the entire community discussed the merits and demerits of adding USDC. Demerits like the fact that it would no longer be supported 100% by a centralized entity. And is more susceptible to regulatory issues for the US government. Adding support for USDC, on the other hand, will restore liquidity and propel Dai back to its $1 peg.
Another main point of discussion was the effect a centralized stablecoin may have on their platform, its users and the entire DeFi space.
The community also discussed the unusual timing of the vote, they, however, concluded that by adding USDC they would be able to fix Dai price stability issues. Most of which stems from the current bearish state of the market.
Even more importantly, adding USDC will encourage Dai holders to keep taking part in FLIP and FLOP auctions.
Risk parameters
The Risk parameters as decided by the committee include:
Annual stability fee: 20%
Collateralization ratio: 125%
Debt ceiling: 20 million
Liquidation penalty: 13%
Collateral auction lot size:: 50,000 USDC
Auction minimum price change: 3%
Collateral auction bid challenge window: 6 hours
Auction maximum duration: 3 days
Dust: 20 (Dai)
It is, however, important to note that liquidations for USDC are restricted for now. While Oracle is currently priced at $1.
Kraken recently also added support for the stablecoin.
