Summary
This proposal seeks a strategic adjustment in the FiRM DAI DSR (Dai Savings Rate) market, specifically targeting a reduction in the daily borrow limit from its current level to 500,000 DOLA. All other DAI DSR market parameters will remain the same. This preemptive risk mitigation is intended to preserve market stability and more safely manage market exposure.
Background
The FiRM DAI DSR market has experienced significant engagement since its inception. In response to early demand and after an initial trial period, the daily borrow limit was previously increased in Proposal #141. However, the RWG is recommending a more conservative approach to popular FiRM markets with respectively high supply ceilings. .
Rationale
The primary motivation for this proposal is to instill robust risk management practices within FiRM. Furthermore, a key consideration in this proposal is the maintenance of a healthy demand for borrowing DOLA when new liquidity becomes available in the market. An excessively high daily borrow limit can lead to quicker market depletions. By reducing the daily borrow limit, we aim to mitigate potential future risks associated with market volatility and DOLA liquidity constraints.
On-Chain Actions
- Set FiRMDaiMarket Daily Borrow Limit to 500,000 DOLA