Here are some notes I took during the meeting. It doesn’t fully capture the back and forth in the conversation, so I encourage you to listen to the recording as well.
Zero DLLR Risk Meeting
The purpose of this meeting is to examine Zero and DLLR and suggest any system or economic adjustments that need to be made. For example, if we see that implied DLLR price is trending below $1, we may recommend an increase to the origination fee. The Bitocracy will then vote on if to implement these recommendations.
Peg is a higher priority than minimizing redemption. The peg is essential to the integrity of the product.
How to check the price of DLLR
Go to the Swap page on the Sovryn Alpha dapp and click the down arrow on the left asset, it will drop down a selection that shows last traded price on all the assets, like this.
This is one way to check the price of DLLR.
The leadership proposal being considered is to raise the origination fee temporarily to 5% to reduce borrowing and therefore supply growth until more use cases are brought online over the next two weeks. It is possible to adjust the origination fee floor separately from the redemption fee floor. The ceilings can be adjusted separately as well. This proposal is only to change the origination fee.
Concern was voiced about the level of the redemption fee. A proposal was made that we reduce the redemption fee to 1%, which could potentially protect borrowers from over-aggressive redemption but also enforce a tighter peg so that the stablecoin is a better product and more attractive for hodling.
Another suggestion was made to educate users about the costs of off-ramping in the current situation, which would allow users to assess for themselves whether this is an attractive strategy and potentially reduce sell pressure on DLLR from people trying to off-ramp through RBTC. It would give people the freedom to decide for themselves what use case to pursue under the current conditions of the ecosystem.
Concern was expressed that redemptions are a terrible (and usually unexpected) experience and that these need to be avoided if possible. A suggestion was made that there might be a way to pay more to be less vulnerable to redemptions. At present, redemptions are essential to the peg function. Efforts have been made to bring this risk to the attention of users with well-placed information in the wiki. Suggestions have been made to add a notification for people who are in the danger zone for redemptions and to notify users on the dapp when taking out a loan.
A temporary 5% origination fee might cause users simply to wait until the temporary period is over. But this may be exactly what we want for this period—until we can bring on a DLLR lending pool and stability pool rewards.strong text