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MakerDAO expands USDe exposure
Aave co-founder proposes to remove DAI collateral feature
MakerDAO risk control team responds to criticism
Last week, the lending protocol Spark under MakerDAO distributed 100 million DAI liquidity from Maker to the sUSDe/DAI and USDe/DAI markets on Morpho Blue. (USDe is a stablecoin issued by Ethena)
However, less than a week later, on April 1st, MakerDAO created a new proposal aimed at setting the DDMline cap to 1 billion DAI, while increasing the supply limit and DAI distribution on the Spark DAI Vault. This means that if the proposal is approved, an additional 500 million DAI will be allocated to the sUSDe/DAI and USDe/DAI markets on Morpho Blue, bringing the total allocation to 600 million DAI, with the potential to expand up to 1 billion DAI over time and under changing conditions. However, this move has faced backlash from other DeFi protocols.
MarcZeller, co-founder of the lending protocol Aave, criticized MakerDAO in the community for exposing a large amount of asset risk on a protocol that has not undergone strict real-world testing, relies on fragile oracles, and lacks risk mitigation measures. He deemed this decision reckless and hasty, and issued a proposal to reduce DAI’s LTV to 0%. If the proposal is approved, it means that DAI will no longer be accepted as collateral in the Aave protocol.
In response, a member of MakerDAO’s risk control team, monetsupply.eth, stated that Ethena and the Spark DAI Vault have multiple layers of protection to safeguard DAI users. Therefore, Maker’s backup capital (currently around 61 million DAI) will not be used until Ethena suffers significant losses or encounters a truly catastrophic event. Only then will the reserve MKR tokens be utilized.
As for the reason behind increasing exposure in sUSDe and USDe, monetsupply.eth explained that the current high leverage environment makes overcollateralized exposure to futures basis risk/reward favorable. Higher income allows Maker to expand the reserves in its treasury, increasing flexibility over time and creating additional primary capital buffers. Finally, monetsupply.eth stated, “DAI remains the boring stablecoin you know and love. Maker is committed to prudent risk management and user welfare. Thank you to everyone who raises genuine concerns and provides constructive feedback.”
