IASSET Speedbump, Margin Call to drive Demand and Peg

It would be interesting to entertain the idea that each CDP have a speedbump every so often. Could be a small amount every month, or a % of the debt every 6 months, or perhaps 1 a year.

The requirement would be that the CDP owner would need to burn a % of their debt by the end of the speedbump time period.

This would assure that CDP owners are not abandoning IUSD indefinitely, and would be prudent for them to keep their debt under control. It also drives demand for IUSD so everyone is not just shorting in waves. These monthly burns could be for all CDP’s at once or staggered, depending on when the CDP was opened so everyone is on their own schedule.

This could be a 50 iusd burn, every month for every 500 iusd debt. OR a % of the debt. An example of % of debt would be 10% every 6 months.

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Is this only in times of a significant depeg? Would they be forced to pay their debt or could they simply add more collateral? CDP owners already pay interest, so they have an increased debt every month already to worry about. Adding forced payment intervals seems like it would just add a point of friction for CDP owners (and might have tax implications).

Its to pay off debt so people dont abandon their iusd position. This is thebreason for depeg. So i would imagine it would only be necessary to turn this on if there is a depeg.

Adding collateral doesnt help the peg it just gives people more margin power to mint and potentially sell more iusd.
This would be to help the peg and make sure cdp owners are not minting and selling indefintely with no plans on burning. This is the reason there is a depeg.

If the peg was fine then interest should be low and rmr would be low so no reason for a burn call

This prolonged depeg is due largely to the fact that v1 lacked many of the tools to help stabilize the price and the DAO’s approach until recently was to make smaller incremental changes vs aggressively pursuing the peg. Once the peg returns, I don’t think it will ever significantly depeg again for such a prolonged period. So I don’t think that forcing burning every month/6 months/1 year will be necessary. By the time something like this would be able to be built out and the forced burns would take effect, all iAssets will likely be repegged due to the parameters that we currently have at our disposal and are making adjustments to.

It shouldnt be a big feat. If theres a depeg. Cdps should get a debt call to cover. Either through burn or by taking collateral similar to a redemption.

The way it works now is redemption through rmr ratio and only people who have low rmr have to pay. Not everyone across all cdps who have debt.

This would be a more fair and collective effort for cdp users to help pay down debt in order to obtain a peg.

And this helps to avoid inviting cdp owners who sold iusd and never plan on buying iusd back again which is hard to make up for and is causing the depeg.