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The Stability Scope governs the management of the USDS Stablecoin. The USDS Stablecoin must be a permissionless and useful currency available to anyone. Its stability and risk must be managed to generate as much value for Sky and public good as possible.
This Article defines rules pertaining to Sky’s Collateral Portfolio, which consists of several different assets to ensure liquidity.
This Section governs the management of Sky’s Collateral Portfolio.
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The subdocuments herein define the process by which Sky vault users should be notified about collateral offboarding.
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Periodically, collateral and vault types (ilks) are re-evaluated, which sometimes results in an offboarding of that collateral or vault type. There have been several instances where users entered official Sky forums/chats to understand why they had been suddenly liquidated, despite historically comfortable collateralization ratios (https://forum.makerdao.com/t/an-assessment-first-hand-experience-and-recommendations-from-the-aave-offboarding/11836). This is, understandably, a poor user experience. Even with liquidation penalties set to 0%, the forced unwinding of levered positions conceivably can result in user losses, as well as potentially taxable events. This Section defines procedures concerning the dissemination of information about upcoming collateral offboarding on a best-effort basis. The objective is to minimize the number of users who are unaware of the offboarding prior to getting their positions liquidated.
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Specific Goals:1. Codify a series of good-faith communication efforts.2. Provide an easy-to-follow process for Sky contributors to follow without significant burden.3. Minimize the number of users unaware of a collateral offboarding.4. Provide a method to bypass these requirements in the event a collateral is being offboarded due to serious security or solvency concerns.