Vaults Offboarding Proposal Passed

As of October 11th 2021, as part of the weekly Maker Governance Cycle, MKR holders voted to initiate the offboarding of some vault types. These vaults will be removed from the Maker Protocol either because there is low demand for them, or the low liquidity on the Ethereum markets prevents from increasing the debt ceiling further due to high slippage. In either case, the gas cost for maintaining oracles for these collaterals is greater than inflow from the stability fee.

The vaults involved are BAT-A, LRC-A, ZRX-A, UNIV2AAVEETH-A, and UNIV2LINKETH-A and the parameters will change as detailed below to accommodate the offboarding*.

BAT-A

Lower the BAT-A Liquidation Penalty (chop) to 0%.
Lower the BAT-A Debt Ceiling (line) to 0 DAI.
Increase the BAT-A Liquidation Ratio from 150% to 800% over 60 days using dss-lerp.

LRC-A

Lower the LRC-A Liquidation Penalty (chop) to 0%.
Lower the LRC-A Debt Ceiling (line) to 0 DAI.
Increase the LRC-A Liquidation Ratio from 175% to 2600% over 60 days using dss-lerp.

ZRX-A

Lower the ZRX-A Liquidation Penalty (chop) to 0%.
Lower the ZRX-A Debt Ceiling (line) to 0 DAI.
Increase the ZRX-A Liquidation Ratio from 175% to 900% over 60 days using dss-lerp.

UNIV2AAVEETH-A

Lower the UNIV2AAVEETH-A Liquidation Penalty (chop) to 0%.
Lower the UNIV2AAVEETH-A Debt Ceiling (line) to 0 DAI.
Increase the UNIV2AAVEETH-A Liquidation Ratio from 165% to 400% over 60 days using dss-lerp.

UNIV2LINKETH-A

Lower the UNIV2LINKETH-A Liquidation Penalty (chop) to 0%.
Lower the UNIV2LINKETH-A Debt Ceiling (line) to 0 DAI.
Increase the UNIV2LINKETH-A Liquidation Ratio from 165% to 300% over 60 days using dss-lerp.

What does this mean for you?

This change will only affect you if you have a vault of one of the above mentioned types.

The suggested action is to close the vault by paying back the debt, and withdrawing the collateral. You can do so straight away with Oasis.app. With the recently added Multiply functionality the closing can be done in a single transaction for most of the collaterals* without the need for obtaining DAI on the market, watch how to do it here.

The new parameters were set in a way to minimize the damage done to existing vault owners while ensuring that sufficient amount of debt will either be repaid or less desirable liquidated with minimal costs for the vault owners. Although the penalties are going to 0, there could still be a risk of losing collateral, e.g. if a vault owner lets his vault get liquidated after this change. Sharp market downturns of the collateral, or low liquidity might result in losing more collateral than expected by the user through the liquidation.

You can read more details here.

*NOTE: Although the Vaults will be offboarded, on Oasis.app you will still have the possibility to close them out and to see their history also after October 11th.

**NOTE: You can close BAT-A, ZRX-A and LRC-A in a single transaction (not available for UNIV2 tokens)