MIP#: 62
Title: Collateral Offboarding Process
Author(s): GFX Labs (@gfxlabs)
Contributors: @PaperImperium, @LongForWisdom, @monkey.irish, @lollike, @DavidUtro
Tags: living
Type: process
Status: Accepted
Date Proposed: 2021-12-06
Date Ratified: 2022-01-24
Dependencies:
Replaces: None
Forum URL: <https://forum.makerdao.com/t/mip62-collateral-offboarding-process>
Ratification Poll URL: <https://vote.makerdao.com/polling/QmdwoZtA>
Extra: This MIP has been amended. See [MIP4c3-SP2](<https://mips.makerdao.com/mips/details/MIP4c3SP2>). The original version can be found [here](<https://github.com/makerdao/mips/blob/9a50bb789a2c6bcba337ec86c097bf2a45d92841/MIP62/MIP62.md>).
This proposal describes how to notify users of Maker vaults of collateral offboarding.
Periodically, collateral and vault types (ilks) are re-evaluated, which sometimes results in an offboarding of that collateral or vault type. This has created a poor user experience when vault owners are unaware of a collateral offboarding, and this MIP is designed to reduce the likelihood of a user being surprised by a liquidation due to offboarding.
MIP62c1: Technical Offboarding Process MIP62c1 specifies actions to be taken by specific actors within MakerDAO when offboarding a vault type.
MIP62c2: Communication Channels and Media Assets MIP62c2 specifies which communication channels and media assets should be utilized to announce offboarding prior to initiating parameter changes designed to liquidate users, without penalty, during the offboarding process.
MIP62c3: Modification of MIP62c2 Communication Channels MIP62c3 describes the process for adding, removing, and modifying communication channels for the process outlined in this MIP.
MIP62c4: Expedited Offboarding MIP62c4 offers an expedited process in the event a collateral type needs to be removed quickly due to security or solvency concerns.
MIP62c5: Communication Coordinator MIP62c5 defines a Communication Coordinator role that has responsibilities under MIP62c2 and MIP62c3.
There have been several instances recently where users entered official MakerDAO forums/chats to understand why they had been suddenly liquidated, despite historically comfortable collateralization ratios. 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 MIP is designed to assist MakerDAO actors in disseminating information about upcoming collateral offboarding on a best-effort basis, and minimize the number of users who are unaware of the offboarding prior to getting their positions liquidated.