Research and development company specializing in smart contract development for decentralized finance (DeFi) protocols, Phoenix Labs, has introduced a new proposal aimed at expanding the capacity of weETH within the blockchain protocol MakerDAO‘s governance forum. The proposal is currently open for on-chain voting on the Maker governance portal for a period of 3 days.
It highlights that weETH experienced increased demand since its addition to SparkLend last month. The weETH collateral onboarding has proven highly successful, as 70% of the debt ceiling has been utilized. In response to such a demand, Phoenix Labs suggests raising the available debt capacity generated by weETH collateral.
The company suggests raising the maximum weETH supply capitalization from 50,000 to 200,000 weETH, along with boosting the weETH isolation mode debt ceiling from 50 million to 200 million DAI.
Although this constitutes a substantial 4x increase in maximum limits, the rate of exposure alteration will be managed by maintaining the current 5,000 weETH supply capitalization gap and a TTL of 12 hours. This ensures that the total weETH collateral supplied to SparkLend can increase by a maximum of 10,000 weETH per day.
A new proposal to increase weETH capacity is up for voting in the Maker Governance Portal.
Since mid-June, weETH has seen strong demand, with deposits reaching several million within the first weeks of its integration into SparkLend. Due to this demand, the @phoenixlabsdev team… pic.twitter.com/0SqhIpB6JU
— Maker (@MakerDAO) July 1, 2024
Community Votes To Determine Future Capacity Adjustments For weETH On SparkLend
If it receives positive votes from the community, the adjustments to the capacity of weETH on SparkLend’s mainnet will be included in a forthcoming executive vote scheduled within 30 days of the poll’s approval. Upon approval of the executive vote, these modifications will take effect in SparkLend after the GSM Pause Delay period has expired.
Maker is a lending protocol self-described as “Multi-Collateral Dai (MCD),” aimed at providing stability to the cryptocurrency economy. The protocol utilizes a two-token system comprising MKR and DAI. MKR serves as the governance token, enabling holders to vote on protocol enhancements, risk metrics, and eligible collateral types. In contrast, DAI functions as the protocol’s stablecoin collateralized by assets, maintaining a soft peg to the United States Dollar (USD). Generating DAI through Maker involves securing loans with assets approved by MakerDAO via its governance framework.
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