DAO-Owned liquidations using Collaterized Debt Positions

[cp0x]

Hello,
I have some questions about your model.

@sids2000

Risk Mitigation: By actively managing collateral levels at the DAO scale, we can significantly reduce the systemic risk associated with market volatility.

I don’t understand what kind of risk do we have. DAO just finance by ARB, which it already has in treasury. It’s no matter how much it costs, but we have some proposal about diversification, such as RWA. You are essentially proposing to make your own stablecoin with ARB collateral.

@sids2000

Flexibility and Autonomy: This approach provides the DAO with greater control over its financial operations, enabling more strategic capital management. The DAO gains significant flexibility in timing grants and liquidations. We can issue grants without the immediate need to liquidate assets, allowing us to choose the most opportune moments for market action. This flexibility also means we can proactively take positions, aligning with our spending plans for ecosystem growth and potentially improving financial outcomes

The same as the previous point. DAO spend only ARB rn.

@sids2000

Market Stabilization: A significant advantage of this approach is the ability to have DAO-owned liquidations. This means that Arbitrum DAO can directly control the liquidation process of ARB or other assets used as collateral. By doing so, we can strategically liquidate assets in a way that minimizes market impact and aligns with our broader market strategies. This approach contrasts sharply with relying on third-party liquidators, who may prioritize their interests over those of our DAO

I don’t understand how this gives an advantage to the DAO, since you are proposing to spend 260 million ARB to maintain the course.

To summarize, I want to say that creating your own synthetic stablecoin can provide benefits for DAOs, but this task is a little different from what you wrote.