I have voted “Against” this proposal. Based on current feedback and edit by the OP, it looks like there is going to be some research that is being published this upcoming week. I’d like to see that research before this goes further.
As a broad concept, I think this is creating a lot of risk for the DAO in the event of a price spiral. I’d like to see the research on 'Loan sizes based on different market conditions (including worst case scenario), as I’d be curious what this looks like with concrete numbers and formulas.
Also, the DAO sets a limit of how much ARB can be used as collateral for a loan, meaning there will be a mathematically defined price point where our loan will be liquidated. I think this creates a target for bad actors.
I don’t know if the benefits outweigh the negatives. The nature of these types of loans is that in a period of downward price pressure on the collateral, your either going to get liquidated or have to keep throwing already ‘bad’ money trying to keep your collateral afloat. I know it’s going to feel ‘safe’ due to the large treasury, but noting in this space is too big to fail… so this is a big decision to make.
A final note specific to the proposal - I’m not sure if I’m missing something here… and I’m not opposed to funding research projects… and I’m not trying to hurt feelings… but I feel a 250,000 ARB ask is a lot to ask for this type of research. These types of loan protocols have existed for years so I feel the book is pretty much out on these things. I don’t think there is much new information to be gained here.