MakerDAO to remove redundant stablecoin vaults: Will MKR be affected?

ambcrypto.com:

Leading decentralized finance (DeFi) protocol MakerDAO [MKR] has scheduled an 8 March date to offboard its redundant stablecoin vaults. This decision came after it obtained approval from members of the protocol’s governance team to do the same.

The USDC-A, USDP-A, and GUSD-A vault types are being offboarded from the Maker Protocol.

The offboarding process is currently scheduled to take place with the next Executive Vote on March 8th, 2023.

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— Maker (@MakerDAO) March 3, 2023

The Risk Core Unit Team of MakerDAO previously published the offboarding parameters, which stated that the USDC-A, USDP-A, and GUSD-A vault types would be liquidated because they were no longer necessary following the introduction of the Peg Stability Module (PSM) .

Read MakerDAO’s [MKR] Price Prediction 2023-2024

MakerDAO’s PSM is a system implemented to provide a more stable peg to the US dollar for its stablecoin DAI. The PSM works by allowing users to exchange DAI for USDC or other fiat-pegged stablecoins at a fixed exchange rate. This exchange rate is designed to maintain a stable peg to the US dollar and is set slightly above $1 to ensure that the price of DAI remains stable.

According to MakerDAO, the offboarding will involve a maximum debt ceiling of zero, a liquidation penalty of zero percent, a flat kick incentive of zero, and a liquidation ratio of 1500% on all three vault types. These parameter changes will effectively remove the vault types from the protocol and liquidate any remaining debt that is held within them. 

MakerDAO added:

“It is likely that the corresponding collateral will be liquidated into PSM,