eljay lovejoy 🧡

📢 $pDAI Update – Flop Auction Expectations 📢 Joy depletion continues to severely trend down, and at zero, flop auctions will begin (we are days if not hours away). Here’s what’s coming, what to look out for, and why it matters 👇 👉 Flop Auctions 101 • Protocol mints new pMKR • Auctions it off for pDAI • That pDAI is burned, reducing circulating supply and eliminating bad debt • Around 1.5B pDAI could be burned in this round • At the moment no interface to allow community participation. But here's the kicker: whoever accumulates this pMKR — likely our “exploiter” — will gain governance control. 👉 What to Expect During Auctions • pMKR supply will rise as new governance tokens are minted • pDAI supply will shrink as bad debt is burned • This should cause visible deflation and could jolt market sentiment As a result, expect a price reaction, especially from sidelined holders or skeptics rethinking their thesis. 👉 Two Paths After Auctions 1️⃣ If the actor is malicious: They could raise the debt ceiling (a governance action), mint unlimited pDAI (especially with broken oracles), and exit fast. This is the “rug” scenario — high risk, low reward. I assign this outcome a very low probability based on behavior to date. 2️⃣ If the actor is benevolent/strategic: They’ll likely: • Fix oracles 🛠️ • Correct collateral valuation • Trigger more flop auctions = more pDAI burned • Progress the protocol toward a sustainable $1 peg Once oracles are fixed, minting without collateral becomes impossible — so the actor must pick a direction. Either burn it down or build it up. 👉 Moving Toward the $1 Peg When pDAI supply drops to around $5B, expect introduction of collateral backing to stabilize the peg. Possible sources: • Direct injection from our white hat • Minted pMKR deployed via pAAVE • Strategic partnerships or market actors stepping in This will likely coincide with or follow successful governance upgrades and oracle repairs. 👉 Expect Volatility and FUD To burn 20B+ pDAI, many bags will need to capitulate. That means we’ll see: • Significant price swings (I don't believe we'll see an insta peg) • Panic posts • Narratives around “governance is compromised” or “infinite minting is inevitable” Expect targeted FUD campaigns designed to shake weak hands. Know what to watch for, and stay focused on on-chain data. ⚠️ 👉 Community Tools & Decentralization To stabilize long-term, the system needs: • UIs for auctions, pMKR, pAAVE, and other Defi protocols • Community participation in protocol governance • Eventual distribution of pMKR to decentralize control I expect our white hat to eventually sell pMKR into the market to ensure broad distribution and governance resilience. 👉 Converging Catalysts Are Signalling Several tailwinds are lining up: • Joy depletion expected within days • Flop auctions to begin shortly after • SEC case dismissal potentially happening April 21 • $6.8M in ETH just moved from OA wallet through Tornado — possibly auction ammo? 👀 👉 Risk Warning This is just my read of the situation. Please do your own research. Not financial advice. NB NB! But buckle up — the next few days/weeks will be telling.