#CropRotation: Since the new governance change, the most profitable $COMP farming is now to borrow and re-deposit #Dai. With multiple layers of borrow-redeposit, you can get >40% yield still. The $BAT positions have massively unwound (w/o incident!) and replaced by Dai 
As with $BAT before, this leads to concerns about deleveraging effects. Demand for Dai is high with price close to $1.02 and Dai interest rates are already low. Dai issuance is struggling to keep up with COMP farming demand in this otherwise 'normal' time
This increases concerns about future Dai liquidity. An outside shock now would make a worse deleveraging spiral, as we've previously explored here (and as happened on #BlackThursday)
medium.com/coinmonks/insi…
arxiv.org/abs/2004.01304
arxiv.org/abs/1906.02152
medium.com/coinmonks/insi…
arxiv.org/abs/2004.01304
arxiv.org/abs/1906.02152
For @CompoundFinance users, this translates into $cDai liquidity risk due to high utilization. Particularly worrisome if ETH rapidly depreciates and/or Dai rapidly appreciates (as we would expect to happen if a crisis is triggered)
COMP farmers may find themselves unable to rebalance their leveraged positions due to such a liquidity crunch (as well as likely Ethereum congestion). Important for farmers to consider that risk now!
In a follow-up thread, will discuss some unconventional things we might see from Maker in response to this unique situation. A little taste here...
Continued here:
