---
title: How to Propose New Collateral
order: 3
hideLanguageSelector: true
keywords: "collateral, governance, risk, proposals"
description: "How to propose new collateral for the Maker Protocol."
---

# How to Propose New Collateral

## Governance Approval

By default, all tokens have a debt ceiling of 0. Before a token can be used as collateral it must be accepted through the governance process controlled by MKR token holders.

Introduction of new collateral types is handled in a two-step process.

1. First, there is a Governance Poll where the MKR governors reach consensus – potentially among different competing proposals – about which risk parameters a new collateral type shall have.

2. Following the poll, there is an Executive Vote that contains the actual changes and additions to the system that are needed. This vote is handled as approval voting in a continuous voting process.

Once MKR token holders have indicated support for a set of parameters, the system will continue to see MKR token holder support for those parameters until they actively change their vote.

To introduce new collateral, a new set of parameters must thus gain support from a larger amount of MKR than any other set. This can be achieved both by activating new votes from MKR tokens that have not voted before and by convincing existing voters to change their support.

This document describes – pending MKR holder approval – the information you shall submit to have a risk team create a proposal to the MKR governance community on your behalf.

## Process Overview

Anyone can propose a new set of parameters to the executive voting process. However, to convince MKR token holders to support the new proposal, one must engage the community with detailed technical and financial specifications, audits, and scientifically informed reasoning for the chosen set of risk parameters.

The following describes the recommended high-level process for having a risk team vet a token being proposed as collateral, and put it forward for a MKR holder vote if deemed suitable.

It is assumed, the risk team includes or has access to the following set of roles:

<List>

- INT: A technical integration role that can verify the technical information provided.

- RISK: The risk function.

- LEGAL: A legal role that can verify any legal information submitted.

</List>

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Process Overview

### Voting

#### Governance Vote

Every Executive Vote is preceded by a Governance Vote. So the sequence for the Governance Vote will be:

<List>

- The collateral type will be presented one or a group of risk teams, including the qualitative and quantitative assessment of the collateral type.

- The submitting risk team, or group, will formally submit a proposal to accept the collateral type into the system.

- The proposal will go through the usual period of consideration (two weeks) and if there is no obvious contention it will go through the voting period (two weeks).

- At the end of the voting period, the proposal will pass if it has the majority vote.

</List>

#### Executive Vote

The sequence for the Executive vote will be:

<List>

- The qualitative and quantitative assessment of the collateral type will be updated with any new information and made public again.

- The submitting risk team will then at the quarterly voting date, submit a proposal including the nominal values for the collateral type.

- Since the proposal is in the continuous approval voting system, the proposal will need to attract the majority of votes.

- As soon as the proposal becomes the dominant proposal with the majority of votes it will be initiated.

- The governance security module will kick in and delay the deployment of code to the blockchain for 24 hours. This is the final security construct that allows a final determination of the security of the code.

- The code is then deployed to the blockchain and the state of MakerDAO is changed.

</List>