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tags: Summaries
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# [Signal Request] Clear Vaults' Bad Debt in the MakerDAO Protocol

The following is GovAlpha’s summary of this Signal Request.
- This is a valid [Signal Request](https://forum.makerdao.com/t/guide-to-the-signaling-process/9400).
- This signal request gauges community sentiment towards clearing 1.3M Dai worth of bad debt from USDC-A and USDP-A vaults that are undercollateralized.
- Three solutions to clear the bad debt are proposed:
- Liquidate the vaults and let the surplus buffer automatically absorb the remaining bad debt.
- Burn Dai from the Surplus Buffer.
- Repay the debt of underwater accounts using the surplus buffer.
- This Signal Request will run until Sunday, October 30.
- If the over 50% of non-abstaining votes in Poll #1 are in favour of clearing bad debt, there are three possibilites for an on-chain poll on Monday, October 31:
- **No on-chain vote:** If no option in Poll #2 has over 50% of non-abstaining votes, there will be no on-chain vote.
- **Binary vote:** If only one option in Poll #2 has over 50% of non-abstaining votes, then there will be a binary on-chain vote between that choice and not clearing bad debt.
- **Approval vote:** If multiple options in Poll #2 have over 50% of non-abstaining votes, then there will be an approval vote on-chain with those options and the option of not clearing bad debt. This will only pass to an executive if one of the debt-clearing options receives over 50% of non-abstaining votes on chain.
- This SR has been assigned `Medium-Impact` based on the methodology listed [here](https://forum.makerdao.com/t/introducing-impact-estimations/14267).

***Disclaimer: These summaries are intended to be a guide and not a source of truth. You remain responsible for any actions you take on the grounds of this information. Please note the date when the summary was last updated to judge accuracy.***

*Updated 2022-10-18*