My thoughts on this are the same as my thoughts on the USDK support - implement an automated growth mechanism that will allow organic growth to a set maximum.
For example, if we start with the 5000 mETH limit and, once we hit 90% (or some other number) over a certain time frame (remains at or above 90% for X-number of days or weeks), then there is an automatic increase by another 500 mETH, to a maximum of 10000 mETH (or whatever number we want to see).
That way we could create the feeling of scarcity while actually allowing controlled growth over time to accommodate additional investments, while also limiting the risks associated with having too large of a debt ceiling.
We could also limit the automated growth of any individual asset (especially a volatile one, like mETH) by requiring a certain threshold be met by other asset types (stable coins).
For example, we could say that the cap for mETH could not be more than double the active pool of mUSDT (or all stable coins combined). That would limit a volatile class from far outstripping stable classes, while also allowing growth of all of the classes.
In a complete example, we have a cap of 5000 mETH with 4998 being locked/active. So long as the total value of all of the stable mTokens is equal to 2500 or greater mETH, we would increase the total cap of mETH by 500 coins (because we are already at greater than 90% utilization). When that increase happens, if we remain at only 4998/5500 utilization we’d remain there until both the mETH active level hit 4950/5500 AND the stable mToken activity level hit the equivalent value of 2750 ETH. When that occurred, there would be an automatic increase of 500 mETH, and so on.
Of course, those numbers above are all arbitrary and have been chosen without the level of research needed to identify the right level of growth to minimize risk while also maximizing growth. For example, the threshold could be 95% and the volatile-to-stable ratio could be 3:1 or 1.5:1.
That way we could set it and forget it for a certain period of time to allow a steady, organic growth of the DMM. And once we hit a certain, predetermined level (10000 mETH or whatever) this automated growth halts as we revisit the issue.
At that point we could modify what we’ve been doing based upon what we’ve learned and to accommodate increased growth rates due to wider adoption of DMM and increased investment. Maybe we them move to a 20000 mETH potential cap with increases of 1000 at a time and a different ratio to stable tokens… or something.
The point is that all of these things should be automated as much as possible to limit the number of times we’re revisiting this - that way we can ensure a growth over a certain period, limit downtime due to these discussions a votes, and modify the system periodically based upon lessons learned.