2021-07-23 Executive and ongoing participation issues

So a few people have asked me about the executives for this week and last week. I’m going to outline here what we’re going to do and why:

This weeks executive will not include any of the contents from last week.
A couple of people asked me if this was possible. It is possible, but @prose11 and I feel that it’s not the right move, for a number of reasons.

  • It kicks the can down the road, next week we might be in the same situation, and wanting to stack 3 lots of executive into one. This is bad. The more things we stack up, the more likely there is to be something in the stack that someone has a fundamental disagreement to.
  • It’s not fair to Protocol Engineering. In order to facilitate this, they need to make last minute changes to the executive content that increases risk and may prove to be completely unnecessary.
  • It covers up for what is probably a failure in governance due to apathy. This is not any of the core unit’s jobs. If governance is failing, then governance must be exposed to the consequences of that failure with respect to loss of partnerships, or impact on token price.
  • It prevents the expression of what might be (probably isn’t in this case) a legitimate signal from governance that they do not want the contents of any given executive.

We will not publish this weeks executive until Monday (to give the current exec more time to pass)

  • This decision is mostly contrary to the points made above, but we feel there are extenuating factors.
  • Several large MKR Holders have expressed their intention to vote, but have not yet done so.
  • No large MKR Holders have made their intention to withhold their vote on this executive due to contents clear to the community publicly, or GovAlpha privately.
  • The contents of the executive drew wide approval at the polling stage.
  • We were a day late with last weeks executive, due to the last minute fix.

We (GovAlpha) will continue to try to get MKR Holders to communicate some sort of decision related to the executive vote (be it positive or negative.)

  • I guess this is part of our job now, not much to say about this one.

We would like the community to consider having a two week cycle for executives.

  • Not much to say about this one either. PE floated the idea, it might give people more time to vote.
  • Downside is that it means execs might be more complex or harder to produce.
  • We’ve yet to discuss this among the mandated actors, so we’re not sure where we stand on it at this point either.

For stuff that doesn’t end up passing.

  • If any given executive doesn’t pass, we’ll try to stick to a roughly consistent way of handling the contents.
  • We feel that inclusion in at least one future executive may be warranted in the case where there is no significant on-chain opposition to the change at the polling stage. This would default to the next available executive (but not the consecutive one.)
  • If something is very contentious at earlier stages, it may be forced to repeat earlier governance processes before it warrants another inclusion in an executive.
  • Budgets will probably be an exception until we can sort out DSSVest. This is because the impact of them not passing has the potential to be a significant setback for the DAO (potential for Core Units quitting, or just not working for a month.)

One final note on apathy for large MKR Holders. I imagine this doesn’t apply to most of those reading this.

Apathy will eventually lead to negative outcomes that negatively affect the value of the MKR Token. Some of you have millions of dollars of capital at stake here.

Death from a thousand cuts is just as real as death from an undefended governance attack. Both are serious risks that I feel have become more likely in the past few months.


Having an executive every two weeks given the low participation is probably best for the time being.

From a Real-World Assets perspective, it is quite stressful to have an executive not passing per lack of interest. RWAs are hard by themselves, having to deal with governance delays and uncertainties is adding friction which is not good to sustain relationships. Maker is perceived as a pioneer for RWA in #DeFi but this view might be tainted going forward. Humans relationships are based on trust/reputation and we should nurture and earn that trust/reputation.

If we want to succeed in bringing RWA to DeFi and impacting the real-world we need a strong reputation and being trusted as good people to work with. I’m not sure we can succeed working alone.


Do you have ideas on how potential/existing partners bringing RWA to Maker can help push this initiative to get more community engagement? Right now, I can think of 2 things them bringing qualified RWA that MKR holders can get excited about getting press coverage on it and spreading the word on collaboration w Maker

Good question. I would say that MKR engagement is … up to MKR engagement. If you want established players, you need to make get a reputation first. It is not an hazard that all Asset Originators currently are passionate by crypto. We can see the second wave coming, but they need some confort that they will be treated well and not like a DeFi experiment. Therefore, we just have to do a good job today and the future will be bright. It’s quite easy, MKR holders just have to vote (and they can vote no for a given RWA collateral, that’s fine, the worst is to do nothing).

BTW, only 1.5k MKR missing to get the executive passed, every vote count. A DC increase, 4 new RWA onboarded next week and the layout of the Cayman Foundation, that’s PR worthy

Full disclosure: my company is a potential AO and about to submit our MIP6

Make sense:

  1. Personally, I usually use my MKR to generate yield so locking and unlocking MKR in a voting contract every time I want to vote is one of the biggest reasons why I haven’t been participating (please comment if there is a way around this problem).
  2. I think sharing and promoting tweets like this https://twitter.com/SebVentures/status/1417766368875798528?s=20 is a simple enough step the community can take. I dont see a lot of engagement relatively speaking. 2% of total protocol rev is significant given the context. Does your team have a marketing budget to promote stuff like this?
  3. My experience as a potential AO: it was quite difficult for my traditional finance team to wrap their head around Maker and Centrifuge. Docs are quite complicated and full of defi terms (understandably so). I would be curious to see what the RWA team usually send to potential AO for resources. If this is not currently available, I would be happy to put something together that might be useful for non-defi AO.

We currently don’t have a marketing team.

This seems useful. We should definitely provide something about how Maker operates for those looking at it from an AO perspective. I suspect the Centrifuge team would be best placed to do that for their own platform, as it has a lot of moving parts.

Regarding 1., this is an ongoing issue with no simple solution sadly.

On 2. We try to do a bit but we don’t have a budget, nor a strategy, for that.

For 3. the best thing we have on our side is the RWA documentation which is not great.

As we fail to provide good quality of service to our pool of MIP6 applications, it doesn’t make sense to communicate too much and get even more MIP6. I hope that will no longer be true by the end of the year.

Heads up that there is a mistake in this executive. It gives HTC and FF1 the whole debt ceiling (7m and 15m, respectively).

It is clearly stated under its own bullet point in “Outcomes” in both the HTC and FF1 polls that were ratified that they would be each given 5m initial debt ceilings. Given its own bullet point in the respective polls:

" * A second future executive vote will increase the Debt Ceiling to 15 million DAI."
" * A second future executive vote will increase the Debt Ceiling to 7 million DAI."

I wouldn’t anticipate correcting the DC to 5m each will impact either HTC or FF1 from a practical standpoint, as that would be a lot of DROP to place to co-investors in a week even if they can immediately put the whole vault line to work.

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@PaperImperium, you might have missed the reason of the 5M and the condition to be lifted to full DC. It is the addition of an independent director to the SPV which was introduced in this postmortem. Since the polls, each Asset Originator worked diligently to add one (HTC, FortunaFi and ConsolFeight). The executive was planned for June 18th but ended being live only one month later. This is why there is one executive and not two (because the reason to have 2 no longer exists).


Yep, to confirm, this was intentional. There was no longer a reason to split the debt ceiling changes into two different executives. From the exec:


There is a reason. It explicitly states that there will be two executives used to raise tot he full DC.

The “Outcomes” section very specifically states there will be two executives used to provide the full DC. I know it’s frustrating, but are we doing scientific governance and rule of law, or does discretion go so far as to directly contradict what MKR holders voted upon?

For those who think this is semantics, this also has implications on our exposure to the FF1 pool in particular and the Tinlake platform as a whole. Giving us another week to let the dust settle isn’t going to hurt the AOs, but will provide us a little more time to see whether things stabilize. For those who have not been following, the FF1 pool is in a tailspin with 30% of the pool being redeemed or waiting to be redeemed in the last month. As it is, the initial 5m DC will be partially used to buy out DROP investors who are waiting to leave, but the cash reserves of the pool have already been drained. The Tinlake platform as a whole has also seen significant outflows after the ICO established a market price for their liquidity rewards. This is particularly risky timing to be adding an additional 12m in liquidity (extra 2m for HTC and 10m for FF1) to the platform all at once, and to override MKR holders’ votes in order to do so. So this delay has some small benefit from a risk perspective.

Even with the capped DCs, we will still be adding nearly 50% more liquidity to Tinlake than currently exists now. They will not suffer for us to follow our own laws and procedures.

But just in general, we cannot directly contradict what MKR holders voted on. It is not up to any of us to reinterpret “A second future executive vote will increase the Debt Ceiling to 15 million DAI” as “Second really means the first.”

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Regarding #1, if there isn’t a way around this, there should be! When you deposit your MKR into a smart contract, you should receive a token in kind representing your MKR deposit and it seems like you should be able to vote on the basis of those tokens representing your MKR deposit (although it may not be right now).

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