Operational Support Update
- We have been busy transitioning to SES and incorporating a lot of feedback that’s been given to us. Amy is working in the background on various projects in the foundation.
- Regarding Know Your MIP, we had Stani from Aave and some presenting KYM #8. MIP50 was very interesting. The recording is on YouTube.
- Yesterday, we had MCO2, a carbon credit market application, the MIP6 application that is already on YouTube.
- On the core units side of things, we had Request Network last Friday explaining how to use it and showing their new features. Tomorrow, we will have a workshop to set up OKRs with Andy from SCS.
April Governance Cycle Review
- We managed to avoid the issues we had with MKR voters this month, at least for the MIPs. We had trouble getting things passed in time for the executive on Monday. It worked out in the end, but it’s good to highlight this situation. This is the main reason why we are proposing the change to the Monthly Governance cycle, which David referred to as MIP51. Hopefully, that will help resolve the issue in the future. It includes changes to the way that the monthly event cycle works. We may take time next month to discuss it when it goes into voting.
Governance Core Cycle
- LongForWisdom: This is the moment for everyone to present comments or questions regarding the last monthly cycle. Chris Mooney states that he is in support of the change. It should change the Governance cycle slightly and make things easier around executives. I encourage everyone to read over MIP51 to have an understanding of how things are changing. Also, we saw a lot of new Core Units get ratified. We offer congratulations to those facilitators and those within those Core Units that went through. It’s been fantastic to see more people joining the DAO.
MKR compensation working group
- David Utrobin: I am curious whether there is an update concerning the MKR compensation working group? We have to discuss all these queries coming to fruition.
- LongForWisdom: I haven’t mentioned it up to this point because the group was not yet ready to publicly state anything definitive. We met last Friday, and we’ve been meeting every day since then to discuss various things. We are making progress. We continue leaning towards guidelines and strict restrictions. The hope is to lay out some guidelines, Core Units that are less sure about MKR compensation. Also, guidelines that allow Governance to compare individual core units’ compensation structures against the guidelines that we put initially release. We set a rough target for May 10th to have something substantial and formal released for everyone. In the meantime, we will continue to work on it.
- Payton: We approved protocol engineering testing. They’ve got some contracts working, but will there be further discussion on that structure, or will that be included in an upcoming executive?
- Derek: Are you referring to the mechanism or the quantity?
- Payton: The mechanism has already been approved in terms of minting or how it’s done.
- Derek: Perfect. Brian has written a contract called DssVest. We have a specification written up for it. I imagine us submitting it to the forum within the next few weeks. I want to keep the focus on Liq 2.0 for the time being. Nonetheless, it’s written up and will be posted as soon as we get past this hurdle of Liquidations.
Governance and Risk Meeting Structure Discussion
- LongForWisdom: Does the structure of this meeting meet the audience’s requirements? Could it be more effective, and how well would it scale as we add more Core Units? Some people state that they like it the way it is. Other people would like to see some changes. Does anybody want to chime in?
- Chris Mooney: I tried to change the format of the Protocol Engineering team meeting disclosure. I was doing stand-up with the entire DAO, and we had to surface the important stuff at some point. I like the format of this meeting. I think it’s necessary. It’s going to have to change shape, and it’s funny that it’s “Governance and Risk” because we are a little off that mandate. It’s more like an all-hands.
- LongForWisdom: Yes, that’s fair. I have this bad habit of assuming everything is Governance because it all involves Governance knowing things.
- Kurt: I was going to make that exact point. All decision-making for the DAO falls under Governance.
- Aaron (in the chat): When will Growth have a section in this meeting?
- LongForWisdom: Probably next week. I haven’t yet spoken with anybody from the new Core Units. They are all welcome to do a weekly update. I encourage you to get in touch with me to slot a regular segment. I hope we will begin to see biweekly updates.
- David Utrobin: This call is primarily focused on updates and issue discussion. Eventually, updates will continue to grow. The benefit of having the “issue discussion” as part of this call is that everyone is present; it’s an all-hands event, and you have all of the key people ready to give feedback. If we were to split off the Governance and Risk meeting in the future, my recommendation would be to do a town hall for updates and a town hall for issue discussion. Make sure that people attend both at similar levels of importance. My main concern is with this call becoming way too bloated through the growth of Core Units and issues, etc.
- LongForWisdom: The issue discussion concern is important. As you say, it’s a chance for people to discuss whatever they want with all the involved people. I haven’t explicitly considered splitting up, but we could potentially do something like that. We could publically split up this meeting and follow an agenda of the first 45 minutes for updates, and at the end, we initiate the discussion. Anybody can show up to both calls.
- David Utrobin: Yes, I like that idea a lot.
- LongForWisdom: Five-hour-long calls are a shock. I want to avoid adding time to this meeting. I know a lot of people find this useful. Some people are already frustrated by its length. It’s one and a half hours long on a regular. I wouldn’t want to push far above that. @juan, I know you had some comments on the meeting. Do you have anything to share?
- Juan Guillén: I’m a little more empathetic. I want to make sure that we don’t talk to only each other and that we are more inclusive. I’m thinking about the objective of this call; what the audience wants and why. I asked many questions to several people. I would like to know if the people who see this once a week believe that’s enough for them? What was the objective of the call: more to discuss things, give updates? That’s the road I went down. Unfortunately, I don’t have a solution. I would like to hear any ideas and opinions.
- David Utrobin: Regarding the discussion section, one of our disadvantages is that we don’t plan very deeply for what we will discuss. Generally, it works out. But it is critical to know who the relevant people are to discuss certain issues and make sure they are available and present for when those issues are discussed. If we do split off into more focused “issue discussion calls,” inclusivity is a huge deal by being able to have everybody there and synced. It’s very important to have that.
- LongForWisdom: We often run these calls, and we have fairly full audiences, right? But it tends to be the same people speaking, those that are most familiar. If you are someone in these calls which doesn’t often speak, and there’s anything you want to share with me privately that you think we could do to make it easier, please feel free to speak right now.
- Kurt: It’s important to not get in the habit of making decisions on this call. Any call will not line up well with at least one participant’s time zone, And people may have other reasons they can’t make a call. It’s important to emphasize the more asynchronous forms of communication for finalizing decisions, namely the Forum and RocketChat, for more ephemeral things.
- LongForWisdom: That’s another good point. That’s always been the goal, to avoid actual decision-making in these calls. Generally, we do fairly well with that. We often have people proposing courses of action, but we don’t determine them, not in the regular call. However, there are some emergency examples that we had.
- Kurt: Many contexts come through in this call. Now that we have the great summaries, people can catch up on them and review the discussions. Thereby, they can raise it in a separate forum post. Even though we don’t explicitly make decisions, sometimes the context of this call carries through to what the decision will be. It’s important to make sure that it gets out there and everyone has a chance to respond.
- Payton: Would an anonymous question line help make sure we can get people to answer without necessarily putting them on the spot in front of everyone?
- LongForWisdom: Yes, that’s a good idea, especially for those who watch the call but don’t tend to show up live. We could put something like that together.
- Christopher Mooney: Yes, that’s a really good idea. I’ve seen this done in larger companies, but it also works in our community because people want to maintain their anonymity.
- Matthew Rabinowitz: Another idea would be the mandated actors who go through the normal cycle. In many ways, so much of what is being said on those calls could be pre-recorded and put on YouTube or somewhere else as a reference. People could watch them in advance. Those who don’t watch it could hear the top three salient points of that video. This would allow us to get through an entire section much faster where there are all the references elsewhere.
- Kurt: Any reasons why you suggest video segments as opposed to a text-based format?
- Matthew Robinowitz: Either way. Some people prefer to talk. Others prefer to type.
- LongForWisdom: We considered that before, and the concern I have is that it requires more coordination for anyone that wants to keep up to date. With the current setup, the call is during a fixed time; we show up, and then that’s all good. If it becomes meaningful to participate, I need to read this document, watch these videos, and show up. But maybe that’s something the people and community could perhaps do or would even want to do. Payton has good experience with speeding up meetings, but it may be difficult to enforce it on other people. We can always try.
Legal Team Update
- We worked with Chris through the MIP21 circuit and confirmed that the RWA001A moved 50 Dai back and forth.
- Yesterday, we had a two-hour conference call with WFSF Bank. We went through the entire structure, and they are ready to go. We somewhat of a “chicken in the egg” scenario; the custody account needed to act as a bank account needs to be formed to connect with the broker-dealer. You can’t have that until you the trust is formed. We don’t have the trust formed yet because the community hasn’t greenlighted the transaction. We will perform an interim step; we will use a short form trust agreement that intentionally shortens it. This will be amended and restated by the actual operative document that we’ll be putting in the forum in short order. That will allow us to form the account to connect it to the broker-dealer and short-circuit in a couple of weeks. We went through the trust agreement comments that we put forth. I wouldn’t say they push back. They have some concerns, but they are integrating them.
- This is an exhibit that has not yet been accepted.t this is the general narrative of what we’re trying to advance and into the trust agreement. The entire trust structure includes all the legal documents, credit agreements, and downstream documents. There are hundreds and hundreds of pages that very few people will read. Frankly, the trustee, the LendCo, the trust sponsor are the parties that need to be involved in every line. And they are. The most important idea to grasp is the narrative that we are trying to mimic, what we use with crypto vaults but in a real-world structure. In the context of being a verification agent, the trustee will be responsible for funds that come in and come out before they can issue a loan. Once a loan is repaid, they need to verify the outstanding debt for this given vault and then compare it to the DC. If one is greater than the other, then there’s a certain action they have to take, which cuts off the downstream credit and allows the downstream loans from that to unwind organically. It’s no different if we took the DC on ETH-A, when it’s outstanding at whatever it is, 2 billion, and change it to 1 billion. None of those loans would be foreclosed upon or be liquidated. They would sit there while people would complain that they can’t take out new loans.
- The context is the same with the DAO’s ability to issue a liquidation order to trigger the liquidation event that the trustee will monitor and check on a routine basis to see if the DAO has initiated that. I always want to stress that this is a nuclear event and, as I posted in the forum earlier today, how MakerDAO is protected in this context. The LendCos have certain covenants pursuant to the credit agreement. If they don’t meet those requirements, the trustee will be the party that will liquidate LendCo faster than the DAO ever will.
- We spent some time yesterday working through the verification process. This is an essential point for every trustee that is ever going to be a trustee for what this type of structure will be used. It’s going through the educational process of learning how to read it at a core level. It doesn’t involve cool UI and UX - I like Dai Stats and Maker burn; it’s all neat but, if somebody was nefarious, how much of that could be manipulated? We have to make the game theory for how we get the trustee to read the blockchain. Fancy UX portals are neat, but how do they go down the next layer? I sent out a forum post, and Chris went through it and confirmed the sequences. I have a verification portal that I’ll be using with WSFS Bank. It’s currently in the early alpha stage. the imperative point would be that they need to learn how to affect Etherscan. This is marrying two worlds that never were destined to date. How do you have a trustee that’s spectacular with paperwork and perfected UCC1 senior position loans as well as looks at blockchain and the numbers?
- We do have a step sequence portal that’s largely automated. We would feel on their perspective. It’s like being a pig on roller skates; ‘You want me to do what? I click on this contract, and it says
ilk, what does that mean?’ We can all smile at it, but it’s true. Eventually, they’ll realize it is not a big deal and turn into the routine course of business.
- That is all I have to cover right now. We are in the final stages. I posted the custody agreements. We were patenting the security agreement, which is a UCC1 document. It’s very straightforward. After that, we have the credit agreement, which is 60 pages, followed by the trust agreement. These two last documents contain all the salient points. The community needs to compare them to the term sheet presented. Some minor changes are lightly in favor of the DAO. None of the changes were against it or in favor of me. one major change is the addition of another tenant, which was already outlined in the downstream documents, including Tesla.
Someone: Our RWA Core Unit has attorneys looking at this. Have they given back any input to the community?
- Sébastien Derivaux: Yes. We are in discussion with Arnold & Porter LLP. We are waiting for the final document from Matthew. We will use them first on the assessment of NewSilver. We will also have those lawyers review this structure. It might take some time, and we could first look at the structure ourselves. We have a good lawyer, Christian, in the community. He might help with that. He is used to those structures. We need to find a good strategy between acting fast, being bulletproof, or 100% confident. First, we need to be sure that it’s working. If minor details need to be fixed later, it’s less of a big deal. For instance, I checked some documents, but I thought that Cayman Entity has ownership of the funds, and the funds are transferred in US dollars in them, no longer in the Delaware trust. It’s the initial MIP. I saw that Martin is now director or at least has executive power in the Cayman’s Entity. It seems to be a trustee of the Delaware trust as well. That’s what we need to figure out.
- Frank Cruz: It was going to be Dai that went into Cayman, right?
- Sébastien Derivaux: Dai would go to the OTC broker, but then the broker would send the funds to the Delaware trust instead of the Cayman Entity. Cayman Entity was the owner of a smart contract but unable to do anything. This was why they couldn’t prove that they were the owners of the wallet.
- Matthew Robinowitz: The way this structure is contemplated is that there is a trust sponsor, which is the party that creates or causes the creation of a Delaware statutory trust. In this case, it is a Cayman exempt entity. It becomes in possession of Dai and automates by the smart contract to sends that Dai. There is a gap where it becomes legal in a “term to rest.” Dai is sent, bumped, or pushed to the broker-dealer, which will have irrevocable transfer instructions to immediately exchange that dive for US dollars and send them to the Cayman Entities account at WFSF Bank. That account then has irrevocable transfer instructions pursuant to that escrow agreement to transfer those US dollars to the trust that is now underneath and governed by that trust agreement. It’s exactly the reverse whenever funds are returned.
- Sébastien Derivaux: Yes, the irrevocable transfer on the bank account is something that I don’t know is possible and how irrevocable it is.
- LongForWisdom: These are questions for another meeting. Thank you for the update, and it’s good to see progress made. I will talk to you all soon!
Common Abbreviated Terms
CR: Collateralization Ratio
DC: Debt Ceiling
ES: Emergency Shutdown
GF: Governance Facilitator
SF: Stability Fee
DSR: Dai Savings Rate
MIP: Maker Improvement Proposal
OSM: Oracle Security Module
LR: Liquidation Ratio
RWA: Real-World Asset
RWF: Real-World Finance
SC: Smart Contracts
- Artem Gordon produced this summary.
- David Utrobin produced this summary.
- Gala Guillén produced this summary.
- Sai Teja produced this summary.
- Everyone who spoke and presented on the call, listed in the headers.