Episode 162: October 7th, 2021
01:33: Votes and Polls
03:07: MIPs Update
05:49: Forum at a Glance
09:36: Discussion: Case for Clean Money
Agenda and Preamble
- Hello, welcome to the MakerDAO Scientific Governance & Risk Meeting #162 on Thursday, September 23rd at 1700 UTC. My name is Payton, and I am one of the Governance Facilitators at MakerDAO.
- We like people to get involved and ask questions or comments, so please, do not be shy if you have something to say.
- We have our newly improved agenda, which will open to discussion around certain topics following our general updates.
- Adjusting Auction Parameters and Testing Layer 2 Components - Passed & Executed
- Tomorrow’s executive will include:
- Offboard USDT Collateral Types
- Core Unit Budgets and MKR Vesting
- Offboard USDT Collateral Types - PASSED
- 8 Ratification Polls - PASSED
- 2 Greenlight Polls active (voting ends Mon. Oct. 4th)
Weekly MIPs Update #56
- Formal Submission Window Closed on Wednesday, October 6th.
- Ratification Polls go live on Monday, October 11th is the last eligible proposals are to make it into October’s Governance Cycle.
- Ratification Polls will run for two weeks, until Monday 25th.
Forum at a Glance
Post: Forum at a Glance September 30th - October 7th
The Case for Clean Money
- Rune Christensen: Yeah. I’m happy to come back to the governance calls and talk about this. I haven’t prepared the slides, and I came today to discuss this more pressing legal question that I think is also really important.
- There are so many concepts interconnected, and in reality, what it all represents is sort of all the thinking and all the research I’ve done maybe for the past five years potentially, which was pretty much the last time I was able to be publicly involved in Maker governance, right. During a very long period, primarily from the sort of out of regulatory concerns, I’ve just had to create this kind of separation between my role and the bootstrapping Maker team and then having a role as an MKR holder.
- When the whole thing started, the thing that attracted me so much was the idea that all I needed to do was write a white paper, and then sort of free-market will somehow take care of it, and it will be built or something, right. And, then it was like, Oh, we just need to get this team together, and then it will become a down, and we’ll take care of itself. And then you know, the late I was like oh, we just need to make this foundation and then we just need to build the thing and we’ll then I can that can sort of sit back and relax, and it will take care of itself. And now we’re done with the foundation. And you know, and now I’m basically at this point where Oh yeah, you know, All we need now is like make it a purpose-driven down and put a bunch of things in place and sort of really make this constellation everything set up. So we can have this ice age, but that’s sort of that’s I mean fundamentally that’s always been my upset you know, it’s not even the point of maker right is a real sort of autonomous kind of like you know locked down the system to some extent right I mean that’s the promise of the whole system right. Then I think Additionally there like we were Megan has always been an extremely, you know, value-driven movement right and project. Still, it’s been quite different from most of the rest of crypto and DeFi in that we’ve been at this, you know, both been very idealistic and sometimes even been sort of arrogant in a sense and different in that way. And you know, that’s basically like I think fundamentally, it is who we are, but it also connected with all these other things. And all of these pieces are there really yeah, I think fundamentally, they’re, they’re, like they’re, they’re, they’re interconnected and necessary and really, in my opinion is like the, it’s sort of it’s really our best like, from my perspective, it’s almost the only way forward in a sense right and then in that we need a need we need a plan a kind of holistic plan that can do the same I can do something like you know, they can sort of cover all the things we need to cover and and give us clear direction and how do we get to a point where things are going to kind of calm down and because I mean, no matter what, basically, um, I will eventually leave I mean, that’s my that is my that’s gonna happen one way or another PCB and and but the way I would like to do it is that I can simply sort of, you know, everything can run by itself and I can just sit back as an MKR holder that delegates and locks into some tokenomics in general or whatever, whatever it is, we end up with but but the point is that selama you know, that’s really the the ideal outcome right? Because so and so. So that’s where I’m coming from as an MKR holder, essentially right that I’m basically like really big MKR holders that.
- You know, wants to not be involved, but it’s impossible for me when I have so much exposure to the project. There’s not enough sort of, you know, there’s simply not enough certainty for someone like me with such an extreme exposure to not go into free, and I mean, you could that’s a way to think about it that I’m at the level of exposure MKR where I’m compelled to participate in governance to protect my interests. Okay, so, so that I mean, that’s one of the many perspectives, right. Another one is to talk about, You know, climate change in the collapse of the whole world wage base; I think I want to mostly skip over that, honestly. Like, I think I mean that is but yeah, like, you know, I have I’ve got kids now which is different, you know, so I used to be sort of a collapse Attarian with Bitcoin, and you know, the end of you know, the economic meltdown, all this stuff that was going to be thought was going to happen, you know, a decade ago, but it gets very different once you have had children. And you have this different sort of time. Lines sort of perspective in terms of time and, and yeah, like, it is. It is just it’s like climate change is like it’s what’s called a black elephant. It’s like a combination of Black Swan and the elephant in the room. In that, it’s, yeah, it is actually. And there’s like no good answer to it.
- It is working or contributing towards the future or sort of building something up. If you’re not like, directly. Oh, yeah, great, my internet is failing. Because I got a new iPhone that did come back in, so that’s my, that’s my fancy 5g that’s working way worse than my five-year-old phone. So that’s a no but now what my What I’m saying is that, because of what’s happening is like, if you’re anyone working on anything and sort of building something for the future. If they’re not like directly dealing with basically the coming collapse of the system, the face should just not waste time; they should go outside and enjoy nature while it’s still there. And that’s kind of how I, you know, that’s one of the ways I think, to think of this is just like, I mean, it’s, it’s, most people for most people still aren’t apparent today. But it will, over time, increasingly become apparent that this stuff will dominate everything in our lives. And you’re just not going to be like, you know, it’s not going to be meaningful to work on something else. Because it like first it will be about sort of protecting the world and eventually will be about protecting yourself. And yeah, I
- David Utrobin: One thing that struck me is like, really interesting about your post; the case for clean money is this idea of incentivizing an entire solution through, you know, advantageous credit facilities and partnerships, and funneling capital to startups, businesses, etc., etc., that are making a positive impact on the problem. And I’m curious whether your vision has room to expand beyond climate change. So climate change is, of course, one of the biggest problems and, you know, it’s pertinent and worthy of focus. I’m curious what other problems you see maker doubt potentially influencing positively through our protocol? And can we and should?
- Rune Christensen: Yeah, so it’s like, okay, so I want us to talk about that by talking about something completely different first. But that is, says this concept of it’s the question of like, Oh, I mean, I wrote that somewhere in the post, right? This idea of like, Oh, yeah, climate change. So that means now we’re going to be charity, and be sort of Kumbaya and throw our money away or something, right. And that’s kind of the that’s sort of, you know, that’s how it’s traditionally viewed, right? And what I’m saying is that especially the front, especially the exact position makers, and right now, we were actually in a situation where, like, profit, you know, the public benefit, and the personal benefit, as the profits, they’re converging, in a sense, like, we, like this is this direction that I’m advocating for, I believe, is by far the most profitable direction we could take. And what and, and it’s like, when you think about it, it kind of makes sense. I mean, like, as, you know, if you’re sort of, you know, if you’ve been conditioned by capitalism, then the statement that like doing good should also be the most, the most profitable, that mess. That seems like complete nonsense, but like, if you’re going to think about it, logically, that is kind of how markets work, right? Like that’s how sort of and how it would make sense like even doing something as good then that means there’s still value there. And that’s how you should. You know, that’s what should be; we should be able to extract value out of that in some sense, right? And that is, like absolutely the case for the economic system and the financial system, right? That nobody, I mean, it’s not very profitable to destroy the planet, right? Like, nobody’s going to, like the oil executives, kids will be in trouble too, right? Like, no one’s going to get a benefit, right? It’s this, what’s happening is, it’s not like, some conspiracy, or some kind of some people that are somehow like, you know, taking advantage of everyone else, it’s like, literally this huge coordination problem that the whole world is engaged in, that’s just sort of failing and, and turning out badly. And that’s where, if you can, like, the question is, is it possible to try to overcome that coordination problem? And then can you extract sort of, can you kind of like, like, if you can overcome the problem, you will create incredible amounts of value? And is it possible to sort of tap into that future value and then use that as a sort of energy to power them? The push towards trying to overcome this? Right. And, and so so I think that it’s from ultimately it’s from that perspective, that that I mean, in the end, like, that’s how 1000 has to work, that, you know, that like, it, we have to make our decision based on what’s benefiting us as MKR holders, like so. So the question is kind of what’s the, what are the actions that we can take that, that just provides us, you know, that provides us with the biggest benefit, and then as a side effect, but I guess you could say, like some, in some sense, as a side effect, it’s also creating a lot of positive externality for others, right? And, right, so like, my point is that it’s really important, like, we can operate based on whom we feel like, this is good, let’s do that. Or let’s also say the word over here and over there, like, that simply doesn’t work, right? I mean, not even if it’s like, it doesn’t matter if you’re some guy trying to fight climate change, and you’re just like, out, you know, people, you know, people have been trying that for decades, right? And we’ve been sort of chaining themselves to trees or whatever; it doesn’t do anything, right? Because it’s an, it’s a systemic as an economic problem, and you have to fix it with economics and so on. But anyway, this is to answer the question, like climate change isn’t the problem. It’s isn’t of capitalism as a problem, in a sense, and like the way the system works, and so all of its, so there’s both climate change. Still, there’s also deforestation and ecosystem collapse and social, I mean, in particular, so social.
- What do you call that like decorative decline, basically, right? All of these things are actually all connected to sort of economic systems that just that that mass-produced negative externalities and don’t think that are, you know, aren’t able to consider in the long run? And, and, and what I think is sort of the magic to some extent the Maker can bring to the table is that it’s, it’s a global currency, right? And a currency is this, like, extremely, like, he could think of it as like an extremely powerful coordination tool, right? It’s used as a coordination tool when it comes to, like, pricing stuff, right? And like the way prices, they sort of determining how an economy makes decisions, right. But it can also be a coordination tool around like, not only how you price things, but then also how you sort of back the currency itself and how you allocate credit, and how am I like that’s sort of the other piece of of the of money as a coordination tool? That’s not, you know, it’s like it hasn’t ever, like, it’s not been explored much beyond, you know, some conversations around like central banks buying social bonds or something. But money is like the perfect like; it’s the one tool that sort of is systemic, or has the potential to be a systemic tool that can provide, you know, systemic solutions because it’s just so crazy scalable, right? And that’s one part of it that, and that’s where it’s so that’s where, number one, how do we like one of the like, one of the most obvious benefits that that Mayor can get from, from just doing good creating positive, like basically funding positive externalities, right? One of the ways it can capture some of the value of that positive externality is through branding. And I think that’s where it’s at. That’s a really obvious place where, why it makes sense to focus on climate change and like clean money if the brand had the focus be on Climate change, and that’s because climate like there is all these things going wrong at once. Still, climate change is the biggest one, and the one everyone’s talking about, like, that’s the one that’s been talking about the most, right? So so that’s you know, and it’s important like this is only going to work if we’re able to tap into that kind of the so the vibe, the virality essentially off and then the sort of the communication aspect of this right, that we can create clean money that produces positive externalities. And if enough people like, if there’s enough momentum behind that, then you can create you can get some critical mass, right, you can get so much liquidity in the currency that it becomes a world currency, and then the whole set of systems have a snaps in place, and you, you know, you get, you get economies of scale and network effects that mean that you do have some of the surplus available to fund all of these positive externalities. So that’s kind of one place to look like, and that’s the main driver behind sustainable collateral, right. So doing things like renewable energy and, maybe even like really sort of fancy ambitious projects, like trying to fund a fusion power or something, like things were kind of you can, you can like show people look, this is what DeFi can do. It’s a coordination tool. That means if you put your money in DeFi, you’re building giant wind turbines, right. You’re sort of; you’re doing that it’s a, it’s kind of a quick computer program that allows individuals to sort of band together and they don’t have to do anything, they just have to hold their money in a different acid. But then by doing that, they’re creating a real, you know, they’re making a real difference in that they can, and they can see that directly, right, they can track it, they can see, look, this is straight on constructing winter mines, right. And that’s kind of that’s something that’s missing right now. Because what you have today you have this, this frustration, almost like humiliation, right? of people like having to like drink from paper straws, which I think is a perfect example of like, we’re sort of doomed, and you know, like, the avalanche is coming to waters. And we’re engaging in these pointless, self-flagellation acts, right? That doesn’t do anything. And it’s like, you know, what, you know, instead of, sort of just accepting it, and then doing some private stuff as sort of an almost like a punishment.
- You know, we write as we can, we can create a kind of a message of more of a hook, essentially, right? Where it’s like, Look, there’s a real, here’s something real, right? It’s not like a fricking, paper straw that doesn’t do anything. It’s, it’s actually about like, providing a push to the financial system itself. Okay, so that’s one big thing. And my point is there, like when it comes to the branding, and we comes to the message, you know, like being clarity and simplicity is crucial. So that’s why like climate change and clean money and sustainable finance, from the climate and co2 pollution angle, I think it needs to be front and center, right? Because it’s something you can explain to people and it’s possible to understand. People understand why solar panels are beneficial to them, why winter mines are beneficial to them, why coal power plants are not good for them, and so on, right? Then there’s this other, this resilience aspect, which is, yeah, so that’s the complete opposite. That’s instead of trying to prevent damage, preventing negative externalities, and caught in creating positive externalities for others. It’s more about like, sort of capturing or like, yeah, like capturing the value or sort of the alphabet, essentially, that’s been created, in a sense, right, by what’s happening right now in terms of pollution, and the trajectory of civilization. And that’s where it’s just like about like, literally, you know, scientific governance, and you really, and it becomes a matter of look, we just need to, to, you know, act based on the data that we have available, right. And what’s happening today is that climate change is this. It’s this it’s a black elephant. So what that means is the financial system sort of could learn about climate alpha and could learn about what’s going to happen. But it’s it doesn’t do it because it’s kind of like the late stage of the 2007 financial crisis where once you go down that rabbit hole, you have to suddenly reprice so much stuff. That is like; the numbers just don’t check, like the math simply doesn’t check out like you just, there’s, there isn’t an answer on what you do if you start to look like considering the science. And that’s basically, and so that’s bad. But, but the opportunity is that Maker can then sort of fill that gap and potentially access assets that are extremely undervalued in terms of other assets that are, you know, that will potentially become, you know, places that will just become desert, for instance, or not being like the real estate, and, you know, in places that will become deserts are not necessarily being priced accordingly, especially compared to places where you know. These places will be the most resilient to climate change. And that’s just like straight-up something that has to be, you know, that that has to be considered fundamentally. But I think what’s kind of the most interesting in terms of again, like how you can create a sort of systemic solution to systemic problems is that if you go like if you assume the ability to grow, and if you assume that I will very large scale through strong branding and strong marketing and so on. You get to a very large scale, then what ends up happening is you start to have a situation where you capture a lot of your positive externality innocence. So that’s another situation where, if you have a lot of agriculture in, let’s say, you know, like, the northern us or something, which is like an area where it’s not clear, what’s going to, you know, it’s not clear whether that’s going to be, you know, where the, you know, like, depending on what happens when it comes to emissions reduction, then they’re, you know, they’re these sort of areas where you simply don’t, like you don’t know, whether they’re resilient, you know, whether they are going to make it or not, essentially. And, and, and what’s, but what’s interesting is that you can sort of you can, you can then have, if you have a large enough scale, you can sort of making investments into places that are in the, you know, where you’re sort of you’re not, it’s not clear whether they will, you know, you don’t, you don’t know, exactly, sort of their climate alpha essentially, right, you don’t know, whether other, is this land going to bearable or not.
- But you can actually have an impact on that uncertainty if you also invest in a sort of producing, you know, producing positive externalities, and producing sustainable energy, right, just like is synergy between, let’s say, whatever agriculture in an area that is vulnerable to climate change. And then sustainable energy, right, that, that prevents climate change from happening. And that’s, you know, so that’s when you can get, you know you can get to a point where you can, you know, you’re able to somewhat sort of overcoming the tragedy of the commons, because you’re able to, in a sense, sort of capture the value. Yeah, like, you’re able to sort of capture the value created by overcoming the tragedy of the commons. And then because you can capture the value, you can then fund sort of fund the efforts in the first place. Yeah, and I mean, then there’s one like that, well, there are many other things you mentioned. But there’s also like this whole political aspect, and that’s kind of what we’ve been talking about now. And like tax and legal risk and all this stuff, there’s a huge part to it as well, right? But basically, the main thing we are considered a maker is legal risk and UDC Sblacklisting risk. And we know for a fact, I mean, my experience after having dealt with that for four years, right in the context of the fight, is the way politicians and regulators think is literally like, does it look like a bad guy? I’d look like a good guy, right? And if it looks like a bad guy, they’ll much much more likely go after it. It looks like a good guy. They’ll hold off a bit, right? And that’s the thing I like. We’re just, I mean, it’s not like we can break the law or become immune to regulation or something because we’re a bunch of eco-warriors. Right. But it does matter in the big picture of politics. Especially if you create, you know, this is when there’s this whole concept like the super countries, like especially if you combine sort of both political efforts with marketing efforts and sort of adoption efforts, and if you combine all these things, you can really create very powerful sort of security in, in, in countries that are sort of naturally I guess you could say naturally decentralized, basically like, so. So countries that have you know that a democratic strong rule of law these things you can sort of really, you can embed yourself and entrench yourself in that kind of systems. And, and yeah, like, the number one way to do that is to have some way to be relevant and, you know, to sort of creating a kind of a reason why people should care. Right? And, and so it’s not a boils down to it there just you can, you can, like, beat, you know, yeah, right. Like, if DeFi is just about making money and getting rich quick, and so on. It is a, you know, there’s a much greater regulatory risk in that situation than if it’s about, you know, experimenting with cutting-edge technology to figure out how that can help society, right. So yeah, so that’s another big advantage. And, and, and that’s another reason why just, in the end, it’s just it’s like, the profitable way to go. And that’s, and that’s not a bad thing. Like, the fact that going green is profitable is it’s not a bad thing. It’s a fantastic thing, right? Because only if suddenly, the entire planet starts realizing, wow, if we all do this, we make more money, right? That’s the only way it can be solved. So it’s a, it’s really important to create that connection between how do you benefit from providing us with a benefit? But there’s no, there’s no system that can more easily be in that position, and then a currency I think, especially homemakers, it just really sorts of perfect. There’s Okay. I’ll try to. I’ll just ramble a little bit more, and then we’ll, I’ll stop. But you know, so then we’ve, you know, this is the whole question I scale and all the benefits and all this stuff we can do and, you know, climate alpha and
- Sustainable collateral. And, you know, and then there’s a part of the proposal where this whole thing about tokenomics is what I call unleashing the superpowers of DeFi, right. So really, like, we have all these advantages that we can tap into, but most of them are based around scale, essentially, and based around sort of this future value that could be created if we can just overcome this coordination problem. And then, like, that’s where I’ve tokenomics, and sort of the DeFi sort of black magic that has been invented in DeFi summer in this space, it’s just, it’s a perfect fit for this kind of situation because it’s exactly what we need is this kind of ability to sort of creating, create value and create energy out of nothing based on a future promise of based on attention, essentially, right, that’s, that’s exactly, that’s what you need. To help people sort of driving them in the direction of understanding if we all work together, we all make more money than if we all work against each other, essentially. And tokenomics and, and yeah, like, you know, tokenomics yield following these concepts, they’re ways to sort of, like do that in a very direct economic sense, right, through actual cash flows. So that fits particularly well with a real sort of vision and a real genuine purpose. I believe that’s like the strongest place possible where you can put this kind of, like, aggressive tokenomics. I think I mean, IVs are the best example of like, why strong vision and a real genuine purpose and public good and sort of this excitement and, and sort of, yeah, like vision, I get basically around that, right. Like, why that drives value. Like the perfect day, why is Tesla right, like, which is like, the most valuable company was based basic, you know, had this like, like, the thing that drove it. I don’t know if they’re the most valuable anymore, right. But like when they sort of pumped to the most valuable company in the world, it was absolutely because it had this science fiction, you know, like SolarPunk narrative to it, right? And that’s exactly what we can do as well, right? We can use tokenomics, we can use this kind of ratio, and we can use it to just drive this sort of ability to, you know, convincing the world that this is something that can grow and make a difference. It can become huge, And the last tiny thing I want to talk about is sort of the internal is of the last part of the post, right? This is basically how vision, purpose, and ultimately altruism are fundamental for governance and down to even work at all. And so that’s because a doubt doesn’t have regulation or does it doesn’t have authority. So it’s extremely, extremely vulnerable to it’s basically to mean, in the long run, what’s corruption. I mean, in a normal company, the way you deal with corruption, and ultimately is, is through, like shareholder protection, right. And that’s ultimately enforced by the government. And the government ultimately, like it only works because it’s, in some sense, driven by some kind of greater purpose, right? Some kind of altruistic costs, right? Even if the government itself is also corrupt, the thing that’s still preventable, absolutely falling apart, is this sort of shared vision of a nation right. And because a dow doesn’t have a government regulating it, I believe that it needs to have this kind of, sort of, you know, greater good, kind of like shared purpose and shared vision, built into the doubting self for it to function. Because if you don’t have that, if you say, if a dow is entirely about profits, then the problem is then profits and sort of making money is simply not a shared. It’s not a shared vision, right? It’s like an individual thing that everyone makes money. And that’s, that’s great. If everyone comes together and makes money together as a group, while they’re working together, that’s great, that’s going to encourage them to work together. But the problem is, as soon as you present someone with an option to make more money by the sort of defecting, if the only thing is driving them as money, then they’re going to defect. Right? And that perfect example of that is something like voter apathy. Like, why should I pay money to vote or spend time to vote?
- If I’m not getting anything, right, and, like, because I’m getting the money, no matter what, and I’m here for the money, so why bother doing anything to do that? That’s not going to give me more money, right. And instead, if you if it’s if people are, they’re motivated by the money, but they’re also motivated by something beyond that, then you kind of you get, you know, then it’s like, what’s the reason why someone should go in and vote, even though it doesn’t directly benefit them? Well, that’s because of the whole, you know, the way they benefit is because the whole thing, has this greater purpose that aligns with their sort of vision of, of the world, right. Then you can begin to; you can sort of draw out this, this motivation from within people to just, you know, be sort of the, you know, contribute, like, contribute to the greater good in the Dow, because the Dow contributes to sort of the greater good in the world. So, you know, you’re, nobody wants to be the sucker that, like, volunteers that time to help make a bunch of other people rich, right? Like, that’s, that’s very demotivating. So if it said that there needs to be something beyond that, and I think that’s, that’s completely critical and, and then there’s the whole piece of like, the, the core units and sort of the bureaucracy that exists around governance, which is completely unique, and unlike anything else, anywhere in crypto, and it, it needs a kind of, you know, like it’s, it’s guaranteed that if it if it doesn’t have some kind of very strong kind of, I call like an immune response, kind of like something that really sort of tries to almost like, I guess, keep it clean, essentially, then it’s guaranteed then we have some kind of like a big bulky bureaucracy and in a doubt, overtime, that’s gonna absolutely corrupt and, but the problem is, again, like, if you have a bunch of people that are working for the Dow, and they’re working class off, and they’re, you know, they’re like, in all this chaos and complexity and uncertainty, and then you come and impose a bunch of bureaucratic requirements on them and, and sort of treat them as you know, you don’t even like, you don’t even trust them, right, but and you’re, you’re putting a bunch of bureaucracy on them, and you’re sort of creating a system that assumes they’re hostile, and would you ultimately have to do in a bankruptcy that has the potential to become corrupt, right, but if all of that is happening, and the entire context for that is just so people can make money, then, you know, then people either I mean, either they’re going to need huge amounts of just crazy high compensation, or they’re going to go corrupt and they’re going to get their money that way, or they’re just going to quit and not bother dealing with it right. And the only way that this is like that, realistically, you can make sense and make people dedicate their time and energy to this right. So if again, there’s some kind of motivation beyond just being about money. All right, well, I don’t know how I was probably a half-hour, I think. I think that’s good enough for now.
- Planet_X: How many details around this proposal have you worked out yet?
- Rune Christensen: I have very specific ideas around how to do a lot of the stuff I’m talking about. But in the end, that’s not really like this, you know, that doesn’t necessarily matter that much. My goal is that the outcome of doing all these things should be that, in particular, I and anyone else can just pull outright and not be relied on. I want to do very much to work collaboratively with the governance community, particularly MKR holders and sort of the people that represent MKR holders. To figure out what is the governance perspective on and how to do different things.
- Planet_X: Can your proposal be considered a complete package, or is it possible to perhaps split it up into several sections and do a little bit at a time?
- Rune Christensen: Yes. So Wouter advocates that we figure out some principles that we agree on to create clarity, mainly for the core units. From my perspective, I didn’t think we needed to agree on this vision at all because it’s just my opinion. Even if the DAO makes clean money and all of it, it will be its own thing; it will be an interpretation or an evolution of what I initially suggested, which I can also contribute to. There is a logical sort of circularity to it where you can’t do. Let’s say something like a Tokenomics overhaul; we could do that with no other context at all. And that’s something where you could sort of treat that as, like, its own thing but the question is, if it’s, you know, it might be, you know, tokenomics is all about narrative and in mind, you know, and this is a nom just sort of thinking about, how these samples of like how things sort of fit together, right, and it may not be a great may not necessarily be a good thing to suddenly pivot on your tokenomics if there isn’t some kind of broader narrative to it, because possibly you sort of, you’re saying, Oh, we have, we had bad tokenomics, and now we’re trying random stuff to see if we can save ourselves. Right?
- Planet_X: Yes. My argument here is that this proposal contains quite a lot of stuff. An overall implementation plan would not hurt. What do we do first? In what order? And, you know, especially regarding regulation, and add the strategy around any tokenomics overhaul? I mean, it’s quite a significant amount of work, each one of these, these items. We’ll get there.
- Rune Christensen: Yes, I don’t think that any of the stuff that really can be done. In the short run, we could agree on principles, like a real attempt, to brand ourselves as clean money. I think the reason why that’s happening, I believe, is because it’s useful to the media, kind of like it’s useful to some elements in the crypto media because what they’re using it for is they’re trying to push back against this mainstream media narrative of Bitcoin is bad for the environment, and so on.
- It’s possible that because the media is already running with it, that we may, you know, we may be able to just say, Oh, yeah, we, you know, we clean money now, we haven’t done anything yet. However, we’re planning to, and then we can just still actually brand ourselves that way. And to do something on that, we will certainly need some kind of vote for something like that, for instance, right. And that could be like a set of simple principles. And then what that just does is okay, now there’s agreement about like, our values and our brand and this kind of thing that will inform things like what core units are doing, but may also even what individual down members are doing.
- And what someone like me is doing, when I’m out there promoting, you know, podcasts or whatever talking about the project. I think in all cases, it’s like a year away before we’ll be like that; what I suggested in the post is the most obvious when we could get is taking a huge amount of USDC exposure and put it into ESG bonds outside of the US in a trust structure, because, like, and that’s sort of very specific to a bunch of different things like including, the big problem is that USGS bonds just aren’t the greatest thing in the world like they’re kind of like ESG is sort of the reincarnation of corporate social responsibility to some extent. But less fraudulent, essentially but it’s still good, it has sort of a sense of trust and, I think being able to move billions into ESG assets would just like there is a mind-blowing powerful thing that I don’t think that that, you know, something similar has happened to DeFi, basically and there will be a huge deal.
- Wouter: I want to explain why it’s important that we reconfirm support and consensus for a few key principles. I think that we’re making a pivot, right. And the perception of what Maker is about is, is changing. And once again, it’s not the first time we started with real-world assets as a focus. When we added USDC, Maker’s perception has changed, and many people still haven’t; they haven’t gotten over it right. And I think one unfortunate thing that happened when we switched to the real-world assets as a focus is that first, in a sense, Maker became more of a project that didn’t belong anywhere, right? We weren’t as popular anymore with the ETH purists. And yeah, we, we couldn’t like nail down the real-world assets narrative strong enough to immediately create enough interest. And I don’t want to downplay the monumental milestones we’ve reached in red. The point is, we fell in between two shared chairs. And people had a hard time wrapping their heads around, like, what is make you’re supposed to be now? Is it just the USBC wrapper? The real acid stuff, like what is it all about? So definitely know that we’re a Dao. One, one, we are going through another change in the perception about what Maker is about.
- The reality is that people will have to choose sides, right? Like, some people will be out; if you think that it’s a complete strategic disastrous mistake to tie makers to fighting climate change, then maybe you want to quit. And, on the other hand, other people will want to join because wire Maker maybe was not meaningful to them before now, it might be meaningful, and we can open the doors to new partnerships, new alliances, and so on.
- To get that right, we have to send a strong signal that this, not leave this hanging up in the air, this is still a proposal, we are still working out the details, we don’t know yet exactly what it will look like, but we send a very strong signal that these are the core principles that we’re going for, in a way it is a pivot. This is what Maker is about now, and this is the direction we’re going. And this is the claim the kind of clarity; it doesn’t mean that we have to agree on the details; it just means that we create clarity around the new direction of the project. And then we should be able to do that fast and decisively. And then you have a clean environment where you can start working out the details, once we’ve all agreed that you know, these, this is the long term direction we’re going in. And I think that it is incredibly important to make sure that we can effectively deliver. Otherwise, there’s going to be a lot of uncertainty, and people will be confused, and there’s going to be a lot of confusion again around what Maker is about. And I think that could be quite bad.
- Nik Kunkel: Two things are going on here. Firstly, does the community holistically share this vision that Wouter has presented? Secondly, what does this vision entail? We need to map out the tangible steps, like an imaginary roadmap, of what DAO can do immediately and what can be done after a year. It will be hard for the community to evaluate one without the other, and the second piece is missing at the moment.
- Wouter: That is where I slightly disagree. It will take too much time for us to agree upon a roadmap of, for example, 20 milestones. As it takes us forever to decide on those 20 milestones, uncertainty will result in the organization not knowing what to do. This will contribute to confusion over Maker’s identity and perception of the core of the project. By laying that foundation and agreeing on several key principles, we recognize that we do not have the specifics yet. However, these are the principles that we want to share and gather around as we work out a roadmap that goes in the direction of those principles. This will create a context to a point where we can productively and constructively work on actual deliverables. Then, we need to start looking into our short-term, medium-term, and long-term goals. Sending the strong signal first would be a good step because it will create a lot of clarity. I posted my list of candidates in the chat. The sentiment seems very positive. We all concur with the clean money principle but let us confirm that with a vote. For the MKR holders that do not agree with it or just waiting to see if it would pass, let us give them a reality check and not just leave them hanging. For those wanting to join because of this new principle, let us allow them to join for it. My suggestion of the five principles with the clean money principle will have us reconfirm with turning Maker into a force against climate change. We can reconfirm that we want to continue with decentralization through diversification. On the one hand, this means doubling down on the real-world assets, collateral strategy, decentralizing it further, onboarding green collateral types, and so on. On the other hand, it would also reconfirm our commitment to crypto collateral and hopefully refresh our alliances in the Ethereum ecosystem. Lastly, this proposal chooses growth over conservatism by, for example, reducing spending to ensure that we remain profitable in the short run and learn MKR. The last one is a very important one that some people may disagree with. But as I said, sending that signal, or at least verifying that we have support to do so, will be a reality check for people. Those who disagree should probably go their own way. Those who do agree are very welcome to join. Within that framework, as a matter to start thinking about, what would the milestones be? How do we organize as the governance framework to them to get these pieces in place? This would just be a good direction to take.
- Rune Christensen: One thing to add is that the perfect way to do this would be to replace the old foundation principles that almost everyone forgot. But in a sense, you can create it; it could be a choice between basically sticking with the old principles or switching to a new set by upgrading them. The original framework even includes the possibility that it will be changed in the future like others.
- David Utrobin: Also, this comes against many conversations in the last six months to a year about MakerDAO’s brand direction being loose and undefined. Who sets it? How do we determine it? This proposal is coming with that as a backdrop, so treating this will also affect our brand. How we refresh or redesign those principles will affect Maker’s optics and how we look like an organization to the world. Keep that in mind as well.
- LongForWisdom: My memory is a little foggy, but I seem to remember that the original foundation principles were each around a page long. Yes, there were five, and were they each about a paragraph long? Is someone volunteering to write these up as a new set of principles, or are we going to go with sentences?
- David Utrobin: The first ones were easy because it was the foundation. It was obvious for the person or entity to propose those. But now that we have a bunch of decentralized core units, I am not sure. I am happy to partner with anybody who feels particularly driven to rewrite and refresh these. I am happy to support my team.
- LongForWisdom: We may do this soon, but that is a choice. It may look bad if we ruin the founder of MakerDao based on this thinking. Do we want to consider the decentralized aspects and the possibility of following our voting to governance process rather than doing something special?
- Wouter: I would not follow a special governance process.
- LongForWisdom: Well, doing it quickly is a problem because its process would normally take a month of RFC time, correct? And then it is on the air ??? for two weeks? So that is six weeks? This does not sound like your definition of soon.
- Wouter: Is there another procedure that we have in place to do this?
- LongForWisdom: There is the weekly process, but the polls are up for about three days. Is that long enough to vote on something that is a massive change of direction? I would argue no, and they would like to show us that.
- Wouter: We can stack it a bit. You can start with a simple forum poll or a signal request, which would set the tone. Then the final confirmation would come later, and I do not think that is an issue. The point is to start as soon as possible to have the question on the table.
- LongForWisdom: So, we are thinking of expressing broad support for this proposal early on and then clarifying exactly what that will look like later. Thanks.
- Rune Christensen: We must follow the plan. If we replace the foundation principles, we must absolutely and completely follow the process. I have noticed numerous posts from people saying they are out, which has yet to be addressed. There needs to be an attempt to quantify who is presently against us, so the opposition is heard. If we decide with the community to move on, it is important to ensure that the silent majority is not neglected. In addition, it cannot just be Rune writing wall texts, and then everyone approves. In the beginning, I did not talk about or consider the principles that we are talking about now. However, there must be some type of processing within the DAO. Instead of just me coming up with the wall texts, these ideas must inspire others to come up with their ideas. Resultingly, if everyone then comes up with logic that seemingly aligns, something powerful is created. This creates the potential to align and sync the community around us. We need to tap into this power.
- LongForWisdom: Yes, give it some thought over the next few days on how to do this quickly and properly.
- Prose11: I appreciate you sharing further and everyone who has contributed to the conversation today. Looking at the time, I am aware we are getting towards the end of the meeting. If you have other thoughts on that subject, now would be a good time to speak up. I imagine this will be as long as they can have an ongoing process as we figure out ways to submit these questions through our governments. For the moment, this is the last chance to say anything about it on this call.
- David Utrobin: While people think of their comments and last thoughts, I would like to plug that our summary team that creates snippets, transcribes summaries, editorial summaries, and public calls are looking for people to join. We are looking for writers; we are looking for people to do quality assurance work. It is part-time, and it is paid. Reach out to Artem or me if anyone you know is interested in getting their foot in the door at MakerDao.
- Nadia Alvarez: I want to add something in favor of Rune’s proposal. I also like the priority change in Maker’s vision. We did amazing things with our first ideas about banking and the unbanked. We have seen amazing outcomes with placing decentralized stablecoins in economically unstable countries like Argentina and Venezuela. Instead of just talking about it, we were the first ones to act in helping these countries. Consequently, we improved the living circumstances of their people. If you go to Argentina, people are saving in the currency DIA. I experienced how different stablecoins, DeFi protocols, and crypto projects were paying more attention to creating solutions to problems. With our new proposed objectives, we can make a difference in the financial aspect and climate change. Moving forward with this objective will be a great first step for others to follow.
- Rune Christensen: I just want to add one thing. We cannot forget financial inclusion. The brand needs to have that clarity. A big problem with the original founding principles was that they talked about both sustainability and financial inclusion. It would be a huge mistake to somehow drop the ball on the winds we have already created and the potential that still exists. The argument could be made that as climate change controls future actions, the world will focus on financial inclusion when it can use finance to protect its people from the outcomes of climate change. That might be one of the best ways to follow that principle. We must not turn our backs on our incredible success in Argentina in addition to its existing potential. The worst perception would be that we tried and failed because that certainly is not the case. Furthermore, when we get things like L2, we can get back in the game. There will be a whole new universe of financial inclusion in dealing with the last mile, even as a DAO and so on. What we can achieve in a systemic push for climate action is a factor everyone needs to consider.
- Prose11: I appreciate the reflections there. Anyone else looking to add to the competition?
- David Utrobin: MakerDao has great potential to do a ton of good in the world.
- Prose11: Awesome. I appreciate everyone for coming and participating. As always, the discussions will continue in the form and RocketChat. Thanks, everyone, for coming. Appreciate the discussion.
Common Abbreviated Terms
CR: Collateralization Ratio
DC: Debt Ceiling
ES: Emergency Shutdown
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
CU: Core Unit
- Artem Gordon produced this summary.
- David Utrobin produced this summary.
- Larry Wu produced this summary.
- Andrea Suarez produced this summary.
- Everyone who spoke and presented on the call, listed in the headers.