[Agenda/Discussion] Scientific Governance and Risk #163 - Thursday, October 14 17:00 UTC


The zoom waiting room will be on, and a password is set to: 748478, please ping us in the #governance-and-risk chat if you aren’t let in from the waiting room. This Agenda will be updated over the following week leading up to the call as people make me aware they want segments.


Continuing with our adjusted format this week in an attempt to curate a more engaging and deliberative meeting.


Governance Round-Up

Selected Updates / Discussions

This week’s discussions will center around topics brought forward in a couple recent signal requests.

Other Discussions and General Q&A

  • (Time permitting, after general Q&A) - Nothing specific planned.

An anonymous Question Box is now available! Leave your question here and we’ll do our best to address it. Comments on the new meeting structure are welcomed and encouraged!


G&R #163 Snippet

This snippet includes Governance, MIPs, forum updates, and Core Unit team discussions from the MakerDAO Governance and Risk Call #163.

General Updates



  • October 8th: Offboarding Vaults, MKR Vesting, and Core Unit Budget Distribution - Passed & Executed
  • There will NOT be an executive proposal up for vote tomorrow.
  • Only one polled item ready for action
  • Much of the Exec team traveling to Lisbon


  • 4 Weekly Polls Passed
    • Add stETH (Lido Staked ETH) as a new Vault Type
    • Nexo Institutional Vault Onboarding
    • Add the Aave Direct Deposit DAI Module (D3M)
    • Increase the GUNIV3DAIUSDC1-A Debt Ceiling
  • 1 Weekly Poll was Rejected
    • PaperImperium Supplemental Compensation
  • 6 Ratification Polls ongoing (end October 25)
  • 1 Greenlight Polls active (voting ends Mon. Oct. 18th)


Weekly MIPs Update #57

  • The Ratification Polls for October’s Governance Cycle will be running until Monday, October 25th.

Forum at a Glance

Forum at a Glance: October 7th - October 14th

Team-led Discussions

Dai Par - PSM Parameters

RWF, PECU and Risk

Signal Request: Set PSM Fees to 0

  • SebVentures: The idea is to put at a peg where 1 DAI is always equal to 1 USD.
    • Most people still want to use USD as their unit of currency, which we should accept and allow to create this fixed peg.
    • We are currently making users pay for the benefit of using DAI, which is not nice.
  • This should be fine and is not a technical issue from the PECU side.
  • A conversation in this should be market participants moving to and treating DAI as Par.
    • While this is helpful for Maker, it introduces risk to other protocols.
  • PECU has spent a lot of time trying to reduce USDC exposure. This signal completely shifts that direction.
  • There are many open-ended implications from setting the in/out to 0%.
    • The band is very tight; maybe we can set it a little higher.
    • Is it worth fixing such a potentially detrimental issue when we can try to utilize it as a benefit instead?
  • In terms of the Clean Money initiative, we can convert the USDC into ESG bonds that are liquid enough to invest in Clean Money projects.
  • Avoiding this or showing the public that we are not trying to show this is bad for MakerDAO PR.
    • USDC may undergo regulatory risk, which can create collateral damage to Maker.
  • We can externalize the risks here by using LP pools. However, there may be a small fee involved when converting to USD.

Governance Security and Flexibility: ESM + Delay parameters

Rune, Protocol Engineering, and Risk

Restarted poll [Signal Request] Raise the ESM threshold to 15% and increase the Governance Delay to 4 days


  • Emergency Shutdown Module is a game theory mechanism that exists as a minority threat protection.
    • Used if a majority of MKR holders vote for something without popular consensus.
    • Used during a malicious governance attack.
  • 150,000 MKR seems like a large number considering how much MKR is being used now in governance.
  • We do have an unknowable threshold considering empty or lost MKR.
    • If we set the ESM threshold too high, we lose the ability to trigger ES quickly enough.
  • LongForWisdom believes that 150,000 MKR may be a bit too high.
  • There is potential for a profitable financial incentive to put MKR into ES if shorting MKR.
    • Or DAI can be bought at a discount below Par.
  • A very, very significant amount of capital would be required to complete and ES successfully.
    • Requires buying, borrowing, and accumulation of ETH.
  • Governance decisions should use MKR required to be in a wallet over a certain period of time.


  • Governance Security Module delay gives more time to governance for solutions before pressing the ‘Nuke’ button of the ES.
  • Response time to critical issues is usually within 24 hours.
    • a 2-day GSM is good enough already, if not too long.
    • A 4-day GSM should still allow for a weekly governance cycle.
    • We can propose a 3-day GSM to meet the middle-ground with everyone’s opinions.
  • However, during a significant event like a market crash, 4 days is way too long.
  • We should analyze and report some risks for the GSM comparing various days.

Comment reserved for Call Summary.

The full call is now available on the MakerDAO Youtube channel for review: