[Agenda/Discussion] Scientific Governance and Risk #169 - Thursday, November 25 17:00 UTC

Disclaimer

This communication is provided for information purposes only. The views and opinions expressed in this meeting are those of people involved, and do not reflect the official policy or position of MakerDAO or any of its contributors, Core Units, or affiliates. This communication makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, financial or tax advice. You should consult your own advisers as to those matters. References to any digital assets and the use of finance-related terminology are for illustrative purposes only , and do not constitute any recommendation for any action or an offer to provide investment, financial or other advisory services.

Call Information

The zoom waiting room will be on, and a password is set to: 748478, please ping us in the Maker Discord’s #governance channel if you aren’t let in from the waiting room.

2021-11-25T17:00:00Z

Slides - updated before the call

Introduction

Governance Round-Up

Selected Discussions

CU Operations
Budgeting, Accounting, & Reporting.
Communication Standards.
Cross-functional Initiative Coordination.

Adding support for the 1bps GUNI pool
Why do we need to add it?
Should we add it?
What are the repercussions for adding it, do we mess with the 5bps pool?
Agility with LP Token collateral.

Other Discussions and General Q&A

General Q&A
Ask us stuff.

Open Discussion
Call attendees to decide. Help us by using the anon question box below :point_down:

Leave your questions in our anonymous question box and we’ll do our best to bring them up during the call.

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G&R #169 Snippet

This snippet includes Governance, MIPs, forum updates, and Core Unit team discussions from the MakerDAO Governance and Risk Call #169.

General Updates

Votes

Executive:

  • Last Week’s executive - PASSED & EXECUTED
    • WBTC-B Onboarding, WBTC Stability Fee Changes, Local Liquidation Limit (ilk.hole) Changes, Change of Covenants for P1-DROP (Peoples Company Series 1), Offboarding Collaterals
  • Executive Proposal up for vote tomorrow. Will include:
    • wBTC-C Onboarding
    • PSM-GUSD-A Onboarding
    • Surplus Buffer Increase-over-time begins.
    • Aave D3M from 50M to 100M.
    • Core Unit Budget distributions

Polls:

MIPs

Weekly MIPs Update #63

  • All of November’s ratifications polls have passed!
  • New Core Units: IS-001, SAS-001, and DECO-001

Forum at a Glance

Forum at a Glance: November 18 - 25

Team-led Discussions

Core Unit Operations

Budgeting, Accounting, and Reporting

  • We need to focus on all Core Units to present their operations efficiently and correctly.
    • Poor or late information hurts RWF production of Core Unit reports.
  • It can be difficult for facilitators to manage their Core Unit finances at an optimal level.
  • There is community support for a CU finances team to help all Core Units.
  • There are spreadsheets that help with forward guidance, account, and more; ask PECU, RWF, and SES.
    • However, getting all the information takes some time.
  • How would you structure large upfront costs into the DSSvest stream?
    • You would need those funds from the beginning or account some of them into the initial budget.
  • Derek is planning to present a review of these spreadsheets.
  • Are we employees or contractors under MakerDAO?
    • How can we correctly set up an Accounting Core Unit?
  • Nadia hired an accountant for GRO-001 finances.
  • It will be very helpful for optimizing and gauging the success of new initiatives if we have access to all Core Units accounting.

Cross-Function Initiative Coordination

  • How well are we aware of all Core Unit initiatives, internal communication, and understand Core Unit schedules?
    • The problem with cross-functional Core Unit initiatives is that they require transparency and public communication.
  • Maker needs to be more straightforward with communication on forums to support collaterals and their failsafe or liquidations.

Adding Support for the 1BPS GUNI Pool

  • Onboard G-UNI for UniV3’s new 0.01% fee tier
  • Most of the volume will go through the 1BPS pool, and it makes sense to support it.
  • Should improve liquidity and leverage same as done with the 5BPS pool.
  • What are methods to be more efficient with handling these types of collaterals?
    • It will be very easy to onboard the 1BPS pool.
    • We can point a D3M at the AAVE GUNI market for better results.
    • But if we have to jump around a lot, we can try to delegate for another protocol to do it for us.
  • We can reduce oracle costs and poke time to better levels that are still low risk.
  • What is PPG’s position on this?
    • PPG is watching the fees, and it needs to be unwinded.

SES Core Unit Focus and Analysis

Wouter

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Semi-transcription Summary

Episode 169: November 25th, 2021

Agenda

Video

Introduction

Agenda and Preamble

LongForWisdom

00:03

  • Welcome to the MakerDAO scientific Governance and Risk meeting #169. My name is LongForWisdom, one of the Governance facilitators at MakerDAO, and during this meeting. Today we can talk about CU Operations and the Gelato Uni, v3 Dai USTC.

General Updates

Votes

01:00

LongForWisdom

Executive:

  • Last Week’s executive - PASSED & EXECUTED
    • WBTC-B Onboarding, WBTC Stability Fee Changes, Local Liquidation Limit (ilk.hole) Changes, Change of Covenants for P1-DROP (Peoples Company Series 1), Offboarding Collaterals
  • Executive Proposal up for vote tomorrow. Will include:
    • wBTC-C Onboarding
    • PSM-GUSD-A Onboarding
    • Surplus Buffer Increase-over-time begins.
    • Aave D3M from 50M to 100M.
    • Core Unit Budget distributions

Polls:

MIPs

Pablo

03:13

Weekly MIPs Update #63

Forum at a Glance

Artem Gordon

06:27

Post: Forum at a Glance: November 18th - 25th

Video: Forum at a Glance

Team-led Discussions

Core Unit Operations

Budgeting, Accounting, and Reporting

11:51

  • I want to highlight Luca’s report as real-world assets and financing grants. Yesterday, retro hosted a call; please check it out if anyone is interested in seeing different possibilities of scaling Maker into real-world finance. Regarding the CoreUnit operations, I have not done the slides. However, there are different things that we wanted to highlight. We have been doing it ourselves, as we often do, in what we call this dog food project, where we try things for ourselves, and then we suggest things that have been working, and we improve on things that have not: budgeting, accounting or reporting.

14:18

  • Sam: Ari from Gelato has introduced - Cassandra, by the way. He has introduced the one bips pool for the genie token Dai USDC. This is in response to swap adding this tear. An ongoing development over the past week is just after we raised the debt ceiling to 500 million for the five-bit spool. You can swap just went and added a one-bit spool sucking all the volume out of the five-bit pool. We were a little uncertain exactly where it would land. We watched it this past week, but it seems pretty clear now. All the volume will go to the one pool, even with 7 million locked in there alone; it is already enough to cover the majority of the trades, it seems. The UniSwap router will probably put most stuff through there; it makes sense to onboard this and supports it. I think, right now is 7 million; it is pretty good. I could see the volume going up significantly if we improve the liquidity with leverage the same way we did the five bips pool, which should boost the fees. We will see where it lands. It makes sense to onboard this. Does anybody have concerns or questions?

15:44

  • David Utrobin: With the launch of the D3M, I know that a lot of the thinking about how we generate Dai from less scalable collaterals. We could do it as a proxy through the D3M by providing Dai liquidity to other platforms, like Aave and Comp. My question for this GUNI is, is there a possible D3M GUNI sort of integration? Or is it limited because it has to be a specific GUNI type position? What are ways for us to be more efficient in handling these collaterals? Because they seem to take a long time to set up, and then suddenly, one change can throw a real wrench in work. I am thinking about this from a scale and tools perspective.
    • Sam: Yes, that makes sense. We are referring to: “we just added this one, and then all of a sudden we are aiming at a moving target here where things change, and we have to waste all this time on the five big spools, and now we have to go to one depth. First, I will say most of the work evaluated the token itself. Now that we have it evaluated like onboarding, the one bips, we can do in a week or two; it will not take long. It is a minimal effort on all the CoreUnits to get this on board. With regards to the D3M, it is an exciting point. I think all Fe is actually in the process of onboarding G and E as well into their AMM market. We could potentially point another D3M at their AMM market and have them sort of more rapidly iterate with these GUNI tokens. That is a possibility. The nice part is that we built the first D3M for Aave, and we get subsequent ones for Aave specifically for free. There is trade out there. The community can decide which way to go if we switch too often. It may make more sense to delegate to another protocol to do that.

18:17

  • David Utrobin: It is good to hear that; it is like a low lift after that initial work set. Even from an Oracle cost perspective, is there an Oracle cost for this particular pool? Because I know it is just USDC Dai?
    • Sam: It is not about the Oracle itself; it mainly concerns the OSM. They have to be poked once an hour, regardless of price change. We are doing one thing now for these precisely (because they are the most expensive); you need to evaluate the OSM price. We also noticed that the price barely changes since it is a stable pair. We plan to lower this to once per 24 hours, and we could probably even go lower. It is just so safe and infrequently changing. There is no point in wasting this amount on gas. We should consider the Oracle costs, but we could probably get this to nearly negligible levels if we need to; it is not a big deal for the oracles.
  • Sebastien: Is it possible to use the DCM technologies and use Uni in the background?
    • This is the Aave AMM market; more stuff needs to happen. Pointing another D3M at the AMM market is what you would do for that.
  • Sebastien: I mean, really taking the DCM, maybe it is not a good name. Instead of using Aave in the background, use Gelato in the background. So we get all the fees because the problem is that the market rates on the GUNI are moving. We get other fees; you just dump 100 million out of a billion there.
    • Sam: I misunderstood; you just directly put the money into the GUNI token? Yes, a possibility. I initially opted to go with this GUNI route, with users depositing because we had minimal work to onboard this. The D3M requires customization for every single protocol we are integrating. This is a lot more engineering time. I was opting to use a standard gem join; it is all like bare-bones Maker stuff to onboard these Genie like a regular token. That was the thinking for that; we have a bigger bang for our buck, if you will, low-hanging fruit here for the PE team. I did not want to occupy many engineering hours with something good, but it is not the highest priority, in my opinion.
  • David: What is the status of the current pool? Where is it going? I know that PPG recently posted their recommendation to lower the actual stability fee from half a percent to 0.1%. Where do you see that going? Are those vault users well taken care of by making Maker governance? What is the whole process for doing this replacement?
    • Sam: We watched the fees in the past 24-48 hours. It is around $133 at this point unless it rebounds for some reason. We may even have to go down to 0% or just shut it down. They should unwind themselves. It is unfortunate in the timing. We had everybody winded up to unwind it. This is the nature of the space.

24:00

  • David Utrobin: First of all, it has been less than a year since the first CoreUnit has been ratified. This is crazy considering that as of today, we have 18 ratified and active CoreUnits. In becoming CoreUnits, the facilitator has the responsibility to facilitate the mandate of each CoreUnit. A big part of the culture and CU expectation is to have a sufficient level of transparency into the financing of the CUs. This includes the spending, the budgeting, the reporting, etc. Facilitators, kind of by nature, have not been set up as accountants themselves.
  • Many CUs that our team, SCS, and Ace are talking to are struggling with the accounting and reporting portion. When this happens, it is a lot harder for the Real World Finance Team, guys like Ace, to report on the financing quickly and accurately. One big piece of the operational puzzle for CUs is getting the budgeting, accounting, and reporting efficient, streamlined, and synced between all of us. When each facilitator needs to be individually trained to do this kind of transparency, accounting, it is hard to scale.
  • There have been conversations in the chats and in various calls about giving an overarching accounting and Real-World Finance CU this authority or mandate to help facilitators with this transparency accounting. That is the current state of things.
  • The first prompt that I put up describes recent CU experiences. I could speak from Gov Com’s perspective. We are a team of three people; we were ratified back in August. It took about two months before we could set up our partnership with accountable. All of our contracts were only signed two months later, all in October. In the middle of that, we may have made a couple of mistakes. Previous actuals may have been revised, even after Ace reported them, perhaps back in October. We had a hard time dealing with that when it was small for teams like ours. We have half a million-dollar budget compared to other bigger teams with way bigger budgets.
  • In our experience, we are trying our best. We are thankful for the templates that the SCS team has set up. We are thankful for guys like Ace who follow up and are proactive in pushing us to get those numbers. That is the highest level of experience share I could give you guys. I support an overarching accounting CU or finance CU that could help CU like ours. I am curious to hear from other facilitators who might be on this call about your experiences and whether, in general, how you think reporting, budgeting, accounting, and reporting function should be? Should it be this transparent? I will open it up.
    • Derek: In terms of my experiences from the get-go, I used the spreadsheet that gives me a line-by-line transaction. Everything that goes out of the multi SIG is very transparent. I then used what the SES group started with; they created a tracking spreadsheet. It has some mechanisms to ensure checks, so forecast helps to do forward-looking budgeting. I am using that, and the experiences with that find it was pretty similar to the spreadsheet I started with; it lets me track individuals. Individuals, in some cases, are individuals or LLCs. I also have auditing companies like chain security, tooling set-ups like Satara, other third parties like block science, and individual LLCs set up for PE.
    • I have not yet gotten it automated, but it is a known monthly process that I go through, having the checks working with other multisig owners to get all those processes sorted. Over the last couple of months, we have been better at forecasting some of the challenges with third parties. We have some slightly larger expenses for audits, and those are not a month-by-month process. Based on how we split the auditing and the contracts coming through, they can be larger or lower. Not a problem; it just sorts of skews the numbers sometimes. My plan to make that more transparent is to summarize the budget, break that down, wire the numbers where they are, give a bit more explanation, and provide that on-chain verification if people have concerns about it.
    • That has all been going well. Some pain points: sometimes it takes a little bit of time and effort to get the invoices from people on one of our third parties. We are a couple of months behind. I will have a significant outflow in the next month to cover that. Due to the way we work, we also need to provide the next quarter or, in some cases, six months of payments upfront to support that access to software over a long period. This can be a big number. My budget reflects that, so it is not a problem. From an accounting point of view, it shows that, up and down, outflow, as needed, is a good question, David.

32:02

  • David Utrobin: Many of our CU is set up to receive our budgets through a module called DSS best, which gives us a linear distribution of a budget over time. How do you structure upfront six-month software expenses into the DSS best stream? I would imagine a one-time payment. How do you navigate that problem because that is something that you are also struggling with?
    • Derek: We are lucky in the sense that our third party did not provide the invoice upfront. In the future, if we needed to fund that upfront and be able to put down a deposit, we would need those funds from the get-go. We have had some leeway, and I accounted for that in the initial budget; it gave me some space to handle it. We have had some surplus in the core budget for some time, and we put some of that into the emergency MultiFit SIG because it is higher security. It is not the one we have access to monthly, so it has been parked there. This will be reflected in the half-year or annual audit that we have all the funds, what is surplus, and what has to go back into the surplus buffer or get reallocated if needed elsewhere.
      Using the spreadsheet from SES has been immensely helpful for the solution. It also works on two levels. Internally, within the CU, we have the line-by-line reference. There is a lot of personal information there that is not shared broadly or beyond the CU itself. Then it abstracts those payments into groups. We can put forward to the community these groups. I want to detail this, which will take a little time to split our L2 costs. What are our core protocol costs? Where are we spending costs specifically on certain contractors to have a more transparent discussion about where costs are and why they are the way they are. I will wrap it up there. In terms of resources, you have here the spreadsheet and want to review it so that people can look at it. That will help compliment the work that those guys have been doing. If there are any questions, feel free to jump in.

34:49

  • Unknown: Are our CUs supposed to be contractors of the DAO, or are they part of the DAO themselves? If they are just contractors, it is the money, money, and MKR that goes out the door that matters. Whereas if they are part of the DAO, like employees, we need to investigate a little more into what gets spent. We should at least have the right for our finance folks to ask for more line-by-line stuff. The easier approach from the Dallas perspective is that all these Core Units are contractors. Then, are they performing? Are we getting our money’s worth? We do not have to mess around with all the internal finance.
    • David: If you treat it that way, the challenge is to check that they perform well and that the accounting has integrity. Even within our team, I can only really use my example. I am on a salary, and our other two full-time team members are also on a salary. Are we working for a salary under this specific entity for our team? Yes. Are we salaried employees of the DAO? I have no idea. Our team also has eight to 11 different, on and off, part-time contributors who all bill approximately sub $1,000 a month. They are not on contract but are on will contractors. So are they at-will employees, or are they contractors despite not signing a contract? I do not know.
    • There should be room for salaried and contributors with each CU entity restructure. Whether or not the DAO delegates and MKR holders want absolute transparency and proof of integrity, that will create oversight CUs. This creation will be specifically for accounting, AppSec, or other functions. If not, there must be requirements for each CU to handle oversight in-house by themselves to a degree. How much granular transparency and integrity checking do you want to set up, and how? Am I hitting the mark there?

37:35

  • Unknown: First, we will need an accounting CU no matter what we decide. When someone comes to any CU and provides a budget request, do I or anyone else in the DAO have any business saying? Well, why are you spending 30,000 on travel or 40,000 on hardware? We can pick out individual elements and ask why it is so high? Suppose these contractors provide a service that we renew by giving them more money every quarter. In that case, it does not matter how they spend it as long as they deliver the results that we feel warrant giving them more money the next quarter. My question is, how centralized do we want the oversight of the budget to be? This is unusual for me to be on this side of the spectrum of less bandwidth for the DAO and probably less liability for both parties. These are all legal entities, for the most part, that are providing services to the DAO. They also have employees. We should clarify this because if people waste money but still deliver on what their bottom line is worth, it is not our business if they are contractors.
    • David Utrobin: Do you, as the delegate, want CU to have efficient spending and some function to call people out? Although it is micromanaging to some level, it is not wrong to have some function for efficiency. Sorry for going out in turn; I saw Nadia has her hand up, but I wanted to bounce back off that.

39:27

  • Nadia: From a legal perspective, we are all contractors because if we want employees, we should incorporate companies in each country where the employees are. At least, that was what I had to do with my career in it. We are incorporated, we have a legal entity, but I can not have employees. I wanted to do that; I will need to hire these people worldwide, which makes no sense. How I manage the expenses is difficult. I agree with all of you. I have 12 people in my CU. My payments go to different partners and campaigns, creating content and organizing events. It sometimes is insane.
    • I hired an accountant who is helping me with that. Every time I make a transaction, I have to fill everything in a spreadsheet, which allows me to keep organized. Then, I can present that information in the format I want. It is missing an agreement on what the Maker community expects from the CU regarding how we show our expenses. I do it in one way, and every CU does its way. I like Ace and the Real World CU’s initiative in asking for all our expenses, creating a unified vision for costs. I want to know what the community thinks about this and how they want access to our expenses. Presently, when I close a month, I post the growth updates in the profits and losses. I am planning to do it at the end of the year. I will return the remaining budget to the DAO. We should at least agree with all the CUs to do the same.

42:58

  • Sebastien: We have discussed it a lot, and that is to dive into many problems. If we want to go into the details, I have recorded it, and we spend a lot of time getting all the invoices. We can check if you buy a pen and surprise, the pen was too high or too low. I have done a lot of that in the past, and it is not that useful. I agree that you are paying someone to do something, and what matters is if you get the result. Getting the results is not easy because we have over 20 Core Units. We do not know much. If we take every individual in this call, we do not see what everyone is doing, so we are not tracking. However, that is all, and it should be reasonably simple. In my Core Unit, it is quite easy.
    • We have seven with some part-time. Everyone sends an invoice adjusting an amount or proof of spending something else on their work. I then reimburse everything. It is seven payments per month, so it is not that much. If I need to pay for something, I will use my bank account for my company to pay for it then I reimburse myself at the end. I see that everyone is freelance, but you can analyze all the expenses in detail. You may also analyze what was spent and over budget to give a more precise view of our expenses as a DAO.
    • For instance, there was 2 million upfront that was not recurring. We should tell the community that while we did have a lot of expenses this month, it will not continue. At some point, Mark did a great analysis showing that the cost run rate is half of what we have currently. It may feel like we are spending a lot, but we spent half of that. It is not expensive to have this information, which is super helpful. We have difficulty knowing how much is we are spending on each strategic initiative of MakerDAO. The question at the end of the year is how much of the budget of MakerDAO we spent on Real World assets? For all coins? If it’s only 1%, it is not a strategic initiative. If we spend 10%, that is a strategic initiative. That allows you to see if that is interesting or strategic for the DAO. It is not easy to ask how much Dai was spent on assets; this is quite complex.

46:19

  • David: I was going to disagree with you on one point. I agree with a lot of what you said, but the cost of an initiative is not necessarily tied to its impact. You could have very high-cost low impact initiatives, and you can have very low-cost high-impact initiatives.
    • Derek: I would pick up a comment on the sidebar referring to Core Units regarding them as profit entities. I do not think they are. At least in my case, everything will have to be or is declared as either being put forward to a cost center, an individual, a third party, an auditor, or returned. We do not have strict rules in place about the returns. Instead, we have these loose agreements. As Nadia said, we will do an end-of-year audit and return the funds. Part of the problem is that this is not explicitly specified. We were all working towards that. I do not think all units are for-profit entities. At the end of the year, we do not expect a surplus of any sort. If we do, we put that into the emergency budget, which will require a discussion. I agree with people having expectations. I’ll leave it at that. You are onto something there that having formalized agreements and expectations is vital.

48:54

  • David: I will skip prompt two because I failed to realize that Thomas Flitter, who led an information output audit that our team was doing, is not here. I wanted him to speak a bit about these products. I am happy to table this for another time. Here is the gist. Outside of budgeting, accounting, and reporting, there is a level of communication that stakeholders expect to access your team at a certain level. They want to see what your team is doing to understand the story and the progress function.
  • The third prompt that I had was about cross-functional initiative coordination. We have about 18 CUs working on a broad range of initiatives, sub-initiatives, and sub-sub initiatives. Over the last year, we have been operationally and internally working towards greater efficiency and tracking. We have seen many different tools emerge, like the shared holiday sheet to put up their absences. We also have a cross-functional initiative tracker covering our mandated actors’ calls and going through line by line.
  • We will also be mapping out initiatives and who needs those initiatives. Who needs the sub-sub initiatives? We will also try to document everything to have clear expectations across the board. People have mentioned that one big concern is efficiency in our operations. I think getting to be very efficient as a decentralized organization with various independent CUs. I want to report what it is like from the inside. The pain points, from my perspective, are just the fact that these tools are not to the level that they should be yet, but we are early in making them.
    • LongForWisdom: Recently, we have been looking into greater detail the SCS initiative to make the cross-functional coordination more effective. It has worked in the past but excludes not explicitly Core Unit facilitators. There is some debate about including people working on the front ends that support Maker in some of these meetings, which could be helpful. However, it is also strange because they are not technically part of the organization. This strangeness stems from the fact that membership of a DAO is fuzzy. To have these cross-functional initiatives effective, you need to make the meetings and communications transparent and public, if possible. In some cases, that is not possible, making it harder to ensure everyone gets the information you need.

53:03

  • David: One big concern we had inside the mandated actors meeting months ago was that we did not know who led these major initiatives. We do not have a singular coordination call for many of them; we have this one big call per week where all the facilitators gather and work through blockers, dependencies, and the next steps. It is hard to scale 18 teams and eight different initiatives. Underneath those eight, there are 64 sub-sub initiatives. A big part of the challenge, with exclusive access, is who goes on a mandated actress call. Is it just facilitators? Or is it facilitators, plus key coordinators, and product leads? The Gov Coms team has been working with SES, Derek, and the different engineering teams to figure out how to map these initiatives.
  • Furthermore, how do these maps include the relevant stakeholder groups? Other relevant people are within the coordination effort or track these initiatives or sub initiatives. If it is just your team, you are in an echo chamber. Suppose you are not sharing the information about your coordination calls somewhere publicly or doing proactive outreach to people outside of your group. In that case, you will not have effective feedback loops or solution design conversations. You will increase the risk for what you are building, and it will not be the right thing.
  • In general operations, we want to open up these initiatives to relevant stakeholders to join in these conversations, coordination calls, documentation, or whatever it might be. The first step has to be this full flesh out the picture. There must be a fully synced-up agreement on the map of the initiatives. You must understand who the leads are and then continuously identify relevant people. Our team is creating a stakeholder database and an internal one that includes CU and delegates, members of media, and integrators. It is a pretty incomplete database at the moment. We also used that database to map out the stakeholder ecosystem. Who are the actual stakeholders? Who are the front ends, keepers, auction participants, and Oracles? Whom are the people pushing those sets or the new software? There is a whole web of stakeholders outside of our little CU and the delegated MKR voter bubble. This is important because our keepers, Dai users, and vault users are our business. They need some ability level to come in and see what is going on to give practice feedback.

56:45

  • Derek: To give a real example, you and I have been working with other stakeholders on L2. Sam, Chris, Bartek, and others in the team in PE are working on layer two. However, that work has a lot of dependencies with other potential L2s with the stock net group, integrations, and groups of possible SCS integration. Their keepers may also have interfaces. What we are trying to do is prevent having an in-group and out-group. As David said, we want to open this L2 discussion to the broader community and build it up. What are our targeted releases and growth? When can we expect to do the marketing work around these initiatives? What does it mean for other L2s?
  • We had a meeting last week where we walked through the key deliverables. We agreed. We had people from Nadia’s group deliver their thoughts and ideas around the fast withdrawals, the Dai wormhole, and MCT on L2. This built up a picture of a high-level roadmap of what we want to deliver. Then, we broke that roadmap down into its constituent parts, put timelines against it, and estimated against that. That work helps map things out for the broader community. We still want to roll that information up to the actors’ mandate and have that more broadly known and available to the community. As David said, everyone should be in the loop about what this is delivering when we expect it, the dependencies, and the risks. Are we putting in money where we should be? Do the objectives line up with what we initially set out? As Will said, we want that bridge-building to be visible for everyone involved. So, that is my little spiel, and we are working on it. I hope to open that up to the community. We can do that, back over to you guys.

59:12

  • David Utrobin: I want to echo what Will said in the chat; as a collective, we do not realize that ops risk equals reputation in an open organization like ours. A big focus of the culture and mind share of Maker has been on the financial risk and the aspect of technical risk. But in any business, there is also operational risk. The way that we mitigate these operational risks is through good coordination. When coordination fails, the products fail. That is when bottlenecks and delays happen. That is when six months of work gets thrown out the window because you did not talk to the person beforehand. You just wasted all the resources you invested - just my thoughts on this.

1:00:26

  • Eric Richards: Regarding operational communication, I just wanted to make a quick comment on collateral offboarding. With the recent offboarding, I will speak on my personal, real-world experience with Aave. About a quarter of outstanding Dai was from my Aave vaults. I was gone for the weekend, then popped on the forums to search for Aave. I do not generally jump into many signal forums, but nothing came up about offboarding when I searched Aave. The position was closed, or the vote happened quickly, with the ratio ticking up fast. I was liquidated without a penalty, which is great. But at the same time, it does not offer much time for the position change, especially when I was trying to support an asset that was a smaller portion of Maker since Black Friday. This was a six-figure loss that got triggered.
  • I was throwing up for two days, and I was gone on a two-day weekend trip. I know Maker needs to decide to have something, but four days is relatively short. Before I left, I was checking my phone and DeFi savor. When I talked with Nickolaj from Defi Saver, he said when that happened, we did not even know what rates were coming up next. All my fail-safes failed right there. Now I am thinking, what can I do for Maker? I jump on the forum. As I dig in deeper, there is confusion around MATIC, seemingly with the operational units. I am not sure of precisely the coordination there. There is one vote on MATIC being offboarded in along with Aave. Suddenly, there is a chat about how MATIC will come up with its promises. Shortly after, there is another poll by Nick. Are we offboarding MATIC again? I am sitting here trying to figure out what asset I can get back into to make up for my losses. Honestly, I do not have faith in the protocol at this point because I only stepped away for four days when I had adequate fail-safe, and I was on my phone. In addition, with an asset like Aave, you have D3, which has a lot of protocol integration.
  • From an outsider looking in, I am trying to use the platform. I have been an early supporter. I was on the call on Black Thursday and jumped into a vault shortly after, although I could not get the keeper up in time. I wanted to help the platform as best I could. Now I am sitting here on this column, not even knowing if I have enough for the dust limits if it gets increased too much. I also just got taken out. From an outsider’s perspective reading the forums, the operational philosophy is a little confusing and disjointed, significantly when the hammer dropped as fast as it did. I have discussed that, but we do not have the time now. Thank you.

1:04:08

  • Unknown Speaker: We can all agree this was a terrible user experience, no matter how big the vault size was. And this come up before? We all recognize that it is not a great situation, particularly when you are not the first to go to our forums, look around, and not know. I ran into somebody last week that had a uni LP that got offboarded and was wandering around trying various Discord channels. I happened to see them and talk to them. We are all ears if you have suggestions about forums or communication venues that are more likely to be seen than what we are doing now. We recognize this as a problem we need to do better.

SES Updates

1:05:25

1:23:24

  • David Utrobin: Can I jump in with one quick comment? Another part of increasing the visibility of these meetings is the management of the public calendars at MakerDAO. In the last two months, the single MakerDAO public calendar for votes and calls was split into two parts: votes/important dates and calls. Part of the vision for increasing the operational efficiency and the visibility of these calls is to put many stakeholder alignment meetings on the actual public call calendar. A function should be provided in the description for outside stakeholders not directly invited to request an invite. This does not exist yet but is something that my team is envisioning. We are working with Bauder and others to do this. This is not like specifically for L2; this is can generally scale across different initiatives. That is the primary goal. We want to provide a framework that anybody can use and allows stakeholders to easily subscribe to a public calendar and filter (Ctrl F) what they are searching for.

1:25:19

Conclusion

LongForWisdom

1:32:54

  • LongForWisdom: Thank you for sharing that. Unfortunately, I must skip on questions, given the time, unless anyone has something very urgent and relevant.
  • Wouter: The slides I added to this presentation will collect and post them as a separate forum thread.
    • David Utrobin: They are also posted already. People can access these slides live before the call. Keep that in mind for future joiners. Anybody here could check these slides out. They are usually updated right before the call. But all this stuff is currently available on the GNR Agenda forum post.
    • Artem Gordon: The slides will also be on the snippets in about five minutes.
  • Wouter: I am happy to come on again next week to take any questions or comments.
    • LongForWisdom: All right, thank you, everyone, for joining us today. We will hopefully see you all again soon.

Suggestion Box

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

Liq: Liquidations

CU: Core Unit

Credits

  • Andrea Suarez produced this summary.
  • Artem Gordon produced this summary.
  • Larry Wu produced this summary.
  • Everyone who spoke and presented on the call, listed in the headers.

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