Episode 85: April 09, 2020
00:00: Intro with Rich Brown
09:25: MIP 3 Governance Cycle with Charles St. Louis
26:54: LFW Governance at a Glance
31:29: GSM and Dark Fix review / Social Layer solutions with Will Barnes
45:02: SCD shutdown with Mariano
54:13: Zero-bid vault auction data with MakerMan
57:35: State of the Pegs with Vishesh
Agenda Summary and Talking Points
Hello everyone and welcome to the April 9th edition of the Governance and Risk meeting, my name is Richard Brown, Head of Community Development at MakerDAO. In keeping with the trend that we have been seeing over the last few weeks we have a furious level of activity going on in the Governance Community, and that’s translated into a pile of things that we need to go over on this call. So the agenda is diverse and large. I’m going to keep my section to a minimum.
Charles St. Louis will give us a review of MIP 3. It’s a MIP that goes into the governance cycle and will look like in the future. So it helps the ecosystem to internalize some of the process that they have brought to the table for us.
LongForWisdom will give us his “Governance at a Glance” segment.
Will Barns is back and better than even. He’s going to review the GSM and the Dark Fix. Those were very important discussion back in the olden days before everything changed, but they’re still important now and it’s time to revisit these legacy topics which is another topic that I have been beating the drum on for the last couple of weeks that we can’t lose all threads. So he will talk about the Dark Fix and also review what solutions need to be moved to the social layer and what the social layer looks like.
Mariano Conti is here to talk about
SCD shutdown and giving us a bit of a hat here. Actually that ties into what I want to talk about today too.
SCD shutdown is not a matter of pressing a button, it’s complicated.
MakerMan is here and will give us a recap of the work that he’s picked up. Super exciting to see him jump in and pick up a task: zero-bid vault auctions and how to model that data.
Cyrus is going to give us a heads up on the new series of risk calls we have next week.
Vishesh will talk to us about the state of the peg.
Huge agenda, not a lot of time to go over it, so I’m going to do my segment very quickly and then we can move on. I only have one thought, the thought of the day.
We have lots and lots of things that are happening at once, the community is self organizing in ways that I could only have dreamed were possible 6 or 12 months ago. Super happy about that. The community as a whole is taking care of its own destiny and that’s what the DAO is all about and what people has been working towards. As that autonomy increases we’re going to run into some more growing pains. That’s what Governance is, a never-ending series of growing pains, improvements, and iterations. We have been growing, iterating and improving all this time, so obviously I don’t think that’s a problem, but here are some examples of things that have been happening in the community just very recently, that have been brought to a vote:
All these things are very healthy and very cool. Here is the “but”, there are constraints that we all operate under. The question becomes what is possible in timelines allocated to us in light of all the other things. So what I want to talk about is how we handle coordination when polls go through or get proposed. There is a large number of moving pieces involved with the ecosystem. Piles of stakeholder, piles of process, piles of actors’ inputs inside the Foundation, inside the DAO, inside the crypto space, or the DeFi space in general. So I want us to start thinking about coordination of tasks, determining feasibility, making sure that stakeholders have been brought into the conversations. Because we’re running into situations where the majority of the community signals their intent to move in a certain direction or have something happen, that’s great, that’s what governance is all about, but, intent doesn’t equal implementation necessarily.
Let me give you some examples. The
SCD shutdown is a good one. The community came up with the desire to shut down
SCD. They did some research and figured that April 24th is a good day to do it. I do not dispute that. But we’re going to see very soon that there are things that might literally be impossible to do. We’re going to have timing constraints, resource constraints, just pure mechanical constraints. There’s occasionally an array of things that the smart contracts team simply cannot do. Or we’re going to require iterations of smart contracts, which imply additional auditing, or testing, and developers that need to be found and reallocated so, there’s implementation details that may impact timelines.
I will ask the community that when we start coming up with these polls in the forums that we do a better job at feasibility study and identifying the stakeholders that are required to make this thing happen. To ensure that the thing that people want to have happen is possible in the desired timing.
As always, discussions happen in the Forum.
Questions and Comments 1
Cyrus: Quick notice: a few weeks ago we were doing risk presentations on some tooling that we wanted to walk through with Governance. Obviously that got sidetracked a bit, so we wanted to resume that work next week. We wanted to do it on consecutive days, so we’re going to be holding additional Governance calls next week, on Tuesday and Wednesday. Timing will probably be one hour after the current timing of the Governance calls. I’ll put a public notice, but we wanted to give a heads up that we will be doing additional risk calls next week.
- Rich Brown: Yes, this is probably something that we will see in the future, so we’re reaching density on what can be achieved on these calls. A variety of topics need to be addressed. We had these chats a long time ago, whether we should have 4 or 5 different calls during the course of the week. It was my opinion that it’s better to wait to reach density before we start splitting up into separate corners to do other stuff. We’re rapidly approaching that state. Cyrus’s team has been doing a fantastic amount of work. Piles and piles to go over and there’s just no chance that we can take care of it in these calls, so next week is Risk Week.
Maker Improvement Proposals
Charles St. Louis
MIP 3 Governance Cycle
MIP3 Thread Link
Hey everyone, before I get started walking through
MIP 3, I would like to give a brief overview of what’s going on in the world of
MIPs in relation to Governace. Recently we launched a couple of blog posts detailing the self-sustaining MakerDAO initiative. One of those key pillars is the proposals that are created through the Maker Improvement Proposal Framework. On Monday we proposed the initial 13
MIPs that we feel are necessary to create long-term governance and self-sustainability of the protocol. So as of this week, there’s been a lot of constructive feedback and positive feedback from a lot of the community members. I do encourage anyone here who hasn’t taken a look yet to dig into them or at least read them if you have the time.
In terms of the actual
MIPs, or the phase of this whole thing which we’ll get into later, the current
MIPs are under review during this time period. This means that
MIP authors work with community members on integrating feedback into the
MIPs. This is to try to cover all the bases and any gaps that are there, or any wording that needs to be clearer. This period will last until April 27th, after which there will be something called the
Timing Poll, which is a special Governance Poll that gives the community a chance to decide if they want to proceed with a ratification vote so that the
MIPs will be formally adopted, or to delay the ratification vote for one month and institute a period of time for competing proposals to be proposed by the community.
If the community does indeed decide to proceed with this ratification vote, it will occur over the period of May 1st to 4th. If the vote passes, the first governance cycle, defined in
MIP3 will begin on May 4th.
There will be some references to
MIP0 during this walk-through. I do urge anyone to try and read through that. I know it’s quite long, but it does help clarify everything that’s going on in the world of
The first component of this
MIP is the Governance Cycle Breakdown.
Each monthly Governance Cycle begins on the 1st Monday of the month, with Maker Improvement Proposals being submitted by this time.
Those MIPs will be considered for inclusion at the end of the month, during the executive vote.
The governance cycle ends with the executive vote that would begin on the 4th Monday of said month. After the executive vote occurs there will be a period of time for review, so a meeting like this, where you can talk about the retroactive aspects of the month and also plan for the next month ahead.
The time is based on UTC, we thought that we had to make that clear.
First week of the governance cycle is when the actual
MIP themselves are formally submitted into the governance cycle.
Formal submission is the 5th step in a
MIPs life cycle.
Long before that there is the conception phase, where the idea is born on forums or twitter.
Next is when the actual proposal is submitted to the discourse forum, where it needs to comply with the actual components and criterion in the
MIP template itself.
MIP editor will check that it fits all the standards. After that it enters a formal Request-For-Comments period. In this case, it is exactly what’s happening now, where the community and
MIP authors work together to iterate on the actual content and format of the
MIPs to achieve the broadest consensus from everyone in the ecosystem.
During the RFC phase there are a couple of things that are important to note: there’s something called the
feedback period and the
Feedback period is the minimum amount of time that the community has to review a specific
Frozen period is when everything is set in stone and there are no more changes that can be made and it’s awaiting to be formally submitted.
At that period in time, when those criteria have been met, it officially enters the
formal submission phase, which is what is happening on the 1st Monday-Wednesday of this month. So the forum submission is done basically by submitting it to the discourse forum as well as GitHub and then it can be iterated on.
During the first Thursday of that month the actual Inclusion Poll review meeting happens; the community comes together and discusses which proposals are in accordance with the guidelines as well as well as which ones may be appealing to the community.
Week 2, on Monday, is when the Governance Facilitator pushes this Inclusion Poll.
The proposals that the Governance Facilitator have gauged general consensus on are included. Week two relies heavily on the Governance Facilitator working with the community to figure which ones are the best ones to get included.
As I mentioned before, there is something called the
Default Inclusion Threshold. It’s a variable amount of MKR that can be changed with the sub-proposals that are defined later on. This threshold is a value that is automatically counted towards the no vote tally of the Inclusion Poll itself. The
Default Inclusion Threshold is changed with these proposals if the community feels like the current value isn’t fair. I do know that the value is not set in this
MIP itself, but I do have to make that change and be upfront that I did not include it. My proposal will be 3,000 MKR.
During an Inclusion Poll the community comes together to vote yes or no on whether to include this proposal in a Ratification Vote. If the yes votes for a given proposal are higher than the combination of no votes plus the default inclusion threshold (3000 MKR), the poll passes.
At the second Thursday of the month the
Governance Poll Review occurs. This is much like the current Governance Polls, where general risk and governance topics are discussed at hand without any
MIP decision making occurring.
Next is week three. In the 3rd Monday- Wednesday of the month:
The governance poll will officially be submitted by this governance facilitator.
The poll will run for the duration of Monday until Wednesday.
The poll is also a yes/no MKR poll that accepts or rejects the combination of all the
MIPs that have passed the inclusion stage.
On the 3rd Thursday of the month, the governance community comes together and decides on reviewing the executive vote options. So it’s a public meeting that will focus on either future proposals or any controversies surrounding the current Governance Poll and future upcoming Executive Vote with relation to those
- In case there are too many no votes in the governance poll, and there is evidence that there is an effort to silence legitimate concerns in the community this meeting provides opportunities for compromise and the community and governance facilitators must consider whether it is creating a risk of governance split. If a Governance Facilitator believes that the proposed executive vote will result in a governance split, the Governance Facilitator should not deploy the executive vote and must instead work with the community to resolve the problem. Thus, in the future when there are multiple governance facilitators,if all of them are in consensus that the executive vote creates a significant risk of a community split, the executive vote will not happen and the MIPs that were supposed to be up for an executive vote, instead have their status changed to deferred.
The last week of the governance cycle is week 4, and during that Monday the executive vote is submitted if the governance poll has passed, and the no-votes are not too high to deem a threat to consensus. This regular executive that will be proposed will last for 7 days, meaning it will be in effect after those 7 days.
- If the executive vote passes, there is a
Retro and Planning Meeting. It is a retroactive assessment of what happened during that month and some time can be allotted for next month planning to be proactive. You can think about the poll outcomes, what can be optimized, what changes can be made, sub-proposals for the actual default inclusion threshold modifications, and so on.
The second component of
MIP 3 is the
Default Inclusion Threshold Modification Subproposals. This threshold is crucial to the poll and is proposed to be set at 3,000 MKR, but can be discussed. It’s probably the biggest thing that we want feedback on at this point.
In this component there’s a default period of 3 months, so when somebody submits the change for the default inclusion threshold it will last for a
default feedback period of 3 months and has a
frozen period of 1 month. These periods can overlap and are based on the MIP author’s decision on whether the
frozen period can start before or after the
default feedback period.
- Basically we just provide these templates for making those proposals to change the
default proposal inclusion threshold, which includes the number of the subproposal, the author, the date proposed, and then the specification section is the summary. So it’s a proposal to modify this threshold to x value, what’s the reason behind it, and what is the exact value.
That is a lot of me talking and I’m sure there are some questions, but that is an overview of what
MIP 3 looks like and I do encourage everyone to ask questions, I’m not sure if we have much time on this call, but please go into the forum or in the Rocket.Chat channel, and fire off all the questions you have, or feedback or any additions that you may think are necessary.
Questions and Comments 2
- Rich Brown: I’m not seeing questions in the chat but I want to echo that this is going to be one of the first
MIPs that we put into practice on a regular basis so if people have questions or comments, the forum is the place to voice them.
Governance at a Glance