Charles St. Louis
This week’s activity
- The monthly MIPs governance poll was submitted for the six proposals that passed the inclusion poll stage. This includes
- There were four polls that went out for whitelisting oracles:
- There were eight polls that went out for pointing and proposing new light feeds; More specifically for Kyber, Infura, EtherScan, and Gitcoin. If Nik is here, he might want to add some details about what these polls entail and what the next steps are for these are if they all pass the governance polls.
- Nik Kunkel: Sure. The next steps are for the whitelist. They will get bundled into an executive vote. We need to make a change in the whitelist to add them in. For the light feeds, it’s a little bit of a long process because we now need to have all the projects that got voted in to have them set up and configure their feed. That process will probably take under two weeks. We will probably get started with that this weekend, and then they too will get bundled into an executive vote, which will be held on June 26th, I believe.
- Today we will do the Governance Facilitator Review of the polls that passed.
- The MIPs Governance Poll passed, so the Executive Vote will proceed if the Governance Facilitators confirm yes on the outcome. That vote will go out this coming Monday, June 21st. I do want to note that the executive votes for MIPs do have an expiration of 4 days, after which they will have no effect, so the proposals would move to the accepted status if the executive vote is included and passed within that 4-day limit. If the executive fails to pass within that limit, the proposals would have been officially rejected.
Next week’s activity
- Next Thursday, the Governance Facilitators will perform the Governance Cycle Review as part of this meeting, and summarize and discuss the results of the past governance cycle with everyone on the call. The meeting is also an opportunity to discuss the upcoming governance cycle and any potential submissions for July’s governance cycle.
- Just a note about the July cycle. Even if it is a couple of weeks away, I want to note that the formal submission period does end on July 8th. So if you have any proposal’s in progress, submitting them for review sooner rather than later is definitely a good idea.
- The two governance polls to onboard KNC and ZRX have successfully passed. They will proceed to an Executive vote at the end of the week, on Friday, June 26, along with the other polls that Nik mentioned.
Community Greenlight Polls
- Community Greenlight Polls will go out next Monday on June 22nd in the final week of this governance cycle. If the amendment MIPs pass this month, the community greenlight polls will start on the third week of the governance cycle, ending at the end of the governance cycle instead of carrying over to the following month, like currently.
- This month’s Community Greenlight Polls are for:
New Activities in the Forum, MIPs subcategories
- The Proposal Idea category was created last week. This is a place where you can propose your ideas for improving the Maker Protocol, technical, governance-related, or whatever. The first post in there was the pre-MIP discussion for the redesign of the Maker protocol liquidation system. The discussion is still going very strong. I do encourage everyone to take a look when they have the time.
- There are three other posts in the Proposals category, which is awesome to see:
Polls and Votes Category
- I’ve created a read-only category for polls and votes, dedicated to providing more awareness and notifications of what’s going on during the governance cycle, in terms of voting. It will be the go-to place to see the active inclusion polls, governance polls, or executive votes related to MIPs. Right now, it has the governance polls, and as of Monday, I will update it with the executive vote. That concludes the update today.
- LongForWisdom: I wanted to highlight that June’s governance cycle finishes on the 28th. There’s then one week when we don’t do any MIP governance cycle things. We have like a week’s break where we don’t need to do MIPy things.
June’s Monthly MIPs Governance Poll Results
Governance Facilitator Poll Review
- I’m looking at the governance poll for the MIPs monthly cycle. This included:
- MIP13, Declaration of Intent
- Four amendments, amending MIPs 6, 8, 9, and 12
- A sub proposal to ratify the Foundation risk team as an official risk team.
- The poll passed, with 3,700 MKR, with 12 unique voters. I’m not sure if this is less than what we had last week, but there was no MKR vote against it, so I don’t see any reason to prevent this from proceeding to the executive.
- The executive that Charles mentioned will be live this Monday, June 21st.
- Cyrus Younessi: Did I hear correctly that there were only 3,700 MKR voting?
- LongForWisdom: Yes, with 12 voters. I assume that the turnout was low because the prices are high, and the monthly cycle requires you to vote on the same thing three times, and this is the middle vote. So I’m not terribly surprised that this is not attracting a huge amount of participation. I want to encourage people to vote, nevertheless.
The State of the Peg
MCD system stats
DAI 24hr VWAP Graphs
- In general, Dai supply is pretty stagnant from last week. $106 Million from ETH, $525 K from BAT, 1.7 million USDC. WBTC still just near capped out, top of it's DC, at 9.99 million.
- Here is the Dai price over the past week.
- Bit of dip and fluctuation in ETH price, though not large margins or swings. Dai price did rise as ETH fell. That rise against ETH is a pretty consistent trend. Especially in the past month, Dai snapped back into that tight negative correlation.
- ETH<>DAI trades spike rapidly above a dollar initially as ETH price fell. Pretty consistent, as I mentioned. ETH price recovered from the dip and Dai price stabilized, coming down again. These are tight fluctuations, although the last few weeks have had more ETH volatility. With ETH price cheaper than a week ago, Dai price is still a little elevated. ETH being cheaper now produces hesitancy in Dai holders to increase leverage, which is also a historically consistent trend.
- If people are unsure about what ETH will do, then they are unsure about how to lever up.
- Looking at an order book perspective for DAI<>USDC trading. The trading price has leveled at $1.008, which is a small buffer above a dollar. Slightly less than what ETH<>DAI trading had indicated. Presumably, because there is a larger spread on ETH<>DAI vs. DAI<>USDC.
- USDC Dai is flat at this low ~$1.7-1.9 million supply level.
- BAT Dai is maintaining that half a million level, significantly down since March, yet stable.
- WBTC Dai still at its DC cap, and I know we’re discussing it in a few threads, so that’s all I’ll say.
- One Dai from ETH, after that quick $10 million supply and burn, there was a dip going to $102 million, then recovering. Essentially, Eth-Dai has a general growth trend over time with little contrary data. There is no indicator that anything has fundamentally changed with Eth-Dai.
- All-in-all is pretty quiet.
- LongForWisdom: No questions, but Jiecut from chat asked: “Compound effectively has negative rates because people can lever up on ETH to get COMP.” So potentially people are choosing to lever up there compared to Maker because the rates are Zero.
- Vishesh: There is a whole other thread about secondary markets. Essentially what we tend to see with secondary lending markets is a tight relationship with the relative spread between rates and what people refinance to and from. I do think that what’s happening with COMP distribution lately can befuddle some of the numbers.
Open Ended Discussion
- Andy: Last week, Nik mentioned pushing through Oracle things in the weekly Governance Cycle, is that the reason these Oracle polls are down now or is it because we wanted the more traditional MIPs process?
- Nik: The poll this week was to fix inconsistencies in MIP10 that we needed to fix. In the interim, while we refactor those, we wanted to use the short cycle.
- Andy: Cool, really awesome to see those come through. There are some fantastic proposals coming through.
- Nik: If you like that, there’s more on the way. More light feed onboarding is a big priority for me personally, and it should be for the community. It further decentralizes the oracles, makes them more robust, and makes them more attractive for third parties. We’ll see a lot more whitelisting proposals too.
- Andy: On that point, I think that it’s well worth it to read Rune’s response about liquidation process. He’s consistently pointing people to MIP1 and problem spaces. He continuously discusses edge cases like OSM failures, for example. If we have OSM failures, then we likely have bigger problems with our liquidation system. Understanding a failure and what we’d have to focus on as a Governance community. It would lead to more interesting conversations on this call.
- Nik: Couldn’t agree more.
- LongForWisdom: If you haven’t reviewed MIP1, I encourage people to look at it. It’s the closest thing we have to a roadmap, at this stage, of what to complete before the foundation dissolves.
- Charles St. Louis: Akiva asks, “Is there a list of light feed oracles on GitHub or the forums?”
- Nik: Github MIPS repo, specifically component 17 is the best place to look. I would have to update this to include this week’s polls. Currently, we should be at 24 total.
- SamM: Currently, as we add more collateral and adding more oracles, it seems like it may be like a quadratically increasing function of those two components. I’m curious about how to scale up to that massive number in the near future.
- Nik: You’d have to describe which part of scalability? Feeds, oracles, customers, performance, which aspect are you interested in.
- Sam: Feeds. The number of oracle providers and collateral that need feeds since both numbers are going up that looks to be a quadratically scaling number, which concerns me.
- Nik: OK. So in terms of the number of feeds, there are diminishing returns. They give better security in theory, but we pay feeds 1,000 Dai a month to cover their expenses, dev hours, maintenance, and monitoring. I think we’re aiming to have in the short to medium term about 30 feeds.
- An equal number of dark and light feeds seems attractive, even if all the dark feeds are civil, for instance, they wouldn’t be able to reach consensus on any price. Same if there was a social media campaign, turn off sentiment against Maker, and all the light feeds came to a consensus to screw over Maker, they couldn’t change the price either. It seems like an attractive position to be in. That’s what I’m trying to push at the moment. We shouldn’t be adding just anyone or add low-quality partners. We should aim for the biggest players in the ecosystem. We need to be patient, so we can evaluate those trade-offs.
- In terms of oracles themselves, actual customers, with governance in place, everything goes much quicker. Now that we have specific dates to make things happen doing things in parallel can be rapid. It’s only when you have to do them one-by-one you incur the largest time penalty. It’s no more effort to whitelist eight versus one. I’m encouraged by governance going smoothly until now and think we’ll hit a good rhythm the more we do this.
- Sam: So you want 30 dark 30 light and leave it there? Not increase it ad infinitum.
- Nik: We’re at 15 dark feeds right now.
- Sam: So there is a cap a secure enough number, you don’t want to keep going up? Due to cost?
- Nik: I don’t presume that the number is 30; the community needs to weigh in on that. It seems like a good start considering we have 15 dark feeds. Matching with light feeds and doing 30 seems like a good point to hit and stop. We can evaluate from there if we want to add more light feeds or do we want to stop. Adding dark feeds is something a little complicated since they’re anonymous. How do you evaluate the credentials of someone if they’re anonymous?
- One of the details in MIP10 is what those requirements could be. If you’re a large scale miner on a large blockchain, for example, you could sign a transaction on-chain. Verifying good standing for whatever blockchain securing, however much hundreds of millions or billions in value. We may want to explore other metrics, as well.
MCD: The Multi-Collateral Dai system
CR: Collateralization Ratio
DC: Debt Ceiling
ES: Emergency Shutdown
GP: Governance Poll
SF: Stability Fee
DSR: Dai Savings Rate
OSM: Oracle Security Module
MIP: Maker Improvement Proposal
- Artem Gordon produced this summary.
- Tim Black produced this summary.
- David Utrobin produced this summary.
- Gala Guillen produced this summary.
- Juan Guillen produced this summary.
- Everyone who spoke and presented on the call (listed in the headers.)