[Brainstorm] 2021 mission and objectives

Maybe a CHF pegged DAI would be better since they are crypto-friendly and regulation is lax. Whereas the US regulators are moving in the opposite direction and the EU is looking into a digital Euro.

If i understand what @SebVentures said . And if ecostustem means what to do with a DAI-Euros. I think it should be relatively easy. I’m sure all protocole using DAi ($) will be happy to also use DAI-Euros

But do you think people will use it ?

EUR is also used in countries which are very crypto-friendly (ie. Malta, Estonia). IMO, euro-regulations for crypto are much more difficult to impose by a single state, and even if that’s the case, it doesn’t mean other states using EUR will support such regulations. It’ll be harder that all the eurozone impose regulations. In this regard, I see EUR ways more secure than USD.

This is referring to CHF, and that’s a very strong point in the sense, that the adoption will come with the amount of trading in that currency. In this case, EUR and GBP are probably the best candidates.

The anonymity of how our current system works helps bring in ideas and prevents people from being scared to speak for the possibility of having it affect them in the real world. If we want to retain Maker as a DAO installing leaders to do the bulk of the executive work would be a disservice. However, I believe delegation will fix much of that as people can give their voting power to others they believe hold similar views. That would fix the leadership issue you point out.

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One thing i think that would be interesting which is not listed here would be to devise some system to offer MKR holders dividends or at least something similar to dividends.

I know in the past there have been talks about something to incentivize holders to vote. Perhaps, you could devise a dividend structure that requires MKR to be locked in the voting contract in order to receive the payout?

From the things listed though:
I think i would be most interested in: sustainable workforces, layer 2 solutions, reducing the stablecoin exposure (at least via DAI vaults the PSM mechanism makes more sense to me there), and EURO DAI.

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I think this is an excellent way to keep focus for 2021. I think it is still difficult to narrow in on one idea as such a large group, but for me the clear winner would be:

For me, this is the lightbulb that brought me into Maker. A platform that was truly empowering. The Oasis Platform doesn’t care who you are or where you come from, or even what you plan to do with the loan. It’s all about allowing anyone to leverage there assets for any purpose they see fit. I was brought into the wonderful world of Maker because I wanted to sound the alarm about the Dust limit being raised to 500 DAI (thanks for the link too @SebVentures) and ended up finding a wonderful, supportive community that would actually listen to complaints and counter points of view. Granted with the gas prices and ETH/USD being so high, micro loans are far less possible than they were even a month ago, but I think that’s an excellent place to start.

As far as objectives, I think the following is rather doable:

Our partners are very eager and it seems like we have the back end work ready to get things moving in January.

I think this will have to happen this year, whether we are ready for it or not. The countdown is ticking as the Maker Foundation prepares to hand over the keys and this should absolutely be a top priority.

As suggested in my pick for 2021 Mission, I think this is incredibly important to the future of not just Maker, but the entire world. Our DAO is only as strong as the people we attract, and proving that we are dedicated to making this a system anyone can participate in, from the Oasis Platform all the way thought Governance is the way to do so IMO.

I believe all this could be done in 2021, while still working on some of the other great ideas above. But b setting our priorities I think we will get much more accomplished and we do need to step back and appreciate the scope of all we are trying to do.

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Yes (I pick this one, still I comment below in each of them) we are definitely going that way, in order to do that there needs to be further discussion in respect to regulatory compliance, this is not going to be the wild west forever and pretending to onboard real world assets without any sort of regulation in the horizon is like covering the sun with one hand, you can do it but it doesn´t stop it from shining. In that respect and moving forward in the rest of the items we should put the house in order before, what do I mean by that? The success of failure of maker is ultimately going to depend on the people putting in the muscle, ideas like FlapperDistributor: A Way to Distribute System Surplus while Minimizing Governance should be moved in front of the agenda, now we need to pay audits for increasing the LP debt ceiling for example, we need to streamline the process and onboard the best and brightest at competitive rates because that´s what´s going to make the difference in the ROI, the scalability of the workforce and inside organization.Thing like delegated voting are definitely going to bring the maker dao a more executive approach in 2021.

I´d gladly renounce to the voting rewards if they were destinted to hire more devs, hiring per se isn´t going to do anything without internal organization (not always two people in the kitchen deliver the best meal)

Yes and yes, something happened through 2020 that seems we got distant to other protocols, we need to create alliances and work together like we are currently doing with yearn. Perhaps it was the foundation stepping back and the lack of leadership (who is accountable for proper communication of decisions?) this will also be partially solved with delegated voting.

I like the idea, however as we currently stand with a 500 dai minimum dust it´s going to be an issue, we need to enphasize on integrations, no work from our end has been done there, glad the foundation is putting in the muscle. One objective that is missing is layer 2 solutions, if we don´t move we may get left behind as a retail bank for RWA loans for corporations instead of “banking the unbanked”

Agreed and critical dare I say, we are going to be left behind if not. Just to clarify this does not mean that we are doing things the wrong way, it just catches us on a cross road that other projects do not face. Yearn did it instantly, while other “DAO” have marginal repercusion on anything aside from voting, all development or most is done with the companies that funded the project, what we are facing now is what likely many will face later.

Agreed, again there is no team of legal background, would be good to onboard one to see in which battles are we getting in blind folded

I like the concept, however we have an issue, first there needs to be a market fit for the product, is there demand for it? Secondly how would the oracles work? Thirdly if there were to be demand it´s a niche savings account instead of trading, investments, consuming product dai is. Who would deposit a collateral, mint an index and keep it and pay an interest above it? The idea doesn´t click me from a practical standpoint. Different is if you deposit dai and extract a syntethic representation of a token, that I like but doesn´t solve regulations.

Agreed, I would also include a target for LP tokens, 300 seems plausible if not more.

Not sure about that, this is taking into account current market, it may very well increase in the future (hope I´m wrong) cUSD is a different animal, there we would be facing a substantial increase in revenue to mitigate risk, not entirely uncomfortable there, also presumming dai outstanding increases (let´s target 5 billion) the weight of stablecoins would decrease

Yes

Again the dust limits and gas costs to open a vault make it a fairy tale to bank the unbanked currently, dai usage is different though

Don´t sell yourself short! Definitely yes, we have 4m in the SB that could already be generating 600k at USDC-DAI in uniswap

Yes

Yes

Aave is issuing weekly revenue reports, (a one pager summary I saw on linkedin), flash loans last week generated 90k. Collateral swaps would be an interesting option to add to the menu.

Definitely, you can monetize eth and invest we should find a way to bring liquidity to maker token holders instead of them going to aave, we need to find a way to do it and avoid the negative feedback loop.

Critical

In summary of all of this, the key mission and key objectives that are conditional to the development of everything else imo s to have a mechanism similar to the flapper in order to be able to onboard domain teams & pay for operational expenses needed to grow and have an operational structure and procedures (similar to MIPs but for micro in order to be able to delegate decisions for more agile responses). We will be burning a lot of cash but that is needed in order to grow as fast as we need to grow to survive.

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This will be a key point. If you look at other DAO, salary and financial resources starts to be indecent. Even for smal and new protocol… So I guess Maker, as a leader, will have to align effectively

What makes sense to me is a mission statement similar to Maker The Money Lego. Put simply, if we continue to increase the value and associated utility the product provides users, the Project will grow increasingly useful and become the leading stable coin in circulation. The mission should be aligned with Maker’s Dai being the foundation for the open financial system providing industry leading rates in a faster, cheaper, and easier way. Key objectives/success criteria could include providing the best rates, low gas costs for loan issuance (L2), all while using a simple and elegant user interface making it fast and easy to use. I also believe to achieve this mission, we need to continue to foster the strongest Community, and ensure that our contributors making the Project better are well compensated so economic incentives are aligned. With recent stable coin legislation being proposed in the US, I also think we need to develop a thoughtful plan to operate in a regulatory compliant manner and partner with advocates that can support the vision for this Project and an open financial system.

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IMO, a functional definition of a bank is: “an economic entity which uses short-term debt (deposits) to finance long-term assets, with an equity risk cushion to ensure the solvency and liquidity of the short-term debt”.

Using this definition, Maker clearly is already a bank: DAI is short-term debt with instant liquidity, the collateral are long-term assets being financed by the DAI, and the MKR token value is the equity capital at risk.

Thus, I support leaning into the cryptobank narrative. Since Maker already is a bank, it should focus on that role intentionally and become a great one. :slight_smile:

I am very skeptical of this narrative. If we accept that Maker is a bank, and is thus doing risk-management of long-term assets so as to ensure DAI’s solvency… I don’t think it’s possible to automate risk management. Managing the risk of a long-term cryptoportfolio requires a ton of intelligence and nuance, and the only way we will get that intelligence and nuance is by having a team of well-incentivized, aligned, and capable humans. If we prioritize having small/no workforce, I think that we will have to accept doing a bad job of managing Maker’s risk… which is the single most important job for Maker.

Continuing the theme from above, I think this will be one of the most important tests for Maker (as for the DAO space generally). I want to note that SourceCred is actively focused on this question (how to sustain, nurture, and align a decentralized community). We don’t have all the answers yet, but we’re working hard on solutions. I hope that SourceCred can be an important part of the puzzle for Maker. I’d like to signal boost a thread by @prose11 on the SourceCred forums exploring the issues that currently block SC from playing a bigger role in Maker compensation.

I support this proposal. I think there’s a ton of value in a decentralized stablecoin that maintains dollar-collateral-backing but not a dollar price target. See thread I wrote on the subject. Note that if we keep running with the “Maker is already a bank” thesis, then we see that DAI basically represents deposits in the bank–and those deposits should be earning interest. If we depeg the price from USD, causing the price to gradually float upwards, that upward price drift would represent the interest earned by depositors to the bank. (Note that economically speaking, anyone holding DAI is providing the debt capital to finance collateral assets, and thus should be compensated, regardless of whether they take an additional step of depositing it into a smart contract. Having a consistently rising price would serve this function.)

I will also add my own proposal to this mix:

Fractalize MakerDAO

Currently, MakerDAO is a single DAO with a single pool of risk capital (MKR). However, it has a diverse set of risks in its portfolio (each collateral). The problem with pooling risks in this way is that it creates a tragedy of the commons. Any particular MKR token holder may be incentivized to approve a new, risky collateral, because that risk is socialized across all MKR token holders, but the holder may have a private gain from the new token (e.g. they are a big HODLer). The best example of this is a

A simple solution is to fractalize Maker, so that each class of collateral has its own pool of risk capital. Then, anyone who wants to advocate for a new collateral would have to put skin in the game, by actually funding the risk capital pool for that collateral. If no-one is willing to fund that pool, it would be a clear sign that the collateral is too risky.

From an implementation perspective, suppose that someone wants to add a new collateral type t into Maker. Rather than making the main Maker instance accept t as collateral, we would spin up a new instance, MakerDAO_t, which would have MKR_t as a risk equity pool and DAI_t as DAI backed by this particular collateral. The main Maker instance would then accept DAI_t as collateral, so long as the value of MKR_t is high enough to satisfy Maker governance’s assessment of the underlying risk in t.

A big advantage to this is that it would truly decentralize Maker’s governance. We would switch from having a single central governance process (through which every change to any risk parameter needs to go through) to a decentralized governance process. Each collateral-scoped DAO would be responsible for local governance around its own risk management, with the meta-DAO only needing to assess the reliability of the collateral-scoped DAO, rather than dive into the nuances of the asset. Also, if someone wanted to onboard a new collateral type, they could go out and raise that risk capital directly, rather than needing to lobby the core Maker protocol to approve all of the risk.

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Personally, I find most objectives very valuable. Actually. it’s hard to narrow them down to get the DAO focused :slightly_smiling_face:

But if I had to select my top three (of course biased):

  • RWA RWA RWA :slight_smile:
  • At least invest in “understanding” what it means to be a regulated Crypto Bank: what steps we need to get there, the expertise, the timeframes, the people/partners etc.
  • Invest in having world-class people (“Sustain workforce”) with polyvalent skillsets, paid well to keep building the best possible cornerstone of DeFi and CeFi

On top of others already mentioned I would add:

  • Foster “Internal Incubators”: encourage our world-class people to build things using our Credit System: what better way to harvest intelligence than to make your people use your product, love it and have “skin in the game” to improve it? (as old as Ford selling cars to his employees) Plus, with a truly global workforce, you could make Maker/DAI truly global.
  • Make Maker/DAI explainable to 5 year olds: With global communication, ideas spread fast. Simple ideas spread faster! If we want DAI in Latam, Africa and everywhere else, we should make it the most simple and powerful idea ever :rocket:
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If USD becomes a problem, can’t we peg to 1 DAI = 7.8 HKD? :sweat_smile:

I must say that those are great discussions and I want to thanks those taking the time to share here.

Like @williamr , I find it difficult to narrow and I get more ideas every day … but having an open discussion on those items is enjoyable and keeps the momentum.

Must say, I wasn’t expecting much support for EURO-DAI. So this is interesting.

Maybe we should start with the mission of Maker. The list is currently on 4 stereotypes and no one proposed something different (obviously there can be a whole array of flavors). If there is no addition in the following days, I will start a poll on that. This will give an overview of where the Maker community wants to go. Probably also a good idea to do it on-chain to see if it matches the MKR view.

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Nice initiative @SebVentures. I have not looked at it too closely though as I feel Maker needs to divorce the Foundation before we talk strategy. It will be hard to try to stake out a strategic direction when the bulk mass of voting power, financial resources and developers still resides with the Foundation. It will be like racing Le Mans with an unknown backseat driver controlling all the pedals.

Ok. I will do that. “Mission of Maker: Divorce the Foundation before 1 January 2023.”
After that is accomplished the discussion around the strategic direction will be more relevant.

I understand the view, but I’m not sure this is an inspiring mission.

The autonomy is effective since December 28th 2020 with the PSM executive. I’m quite sure the Foundation didn’t vote for this executive so this shows that the Foundation no longer controls MakerDAO destiny from a voting power point of view. When was the last time you heard of the Foundation? Last time I remember was in July (saying they will no longer work on the PSM).

We are generating $21M of yearly revenues which is probably more than the Foundation.

For the workforce, as we don’t know how to pay people yet, it’s difficult to hire people (maybe the ones from the Foundation). But this is a very minor detail. Because I’m quite interested to be paid, I will make a proposal soon (most likely this week) and a more serious MIP seems in process. Both Yearn, Yam and others have solved that in a matter of weeks.

Having a strategy is also a way to unite us and attract more people (and the workforce).

MKR holders are controlling the pedals. Like Le Mans, it’s an endurance race. But harder to win if you start 2 hours after everyone.

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There are some legal-related actions we should take/resolve. For instance, anybody working (at least from most European Countries) should invoice a legal entity. Legally speaking, you cannot work for a DAO because it is not a legal entity (let me know if I’m wrong here respect to others jurisdiction in Europe).

We should explore who will be receiving the invoices of our workforce. Right now any work done is being invoiced probably to the Maker Foundation.

In the same way that RWA lenders make contracts with a Trustee (a MakerDAO representative), similar structure should probably be explored for this, and which are the best jurisdictions for these entities to be registered on.

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Sure they can. They would do work, but they would not technically be employed. There AFAIK no invoices of any kind.

Maybe this applies to individual (though I’m not sure if individuals in Poland at least, you should emit a receipt at least, you should have a source of your income, and that source should be a legal person).

A company (and we expect that companies could work as well with MakerDAO) should send an invoice (at least in Poland).

What you could do is simply refer the MIP number to the bank statement. Sure accountant will be pissed as it does not fit into their software. Yes - your laywer will not be pleased as you have no legal protection. But hey - work is work.

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I have explored this issue a bit here discussing legal structures. I don’t fear too much about that. We will pay the PSM audit with the DAO. All those are technical issues.

Let’s solve the organizational issues and the rest will follow. The whole idea of having a workforce is for them to solve technical issues.

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