[Discussion] EuroDAI

I shouldn’t have opened this door as it is complex as well and not really needed right now.

It was meant to improve the resilience of the protocol. The MKR would stay the master piece (the holding) and would initially own a 100% interest in the sub-protocols. But it would give the flexibility to sell some part of the business (or vest some token for employees). In case of big issue, it would be usdMKR or eurDAI that would be diluted and not MKR. That opens a lot of questions as well because you will not have the liquidity on those tokens.

Let’s focus on eurDAI and keep eurMKR for another time.


It really seems like there would be a way to do this without duplicating all of the governance and contracts. Could all vaults simply have an option to borrow assets other than just dai against them? This would create something that is generalizable to cross-collateral borrowing (similar to compound and aave), or additional currency pegged versions of dai by just adding them to the list of borrowable assets.

Rather than duplicating everything, each rate for borrowed assets against a vault could have an interest rate offset and possibly a CR offset vs usdDai(which would always be the reference asset).

This seems like a way better construction so vaults are not duplicated, and complexity remains manageable. There is also then no need to duplicate MKR tokens.


Looking at the proposal, it’s not about duplicating everything. MKR stays the same, oracles stays the same, the gov contract stays the same as well.

The core contract of Maker, the Vat uses one unit of account and I don’t see how to manage multiple units of accounts without changing the contract significantly.

On the other hand, you can deploy the existing code and call it eurDAI, it would work quite easily (assuming Oracle work). The core system doesn’t mind being pegged on USD, EUR, or anything else.

This way also provides an easy path to deploy on other EVM-compatible chains, like proposed for xDAI (but not 100% sure it’s a good path to duplicate the same currency this way).


Sometimes it is smart to try things. Just keep the risk accordingly low.

The caps could be much much lower.

Ethereum is for rich people ONLY.

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One social/legal consideration comes to mind - would there be any impact to DAI based on Eurozone e-money regulation? For example, if we onboard other centralized euro stablecoins that fall under e-money regulation, would EuroDAI be held to the same regulation? Perhaps in a post-foundation/decentralized world this is a non issue - maybe we could have a community legal team investigate to provide guidance…


Yes, as already suggested by @Andy_McCall (link) MakerDAO definitely needs a Legal Core Unit team to assist on these types of steps!

This said, I think the basic approach

makes a lot of sense and I think it would be awesome if we could see a small and dedicated Core Unit try to turn this into a MVP.


This is done by asking the ECB for an assurance. This is the only way to be certain of the legal outcome. The assurance application must be drawn up by a lawyer (or a person who knows a thing or two).


Would love to see an EuroDAI come to life. We’re about to launch an xdai-like L1 with an EUR native token (ARTIS 2.0). So far the best candidate for that seemed the Synthetix sEUR, but we’d likely prefer an EuroDAI if it existed by then.


The Smart Contracts team has enough work on our plate to keep us busy for the next year at the very least.

Currently we’ve got Liquidations 2.0 work, MIP21 & MIP22 work, DssGov work, and the keg, the vox, the flash, and the cropjoin have all been approved, plus everything else in the MIP backlog, and we’re going to need to find some time for scaling research as well. In order to pull this off you’d want signoff from smart contracts and we don’t have the bandwidth for this. Weekly spellcrafting and tooling around that process already takes a significant amount of our time, and adding an entirely new system to our monitoring, maintenance, and manipulation workflow means that little else will get done at all.

Governance has had it’s work cut out maintaining demand around the USD peg, these problems will be compounded by adding another base accounting module and collateral risk exposure. Does governance really want to manage a separate system and peg in a climate where it can barely get the votes to pass an executive as-is? And where the gas costs on the network prohibit casual use anyways?

The MCD system is open-source and it’s within the crypto spirit to copy and rename this, but the core team just doesn’t have the bandwith to assist, as such, I’d recommend that MKR holders absolutely not give MKR minting authority to backstop a secondary system at this time.

Ideas are easy and we have plenty of them. Prioritizing the resources we currently have is the problem here. It’s so easy to vote “YES” on a proposal, but that yes vote has consequences as it throws more work on us that we then have to prioritize and implement. Throwing community devs onto projects to skirt the core team’s bandwidth limitations only increases the pressure on us since we’re going to end up reviewing code anyways, the net result being that you’ll end up with fewer resources than you began with. We’d much rather those devs work with us to help process our existing priority queue.

IMO we need to focus on making our core protocol and offerings more robust and secure, and training up a large enough team to safely and securely manage the system. Maker’s value proposition right now is that people feel safe in our smart contracts, and compromising that security by stretching too thin will ultimately erode Maker’s top position.


What are the Smart Contracts Team doing in order to recruit more devs? I assume you are doing everything you can, but maybe just spend 2m on the community call telling the rest of us plebs about it?


I can say we’re interviewing candidates now, but we have also left room open in the yet-to-be-proposed domain budget for team growth as well as enough budget to attract and retain talent.


This is exactly the proposal (and why I even suggested that eurMKR might be a solution at some point in the future).

Some people see eurDAI as a great opportunity for MakerDAO where we can take the first place (smaller market but bigger market share). At the same time, it will not be the priority for the SC Core Unit neither in 2021 and probably not in 2022 (I’m sure you have plenty of ideas to make usdDAI even more successful). The SC is only one part, DAI had a whole foundation behind it that made it a success. Just setting up the right team and launching a beta will take the rest of the year. It might fail for plenty of reasons not related to smart contracts. I feel it will always be a bad idea to put core SC resources on such a venture. So let’s wait for success before investing scarce resources.

This is also a perfect example of where we can achieve decentralization, agility, and resiliency.

Ideas are easy for sure, and, at this stage, it’s only an idea. But some people are willing to put in the work to see the idea grow. Now the question is: should we kill this idea or not? It is my understanding that any domain team can veto it, if not, then we can move to the Declaration of Intent.


I had two of my polyglot developer friends for a virtual fireplace-chat with me last night, euroDAI was the topic. I can say I got them hooked on the idea to work on that topic.


Sad to read this, I can share that eurDAI is a common topic and something long awaited by the Europeans communities.

We will surely see a custodian and centralized EUR stablecoin take off this year but MakerDAO is the only trustless decentralized minter we have in this ecosystem.

I can safely say that a potential eurDAI will absorb all my current DAI holdings as being exposed to FX risk makes the whole value proposition of stablecoins less attractive.


I think you misunderstood, the pressures were on you guys even before, it was just one step away and you just didn’t hear it. But on the other side there was an expectation that you guys should write all these MIPs. It is may be my feeling but mainly all ideas are nearly in MIPs now and the forum calms down now.


haha, I would not bet on that. I go long on new MIPs x10 :wink:

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I think it is totally reasonable to push back from the existing SC-teams. It is about priorities and opportunity costs. The engineering crew we have are probably the best ones to put on the core of the system. euroDai is an opportunity to get another crew on board (that will for sure need some help from the core team).

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fully agree and I am glad they speak out.


I love this proposal this also opens up later for the DAO to vote in even more stable assets? Or any assets that they want to include under the MKR governance … I do would like to point out that with more load on governance a governance incentive would be on point.


Yeah this could become a full time job just to stay up to date for all of governance.

Delegation of voting power could help give rise to a new professional class- ATTRACTING NEW TALENT!

Not even all of the whales have the time or qualification to stay up to date for governance.