[Informal Poll] Prioritize D3M Rollout to Compound

With the successful rollout of D3M to Aave, I want to gauge the sentiment of the community to make it a priority to extend this to Compound.

Pros:
-Diversified revenue
-Diversified credit risk from PSMs and Aave
-Timely inclusion of Compound does not make it appear Maker favors Aave

Cons:
-Credit exposure to Compound and its smart contracts
-Increases complexity of managing the D3M program with more than one qualified market

If Yes outnumbers No, an on-chain poll will be presented to vote upon prioritization of adding Compound to D3M.

Poll will run for 7 days.

Should Integrating Compound Into D3M Be Prioritized?
  • Yes
  • No
  • Abstain

0 voters

3 Likes

@PaperImperium please follow the signal guidelines when you create these. Going to mark this as an informal poll, if you want to redo it feel free to delete this and create a new thread. Immediately obvious issues:

  • Polling is not limited to TL2
  • Using the close timer is not recommended.
2 Likes

One of my biggest issues here is scale.

We are still stuck a bit on whether to increase the AAVE D3M DC - your own comments @PaperImperium expressing concern with respect to multiple risks. We also are in effect minting unbacked DAI to do this vs. using DAI from SB to do it.

I think when we are looking at proposals we need to be mindful before we start something whether we fully intend to scale it to make it profitable to the protocol… I really want to make sure whatever we roll out has a ROI to cost to implement that is > 100% at the DC we intend to target. Or that there is some return component that offsets the costs involved.

For the above reasons I abstained because it is not clear to me we are going to easily get past the risk components here and I am loath to run headlong into another project that will have a cost that we are not going to scale to get a return.

2 Likes

I mean this is literally the great strategic advantage of MakerDAO. We can print DAI.

This is a tool that we should use carefully, very carefully, but we should not be afraid of using in the right way. It is what makes us different from all other lending platforms (including Aave, Compound, …)

It’s not unbacked DAI. It is backed by aDAI, which is a promise to be repaid by Aave. This is a risky asset, sure. How risky, that’s for the Risk team(s) to assess. But it’s not unbacked DAI.

Maker vaults and economics depend on a token deposited that has an oracle price such that the position is overcollateralized. With the PSM we basically take on the idea that assets can price 1:1 and in fact in the protocol actually set this value to 1. Should USDC, or aDAI or USDP for any reason trade significantly off 1 presents itself a significant protocol loss hazard and something we have to be very mindful of when adding more of these.

USDP, USDC at this point is fully 100% liquid on our books (yes I know there behind the scenes is discussion about putting this to work) aDAI may not end up fully liquid for some reason, but if we believe AAVE mechanics the return on aDAI will go through the roof if it isn’t liquid.

Personally I think there is some use here, but this isn’t without risk, particularly liquidity risk.

2 Likes

Of course, there is. :+1:
But it can be evaluated and compensated by appropriate gains, as everything else.

My main point in answering to you was basically to avoid spreading the potentially dangerous narrative that “we are printing unbacked DAI”.

1 Like

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