[Informal Poll] Should we have a cooldown period before deciding how to spend the Foundation's MKR tokens?

The return of 84000 MKR to Governance is great news and has put us in a great financial position. Congratulations to us all and a massive thank you to the Foundation for making this possible.

Naturally, this spawned multiple discussions on whether certain ideas/MIPs/groups could be funded using this windfall. For example, here and here. There are also discussions from Black Thursday victims along these lines outside the forum. Not to call anyone out in particular (I had some ideas myself too so I can relate!) but it seems like being flush with cash can result in some sub-optimal spending decisions, even as a DAO.

When someone wins the lottery, it helps to not change much for a while to let the new reality sink in. Given that the protocol has no pressing financial needs, should there be some sort of cooldown period before formally initiating plans for how to allocate these funds? I am not specifying the length of time, nor am I specifying what “initiating plans” means. Obviously, discussions on the Forum will not be bound by this but perhaps on-chain polls/signal requests can be. In any case, I just want to get a feel for what people think before we put in specifics.

EDIT: Sorry for the incorrect formatting where the title of the poll has become an option. I assume those who voted for it are voting that it’s a reasonable question to ask :wink:

  • Should there be a cooldown period before deciding how to spend the MKR tokens from the Foundation
  • Yes
  • No
  • Abstain

0 voters

1 Like

I fully support a cooldown. Maybe 2 months? I think it’s fine for people to start putting together well-thought-out proposals though

3 Likes

This post frames MakerDAO as receiving a “windfall” and now “flush with cash”.

I disagree with that.

In my view, this event is nearly the same as if the foundation had burned the MKR.

MakerDAO can always print and sell new MKR for funding anyway.

So in my view, there really are no new funds to spend.

18 Likes

There are if we sell some of this MKR to finance expansion projects or pre-fund CU MKR compensations

Agreed. The PauseProxy has the authority to mint new tokens.

Burning now gets them out of the hot path of our weekly executives and more can always be minted later to pay contribs or do retroactive airdrops to vaultholders :wink: or whatever.

6 Likes

I also disagree and i think significant part of 84k should be burned. There is no realistic way that DAO can suddenly scale 100x and spend this wisely short term.

9 Likes

@PaperImperium,

How is that fundamentally different than if the foundation had burned the MKR, then MakerDAO acquired the same funds by taking them from the Stability Buffer (which ultimately leads to either minting new MKR or an equal amount of reduced buy-and-burn)?

It sounds like you’re suggesting they be burned mainly to supress the feeling of being flush with cash :slightly_smiling_face:

2 Likes

Just to ensure that this is well understood by all: this is an informal poll rather than a signal request. It will not lead to an on-chain poll and any outcome should not be considered binding.

10 Likes

Why are folks mesmerized with Burning the MKR that the Foundation held on to for years (with, or I should say on purpose/for a purpose)?? I don’t get it. What am I missing here?

Do Y’all think that burning 84K MKR is going to skyrocket the price of MKR to $100,000? Cause I’ll be honest, Crypto Markets don’t care about how many tokens are outstanding and earnings. They just don’t care.

4 Likes

For me it’s not about price appreciation (irrelevant) but more to do with taking it off the table for distraction and/or community mismanagement. As you can already tell, this event has stirred up a lot of conversation about what to do with the funds which could lead to drama down the line. We can always mint MKR at any time and if we’re planning on just sitting on this for a while before we make any decision then the simplest way to take it off the table is to just get rid of it. In this way we can mint for actual use purposes (Core Unit salaries/incentive programs) instead of trying to decide what to do with a predefined amount.

7 Likes
  • deflationary meme is powerful meme
  • I think market should get used that we will burn AND mint. We have no problems with both.
  • how does makerburn site calculate yield?
  • i would burn 50k, maybe 60k
5 Likes

There is a difference by removing share or putting share in treasury, in a normal market.
Mainly for law, regulating and administration issue I believe. Do that apply to us??? Well it should, at least at some point in time.

One of the main reason I believe you can’t mint as you wish in a regulated market is mainly for fraud. As you can keep for ever the company control by minting and redistributing the new share to yourself to stay over the 50%.

If we burn, if we were regulated, that means we would have to buy the new share or if we decide to mint we should, I believe, provide a fair way to let share holder buying the new mint to avoid forced dilution. That means time and a way to contact them.

Tho, I am not an expert on it and this is just my thought.
Also regulating is probably country depends too.

2 Likes

Looks like we are going to need some of the 84,000 MKR treasury to take on the large established players:

"Four sources with knowledge of the situation told The Block that PayPal has made the rounds among some of the industry’s stablecoin protocol developers — suggesting the payments giant may be leaning towards working with a third-party company.

Ava Labs, the team behind the Avalanche blockchain, is one of the organizations that has held talks with PayPal over stablecoin development, according to people familiar with the matter.

PayPal continues to explore the potential of digital currencies, digital financial services infrastructure and how we can help enhance digital commerce as a trusted partner in the space.”

Unless Y’all think that servicing the DeFi community is a good enough accomplishment and we are pretty much set and done…

1 Like

There’s already many millions of dai in the surplus buffer, so if there was no rush to spend those, then there should be no rush to spend the newly acquired MKR either.

If this MKR is spent badly, it will end up doing more harm than good for the project. At best it will unnecessarily dilute the amount of MKR in circulation (as others are pointing out, using the MKR is the same as printing new MKR). At worst it could create a culture of reckless spending that makes the DAO unable to operate sustainably in the long run, and could see cash grabs and extractive behaviour from opportunistic core units.

Now of course if someone has a good and effective idea that will provably help the project, that should always be considered. But like I said, we already have all the resources we need sitting in the surplus buffer, so getting funding to great ideas shouldn’t really change just because there’s now also a bunch of MKR sitting in the GSM.

4 Likes

Why would one want to “spend” an appreciating asset? If we are ever strapped for cash, shouldn’t we eat some of our dog food and potentially lock some of the 84k up somewhere for a stablecoin loan?

That raises the risk of a governance attack, probably by some multiple given the quantity in question.

2 Likes

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