Initial Thoughts and Questions for Including Real World Assets in the Maker Protocol

@g_dip while working with originators that manage a portfolio of mortgages may make sense in the future, I think in the short term it may make more sense for Maker to work with RWA debt instruments that are highly commoditized and very well understood, such as US treasury bonds. This would just require a trustworthy tokenizer to tokenize the assets and then they could be supported using the existing Maker infrastructure with little to no changes.

Unlike with simple tokenized treasury bonds, it would require a lot of very careful work for Maker to work with an originator with a book of mortgages, and it would be much less transparent for DAI holders to know what assets their DAI is borrowed against. A more complex setup like this might be possible in the long term but I think there are several natural stepping stones before that point.

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The MAKER Protocol is a PLATFORM, which allows professionals to generate value from real world assets.

Assets can be everything. Air, water, fire, dreams, restricted assets, futures, whatever you like.

Vault and professional can be the same person or organization. Maker is a trust layer. It is not mandatory to enter a CDP. The NFT`s can also be traded on the open market.

MAKER Protocol handles only:

1. NFT Generator System,
2. ETH, DAI, USDC safety deposits from professional,
3. ETH collateral deposits,
4. NFT collateral deposits,
5. DAI generator,
6. Vault rating system for rebates and incentives,
7. Professional rating system for rebates and incentives,
8. Fee system.

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The problem is you need find someone who wants to borrow against these bonds. Of course you can tokenize treasury bonds but it’s a long way for crypto to be able to compete with the existing capital markets for such instruments. With the current DAI volatility who would want to deposit treasuries into MCD instead of just leveraging their position with their broker?

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But you could ask the same question about stablecoins such as TUSD, USDC, or TAUD. These products provide a lot of value for the maker platform even though there are ways of leveraging the equivalents in traditional markets as well.

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I’ll do some math for this thing. I think many things will be more obvious …

This is a tangent, but it would be cool to see the other currencies supported by Trust Token try to take on FOREX trading in a user friendly platform (where you could use Maker for leverage if governance on-boards them). It may not make sense for small traders, but at scale I think the only costs would be gas fees? If that’s the case, it would probably be pretty competitive.

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Yes, that’d be awesome. Nothing like that exists for forex in DeFi today. But we’d like to do it by partnering with Maker, DEXs, and other projects, rather than building it ourselves.

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I think this is a very interesting idea, but it would be possible to see some research? Forex trading is currently centralized and competitive, meaning slippages and spreads are quite low. It would be most interesting to see a breakdown of how a decentralized alternative would stack up against a conventional forex website with regards to cost.

There are several ways such a service could work: there could be a plain token vs token exchange, there could be a hedging service, it could be pvp or using defi curves etc etc. It is also of course the question if it is in the interest of Maker to have such a site, it would possibly be better if Maker did not own it.

A third alternative is of course to just ask Curve or some other team to just include the TrustTokens in their pools. It is after all not Maker’s task to do marketing for Trust Tokens…

Atm it seems like gas fees would eat alive all but the largest players. But I do like the idea.

@Planet_X we work with the folks at Curve.fi and are working with them to develop pools for other TrueCurrencies, we currently have several for TUSD.

I’m not proposing that Maker build out any special functionality specifically for forex- merely, for now, that Maker supports TrueAUD, TrueCAD, and TrueGBP. This’ll enable a bunch of new use-cases, especially when combined with the work we’re doing with Curve.fi and others.

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