[📄] Know Your MIP KYM#02: MIP30: Farmable cUSDC Adapter (CropJoin) - Monday, December 7th 17:00 UTC

[juanjuan]

What

@equivrel will be explaining and going over the details of:

• https://forum.makerdao.com/t/mip30-farmable-cusdc-adapter-cropjoin/5163 (He said he won’t be bringing diagrams since @hexonaut didn’t!)

When

2020-12-07T17:00:00Z

Where

>>> This Zoom link <<<

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Do your homework, bring lots of questions and contrarian views and see you there!

attn: @amyjung; @blimpa; @charlesstlouis ; @LongForWisdom ; @ElProgreso ; @iammeeoh ; @MakerMan; @aaron_bartsch ; @mario ; @rain ; @alexis

[alexis]

First questions:

• What if compound changes the ratio coefficient?
• What if compound puts some vesting time to unlock comp? CF MIP from compound.
• Who is going to run the wind and unwind?
• What if the gas increase? Who is going to pay for the gas?
• How do you liquidate it?
• Risk increase with time as Compound token increase and usdc decrease. Do we apply the risk coefficient from Compound or uscd?
• To be honest I haven’t got exactly how it works, but Comp should increase while usdc should decrease as we pay for the borrowing and get comp in exchange.
• what happens when there is no usdc and only debt?
• The code is relatively complex and need external call, input and output. Am I right? Looks there is a nice attack surface using compound and the wind, unwind. I feel it is another type of beast than PSM or a join token. Who is going to audit it?

[blimpa]

Know Your Mip Summary - Episode #02

December 7th, 2020

Agenda

• 00:00: Intro with Juan Guillén
• 00:44: MIP30 with Lev (@equivrel) and Rain (@rain)
• 02:54: Q&A and Discussion about MIP30

Video

https://www.youtube.com/watch?v=o_PGILq2_ME

Introduction

Juan Guillén

Agenda and Preamble

00:00

• Welcome to another KYM Call. We’ll talk about MIP30, which is the farmable cUSDC Adapter (CropJoin)
• Discussions about MIPs happen in the Forum.

MIP30: Farmable cUSDC Adapter (CropJoin)

• MIP30: Farmable cUSDC Adapter (CropJoin)
• 00:44 - MIP30 with Lev and Rain

Discussion

• 09:39 - How do you make sure it’s generic and it’s not Comp-specific?
• 11:57 - You said that other protocols can use it, so I guess somebody like B.Protocol can easily use it by opening it up to USDC and having a simple way to get a USDC vault and B.Protocol users can get Comp rewards, right?
• 13:07 - Is there an additional benefit for the users? Because Comp gives you rewards both on the supply and the borrow side, so aren’t users basically exposing themselves to the risk of Comp but then only getting half compensated for the borrowing?
• 17:12 - I think the collateral factor is fixed data. If Compound changed this collateral factor, what happens with the contract?
• 18:50 - There’s a MIP or the Compound equivalent, and I’m not sure if it passed or not, but there was something about vesting and locking the distribution for one month or something like that. What happens in that case?
• 22:45 - We are very dependent on Compound’s behavior and changes – and this contract is not that flexible. And I also believe there’s a risk of wind and unwind. Who is going to run it?
• 25:22 - How do you get your money back under normal circumstances?
• 28:30 - I think that one of the main problems is that wind and unwind are public, basically
• 30:44 - How exactly are the payment distributions going to be done? Because I’ve got a small account with Comp and it’s like a dollar worth of Comp tokens, and so that’s not something that would be worthwhile for Maker to be sending out periodically, just with gas fees
• 32:57 - In the MIP30 application, you talked a little bit about the insolvency of Compound and the risk. Could you go over a scenario where that happened and how it would affect Maker?
• 37:10 - Basically, when you do Compound, you put USDC or DAI and you borrow more until a certain coefficient ratio, but when you maximize a certain level, you lost USDC or you lost DAI, but you get Comp, so you have a negative interest rate. There’s another problem here, I think, because if the vault is full, for example, your USDC will decrease, your coefficient will increase and your vault will get liquidated by Compound. So you need an active management of the vault
• 41:28 - How do you liquidate the vaults? Do you liquidate them based on the USDC, for example…?
• 43:23 - If we don’t liquidate it we’re going to get less USDC than what we have inside the world
• 47:05 - Would it be possible to get Gauntlet to run some scenarios?
• 52:22 - Did anyone from the Risk Team review this or is it in the plan, if they haven’t yet?
• 53:24 - So that we don’t lose money with this ratio, it needs to be quite high
• 55:35 - They had a problem with the liquidity on Curve. The problem is, if you can’t withdraw your position, you can end up in a bad situation
• 59:33 - The community seems to think that we have too much exposure to USDC and that this is basically allowing for a riskier version of USDC. Do we have a response to that in terms of why it’s still good to be implementing?
• 01:01:43 - Was it considered that we kind of introduced a circular dependency now between Compound and Dai? I mean, if Dai goes to zero, then the USDC will also likely go – maybe not to zero, but it will affect the Compound USDC price
• 01:03:49 - I’m not saying it’s a complete pyramid, just that it does introduce some circularity. I’m not an expert on emergency shutdown et cetera. Just wondering if it has any implications, though

Closing Comment

Juan Guillén

Outro

01:05:23

• Thank you, Lev and Rain, for this great presentation and the rest for joining me. It’s always great to have you. Tomorrow (12.09.2020) we have B.Protocol at 7:00 PM UTC. And this Wednesday 9th of December at 6:00 PM UTC we’ll have Melon Protocol. More information in the forum, as always, and let’s keep the discussion going over there.

Credits

• @blimpa produced this summary.

[Cryptouf]

Do you guys record those calls ?

[juanjuan]

Yes!
Check the comments for notes + video in this thread:

[📄] Know Your MIP KYM#01 (Pilot): Peg Stability Module - Friday, November 20 17:30 UTC

[KYM01 - PSM] Hey, all! I’m running this pilot to see how much the Community likes it. If we get over 82% on Rotten Tomatoes we might scale it to other MIPs. What @hexonaut will be explaining and going over the details of: MIP29 - Peg Stability Module Signal Request to accelerate the launch of the PSM (Pst. He promised to bring diagrams!) More info about the PSM: What?, So What?, Now What? PSM Solution Preventing the PSM from being gamed Peg Stabilization Modules: A Pre-MIP Discussion …

[Cryptouf]

thanks a lot

[juanjuan]

Starting soon!

[alexis]

idea:

• allow list for wind and unwind
• be able to change the max/min CF via governance.

[juanjuan]

Video is here (notes coming soon):

Know Your Mip KYM#02 : MIP30 Farmable cUSDC Adapter (CropJoin)

Thanks to everyone participating. I really enjoy the level on these calls.
@rain, @equivrel, @alexis, @prose11, Frank, and I’m probably forgetting a couple of names…