Maker Governance Review - September 2021

Top Governance News

The month of September had no executive vote delays (thanks to delegates and voters!) and contained many updates for Governance. The DUX team released an updated version of the Governance Portal that includes additional features and matches information with the MCD Voting Tracker. Additionally, the DUX and Token Flow Insights teams have worked together to help redefine and further clarify the voting algorithm rules for determining each wallet’s correct MKR vote weight.

We are four months into delegation, and so far, there are seven public delegates and seven shadow delegates who collectively have been delegated over 74,000 MKR. Delegate profile details are now available on the MakerDAO delegate page! Additionally, the first Maker Debate Series call took place on September 14th, which focused on delegate compensation.

The Protocol Engineering Core Unit launched the long-awaited Dai Token Bridge on Arbitrum One. The bridge allows users to transfer Dai to and from the Arbitrum L2 network. Steps towards functional L2 governance controls are happening; September 24th’s executive vote included a number of L2 test actions. The actions test the configuration of L2 components, including the governance relay and L2 DAI. Once it is confirmed that Governance has control over all L2 systems, the Protocol Engineering Core Unit will manually deny its deployer addresses, meaning Governance will be the only authority retaining full control of the token bridges.

September’s ratification polls welcome four new Core Units: Collateral Engineering Services, Development & User Experience, StarkNet Engineering, and Strategic Happiness. As MakerDAO scales and the number of Core Units continues to grow, the GovComms and GovAlpha teams presented a new format for the Governance and Risk Calls to help redefine the purpose of the call. Beginning September 9th, the calls have followed the new format focusing on deeper discussions on high-priority issues and projects.

With MIP54: DssVest ratified on June 28th, the executive vote on September 3rd implemented the first DAI and MKR token streams to Core Units, detailed below. In addition, this executive vote distributed three one-time budgets to Core Units, also detailed below.

Since their launch, some collateral types have shown themselves to be unprofitable. This concern was addressed and, in response, has resulted in the successful offboarding of two unprofitable collateral types; KNC-A and USDT-A.

Finally, there were two community greenlight polls. Both passed, resulting in higher prioritization of the RARE (SuperRare) and RAI (Rai Reflex Index) Vault types.

Key Outcomes

Maker Improvement Proposals

The month of August contained eight ratification polls, which all passed:

Core Unit Budgets Distribution

The executive vote that passed on September 4th distributed three one-time budgets.

One-Time Budget Distribution:

Core Unit Distribution
Sustainable Ecosystem Scaling (SES-001) 155,237 DAI
DAI Foundation (DAIF-001) Reserves Backup 2 million DAI
DAI Foundation (DAIF-001) Operational 138,591 DAI
Total 2,293,828 DAI

DssVest Implementation and Initial Streams

DssVest was implemented, and the following token streams were established:

Core Unit Month DAI
Oracles (ORA-001) July 1, 2022 4,196,771 DAI
Protocol Engineering (PE-001) May 1, 2022 4,080,000 DAI
Risk (RISK-001) Core Unit September 1, 2022 2,184,000 DAI
Real-World Finance (RWF-001) Core Unit January 1, 2022 620,000 DAI
DAI Foundation (DAIF-001) September 1, 2022 492,971 DAI
Growth (GRO-001) November 1, 2021 300,050 DAI
GovAlpha (GOV-001) October 1, 2021 123,333 DAI
Governance Communications (COM-001) January 1, 2022 122,700 DAI
Content Production (MKT-001) November 1, 2021 103,134 DAI
Core Unit Period MKR
Protocol Engineering (PE-001) 2021 - 2025 13,930.00 MKR
Oracles (ORA-001) July 1, 2021 - July 1, 2022 1,051.25 MKR
Growth (GRO-001) July 1, 2021 - July 1, 2022 803.18 MKR

Layer 2 Test Actions

The executive vote on September 24th passed, and in effect, multiple Layer 2 test actions took place:

  • Test the configuration of L2 components, including governance relay and L2 Dai. Once confirmed that Governance has control over all L2 systems, the Protocol Engineering Core Unit will manually deny its deployer addresses.

Executive Spell L2 technical detail can be found here.

Parameter Changes & Vault Upgrades

Stability Fee Management

There were no proposed Stability Fee changes. Stability Fee parameters were well-positioned given September’s conditions.

View a detailed breakdown of the rate change proposal here published by the Parameter Proposal Group.

Debt Ceiling Management and Optimizations

The Debt Ceiling Instant Access Module (DC-IAM) was activated for PSM-PAX-A with the following parameters:

  • Maximum Debt Ceiling (line) was set to 500 million DAI.
    • PSM-PAX-A Debt Ceiling increased from 50 million DAI to 500 million DAI.
  • Target Available Debt (gap) was set to 50 million DAI.
  • Ceiling Increase Cooldown (ttl) was set to 24 hours.

PSM-USDC-A Target Available Debt (gap) was reduced from 1 billion DAI to 950 million DAI.

New Vaults and Other Facilities

GUNIV2DAIUSDC1-A Vault was onboarded with parameters detailed in the poll.

Paxos’s stablecoin (USDP) was onboarded through the PSM-PAX-A facility.

Offboarded Vaults

KNC-A Vault was offboarded through a 2-step process:

  • Immediately lowering the KNC-A liquidation penalty (chop) from 13% to 0% to avoid penalizing liquidated vaults.
  • Raising the KNC-A liquidation ratio (mat) from 175% to 5,000% over 60 days to liquidate the remaining KNC-A vaults.

USDT-A Vault was offboarded through a 2-step process:

  • Lowering the USDT-A Liquidation Penalty (chop) to 0% to avoid penalizing liquidated vaults.
  • Raising the USDT-A Liquidation Ratio from 150% to 300% to trigger liquidation of all remaining vaults.

Fee Changes

Flash Mint Fee (toll) decreased from 0.05% to 0%.

Community Greenlight Polls

Greenlight Polls allow MKR token holders to signal their preferences for collateral types proposed through Collateral Onboarding Applications. Community greenlight polls occur at fixed times each governance cycle, starting on the 1st and 3rd Mondays of the month and run for two full weeks.

The month of August had two Community Greenlight polls:

Asset Date Began Date Ended Voted Yes Voted No Voted Abstain
RARE (SuperRare) September 6 September 20 64,210.99 MKR (90.81%) 6,494.47 MKR (9.19%) 0.82 MKR (0.00%)
RAI (Rai Reflex Index) September 6 September 20 68,665.98 MKR (95.12%) 3,358.88 MKR (4.65%) 162.04 MKR (0.22%)

Check the progress of all proposed collateral types in the Collateral Status Index.

What’s Ahead?

Votes & Important Dates Calendar

Here are some things to look forward to for October:

The DUX team recently presented their updates and future work on Governance, Risk, and Core Unit Launch Pod Calls. Look out for many new updates and integrations on the Governance Voting Portal and Delegate sites.

Although the Dai Token Bridge allows users to trade, lend, provide liquidity, and yield farm with Dai on the Arbitrum L2 network, there is no support for Maker Vaults. The recently passed executive vote transferred sole-authority over token bridges to Governance, which will allow upgrading the Gateway to enable Vaults, fast withdrawal schemes, and DAI minted on L2.

In September, offboarding low-tier Vaults was a heavily discussed topic and is now coming into action with the most recent active poll to offboard USDT Collateral Types. Expect more low-tier Vaults to be on Governance poll for offboarding in response to this recent signal request.

Nexo Institutional Vault has received proposed risk parameters through risk evaluation; Look out for a poll launching the Nexo Institutional Vault with proposed parameters in the near future. Growth Core Unit has been working with legal and compliance teams to help find a solution to open Institutional Vaults with traditional companies interested in having liquidity from the Maker Protocol. They are pushing the Institutional Vaults initiative (for a product focused on crypto-institutions) in Europe.

The Maker Foundation notified the community that it would be discontinuing Rocket.Chat. The community discussed and decided Discord is to become the next primary channel of communication. GovAlpha, Content-Production, and Tech-Ops are collaborating on a proposed layout for the channel implementation. GovComms is collecting Discord handles and other associated account information from DAO members, stakeholders, and anyone who wants to be added to the Discord prior to launch. The current goal is for the new Discord to go live on Monday, October 18th, two weeks before the October 31 deadline for shutting down Rocket.Chat.

During September, delegate compensation parameters were discussed, and an Issue Discussion Call was held. In response, we have already seen one delegate propose a conditional one-time supplemental compensation. A MIP in RFC for delegate compensation has been submitted, which we can expect to stimulate further discussion around the topic.

Finally, the D3M is undergoing a final audit by the Risk Core Unit. Growth Core Unit is ready to launch D3M once the audit is complete, which tentatively looks to be mid-late October.

Resources

Public Google Calendar.
Bookmark or Subscribe to this calendar for Votes and Public Calls.

Forum and Maker Chat.
Discuss and debate MakerDAO.

Participation Tools.
Library of useful links for Stakeholders; Protocol analytics, Dai analytics, collateral & liquidation metrics, governance history, and auction data.

Governance Portal.
Voting dashboard for MKR voters.

Learning Portal | Technical Documentation Portal | MIPs Portal.
Learn more about the Maker protocol.

MIP51: Monthly Governance Cycle | MIP16: Weekly Governance Cycle.
Learn more about the Governance activities that occur during the Monthly and Weekly Governance Cycles.

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