Maker Relay 06
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Whether you hold Maker (MKR) or DAI, own a vault, or want to get more involved in MakerDAO governance, this is your one-stop-shop for updates on the MakerDAO ecosystem.
There was a lot of executive activity last week to move the Dai peg back toward equilibrium.
Most recently, the Base Rate was reduced and DyDx was whitelisted on the ETHUSD Oracle
On Thursday, the Dai price was relieved when the debt ceilings were adjusted:
- ETH-A increased from 260 to 340 million
- USDC-A increased from 80 to 140 million
- USDC-B increased from 10 to 30 million
- W-BTC increased from 20 to 40 million
- BAT-A increased from 3 to 5 million
On Tuesday, the Monthly Governance bundle was ratified which included an increase the ETH-A Debt Ceiling from 220 to 260 million and the following proposals:
- MIP16: The Weekly Governance Cycle
- MIP18: Meta-Parameter Adjustments
- MIP19: Liquidations System 1.1 Upgrade
- MIP18c4-SP1: Subproposal for Modifying Meta-Parameter Adjustments
- MIP12c2-SP3: Domain Work Requirements for the Onboarding of MANA
Last Weeks’ Meta Parameter Polls
|Poll Name||Vote||Discussion||Results||Unique Voters|
|Base Rate Adjustment||Vote||-4%||23|
|Adjust the TUSD Debt Ceiling||Vote||Signal Request||Fail||18|
|Adjust the WBTC Debt Ceiling||Vote||Signal Request||Pass||19|
|Add dYdX on ETH/USD Oracle||Vote||MIP10c9-SP5 Proposal||Pass||15|
Closed Community Greenlight Polls
Community Greenlight Polls for new collateral closed on 2020/08/03 at 0400 UTC.
|Collateral||MIP9 Poll||MIP6 Application||Result||Unique Voters|
The Maker Improvement Proposal (MIPs) Framework provides a clear process for Maker governance to change the Protocol as needed.
This is Week 1 of the August governance cycle.
Proposals in the Request-For-Comments phase include:
- MIP20: Target Price Adjustment Module-(Vox)
- MIP17: Weekly Actual Debt Ceiling and Actual Risk Premium Adjustments
- MIP15: Dark Spell Mechanism
MIP14: Protocol Dai Transfer
- Could be championed by a new author from the community
- Updated by Akiva to include a Vault Holder Advocacy Group with the aim to provide more guidance and transparency, and the reassurance that the risk parameters will follow some established patters. Video here
Debt Ceiling Raises
Last week saw two Governance and Risk meetings (7/29/2020 & 7/30/2020) focusing on raising the debt ceiling and risks to the system.
Demand for Dai from yield farming is putting pressure on the Dai peg, which went down to 1.01 but currently hovers around 1.03. The debt ceiling was recently raised and its capacity was utilized in ~48 hours.
These raises create a significant amount of tail risk for MakerDAO with so much ETH and USDC collateral in the system. ETH creates liquidation issues in a market crash and USDC has some centralization concern.
MIP17 - Debt Ceiling and Risk Premium Adjustments
MIP17 Working Group Community Call Summary & Action Items from MIP Editor @charlesstlouis:
“MIP17 was initially rejected from July’s Governance Cycle due to both the solution’s timing and the lack of consensus towards it being the clear path forward for Debt Ceiling and Risk Premium Adjustments.”
The current plan is try and re-architect for two different MIPs: altering MIP17 for simple Debt Ceiling Adjustments and a future MIP for Risk Premium Adjustments.
Smart Contracts & Risk
Token Smart Contract Assessments
State of the Peg
As of 08/03/2020
- DAI sitting closer to 1.015
- Over the past week Dai supply has gone up approximately 100 million.
- Total Dai supply sitting at 378,527,154.
- Volume at around $148 million last week.
- Average VWAP price places Dai at $1.021
- Past 24 hour volume at $24 million
- 24 hour VWAP price at $1.015
- ETH vaults are fanning out into stronger collateralization ratios.
- The first significant liquidation wall is at $267 ETH, at writing that would coincide with a a 33% drop from current price.
- Another large liquidation wall at $239 ETH. A 40% drop would mean 106 million Dai being liquidated.
Articles and Thought Pieces
- MakerDAO section by Primož Kordež in Our Network: Issue #32
- State of the Dai Peg - DeFi Farming Impact
Videos and Podcasts
- Ethereum’s Bankless Bankers Panel with Rune Christensen
- DeFi x Gaming - Fireside chat with Aleksander from Axie Infinity and Gustav from MakerDAO
- Prophesying the Future of Oracles with Steven Becker
Maker Forum Deep Dai-ve
Peg Stability Mechanisms
MIP20 describes a Target Price Adjustment Module called Vox. Vox is an implementation of a TRFM that adjusts the target price of DAI according to a governance defined rate, allowing the institution of negative effective interest rates.
@equivrel notes that Kurt’s introduction doesn’t address the implication of changing the Target Price for monetary policy (from the current target of $1.00).
“How does MakerDao scale while also defending the Peg and restoring confidence in the system in a manner that is sustainable and limits exposure to collateral risk (mainly USDC is the current focus)?”
FourthStreet goes on to describe four major cons with current plans for the PSM to open discussion on how the issues might be mitigated.
- Peg Stabilization Modules: A Pre-MIP Discussion
- Forum Poll: Deciding the Peg Stabilization Modules Implementation Timeline
- Maker can have a monopoly power over stablecoins lending!
Meetings and Events
MakerDAO Open Calls
- Tuesdays at 16:00 UTC | Crowdcast
Community Collateral Onboarding
- Wednesdays at 17:50 UTC | Zoom - Message #governance-and-risk in Maker Chat for password
Governance & Risk
- Thursdays at 16:00 UTC | Zoom
- August 5 DeFi Conference 2020
- August 7 FriDAI Brunch #3 - UX and Design As Key Tools to Foster DeFi
- Aug 31 - Sept 5 DAO Rush Week
- July 8 - Sept 8 Matic Layer 2 Security Hackathon
- July 29 - Aug 19 Sia And Namebase Present: ‘Own The Internet’ Hackathon
- Aug 19 - Sept 30 Apollo
- Oct 2-20 - ETHOnline
Propose technical changes, poll, and vote in the Governance Portal
Learn more about the Maker protocol in our Documentation
Disclaimer: This update is assembled by a group of contributing members in the MakerDAO community. This does and should not serve as financial advice or an inducement to vote in any specific way. This update is purely for informative and for communications purposes only.