Maker Relay Ep 61

Hi everyone, thanks for checking out Maker Relay! Whether you hold MKR or DAI, own a vault, or want to get more involved in governance, this is your one-stop-shop for MakerDAO updates.

:tea: Current Events

:ballot_box: This Week in Governance

:diving_mask: Community Deep Dai-ve

:clipboard: Team Updates

:calendar: Mark your Calendar

:anchor: Useful Links

:studio_microphone: Have Feedback?

:tea: Current Events

MakerDAO Approves Loan to Solar Farm in Long Island, NY

The August 30th poll to add RWA007 (SolarX) as a new RWA Vault Type passed. MakerDAO has taken another step towards providing UPRETS the ability to deposit newly originated industrial real estate-backed loans to MakerDAO by supplying 21,000,000 DAI to fund a solar farm in Long Island, NY.

Maker Foundation Shutting Down Rocket Chat

The Maker Foundation announced it will be shutting down MakerDAO’s Rocket Chat channel on October 31st, 2021. Legal obligations prevent the Foundation from passing the channel to the community; in the meantime, community members are investigating alternative solutions.

Launch of Token Flow Insights SA

Token Flow has been incorporated and launched, based in Switzerland. The team has worked with MakerDAO on Oasis and Data Services teams of the Maker Foundation. They deliver products such as MCD Vaults Tracker and MCD Voting Tracker, which are protocol-specific datasets and tools. They also offer an open-source Ethereum transaction decoder, EthTx.

State of DAI

  • DAI peg solid over the past week, again, trading just above peg with the average settled price of 1.0022 over the week.

  • So close to 13 billion in TVL. ETH is growing in the share of DAI generated.

  • DAI mint and burns over the week.

  • Diving in, the numbers are $35 million net.

  • Volume is around $564 million this last week, according to Messari.
  • Nomics continues to include DODO on their charts, and there it says volume is 2.5 billion. It’s unclear how reliable that volume is.

  • Polygon still dwarfs everyone as the L2 for DAI, but Fantom from Andrej and squad is climbing this past week.

  • Here’s an overview of Fantom’s growth

  • PSM USDC 3.35 billion
  • ETH-A 1.766 billion
  • ETH-C 283.6 million
  • WBTC 283.2 million
  • USDC-A 238 million
  • ETH-B 82.85 million
  • UniV2DaiUSDC 53.4 million
  • PSM PAX-A 49 million
  • PAX 49 million
  • LINK 43 million
  • UniV2DaiEth 28.09 million
  • TUSD 26.6 million
  • YFI 19.7 million
  • UNI 12.88 million
  • UniV2UniEth 10.52 million
  • UniV2WBTCEth 10.31 million
  • NSDROP 7.35 million
  • UniV2UsdcEth 5.61 million
  • MANA 4.98 million
  • renBTC 3.97 million
  • ZRX 2.99 million
  • BAT 2.42 million
  • AAVE 1.62 million
  • Other vaults below 500K (LRC, BAL, UniV2LINKETH UniV2AAVEETH, UniV2WbtcDai, COMP) at 887K.

  • ETH-A collateralization highest bucket is at 160%. Riding close to the margin there, it’s likely why liquidation walls seem threatening.
  • A quick shout out to the risk team for the Blockanalytica release. It’s beautiful!

  • ETH-B is at 140%. Same trend.

  • Someone in Decentraland is doing well; total debt outstanding grew from $2.5 to $4.9 million

ZRX grows to DC

  • ZRX has seen two 500K additions in the past two weeks plus one more 300k addition in the past few days.

Drop amounts

  • We already had one dip today (it’s trending on Twitter), please no more.

  • Liquidation Walls steep at a 9% market drop. Stay frosty folks, just because everyone learned how to use Etherscan to mint LOOT bags doesn’t mean that the market won’t be cruel.

  • The wBTC vault type has seen recent growth.
  • Average collateralization ratio is 269% indicating an appetite for leverage
  • 7 million at risk in that hypothetical 10% drop.

  • Vault creation on the rise over the last week.

  • Oh, did you need etherscan for DAI-related transaction info? Look-no-mo’ fam because @risk has you covered.

  • Locked ETH over time appears to reinforce @paperimperiums point that we need to grow our market share.

daistats.com | makerburn.com | maker.blockanalitica.com

:ballot_box: This Week in Governance

MIPs

Weekly MIPs Update #52

The first Monday of the month is here, and the Formal Submission Window for September is now open. The following proposals are eligible to make it into this month’s Governance Cycle.

Active Executive Votes

Parameter Changes, September Core Unit Budgets, DssVest Streams - September 3, 2021
If this executive proposal passes, the following changes and additions will occur within the Maker Protocol:

  • The Flash Mint Fee will be decreased from 0.05% to 0%.
  • The PSM-PAX-A Debt Ceiling will be increased from 50 million DAI to 500 million DAI.
  • 2 million DAI will be distributed to the DAI Foundation Reserves Backup Wallet.
  • 138,591 DAI will be distributed to the DAI Foundation Operational Wallet.
  • 155,237 DAI will be distributed to the Sustainable Ecosystem Scaling Auditors’ Wallet.
  • DssVest will be implemented, establishing both budget and MKR vesting agreement streams listed in the Proposal Details section.

Active Governance Polls

There are no active governance polls at this time, but there are greenlight polls.

Community Greenlight Polls

Collateral Vote MIP6 Application
RARE (SuperRare) Vote Application
RAI (Rai Reflex Index) Vote Application

Check out an 'at-a-glance view of the current Vault types and their parameters on MakerBurn

Active Signal Requests

Offboard KNC Legacy Token - Following community support and discussion, @monet-supply signals to offboard the KNC-A vault type with the parameter changes outlined in the post.

Nexo Institutional Vault - Following many discussions around Institutional and Long-Term Vaults and their financial implication, @Nadia is signaling by asking the community by asking whether we should launch the Nexo Institutional Vault.

Activate DC-IAM for PSM-PAX-A and adjust DC-IAM gap parameter for PSM-USDC-A - PSM-PAX debt ceiling increased to 500M, but currently does not have the Debt Ceiling Instant Access Module activated. In order to maintain a healthy DC-IAM gap that includes PSM-PAX, @rema proposes to adjust the DC-IAM gap parameter for PSM-USDC-A.

Adjust the Surplus Buffer (September 2021) - @ultraschuppi is signaling to adjust the Surplus Buffer to prevent it from filling up in the case Liquidations Penalties collected during a significant market drop.

Last Week

Vault Onboarding, 6s Updates, and Reducing Vault Liquidation Ratios - August 20, 2021
This executive proposal passed, and the following changes occurred:

  • Debt Ceiling for 6s Capital (RWA-001) will be increased from 1,000 DAI to 15 million DAI and the Broker-Dealer address updated.
  • MATIC (Polygon) will be onboarded as the vault type MATIC-A with the following parameters detailed in this poll.
  • PSM-USDC-A Fee-In (tin) will be increased from 0.1% to 0.2%.
  • PAX Peg Stability Module will be onboarded as the vault type PSM-PAX-A with the following parameters:
    • Fee In (tin): 0.1%.
    • Fee Out (tout): 0%.
    • Debt Ceiling (line): 50 million DAI.
  • The following Liquidation Ratios were decreased:
VAULT TYPE CURRENT LR PROPOSED LR LR DIFFERENCE
ETH-A 150% 145% -5%
WBTC-A 150% 145% -5%
ETH-C 175% 170% -5%
UNIV2DAIETH-A 125% 120% -5%
UNIV2WBTCETH-A 150% 145% -5%
UNIV2UNIETH-A 165% 160% -5%
UNIV2USDCETH-A 125% 120% -5%
UNIV2WBTCDAI-A 125% 120% -5%
YFI-A 175% 165% -10%
LINK-A 175% 165% -10%
RENBTC-A 175% 165% -10%
UNI-A 175% 165% -10%
AAVE-A 175% 165% -10%
BAL-A 175% 165% -10%
COMP-A 175% 165% -10%

:diving_mask: Community Deep Dai-ve

Tweet of the Week

https://twitter.com/smsunarto/status/1432796423016255491 +3

Forum Insight

Check out the latest Forum at a Glance

Articles

Risk and Regulation in DeFi

  • King & Spalding briefly explore the risks of DeFi as it grows and, in turn, draws increasing scrutiny from regulators. The article explores an array of risks; technological, asset, and compliance. It also covers SCC and CFTC guidance.

:clipboard: Team Updates

GovAlpha

GovAlpha Weekly Update

  • Onboarding has been going particularly well this past week.
  • Got a new member, @TheExistence, who started doing some work for us.
  • @LongForWisdom is exploring how Core Units can better understand Project Priority from voters/the community at large.

Protocol Engineering

  • Layer 2:
    • Arbitrum’s Layer 2 launched.
    • We’re running a final audit and should have the DAI Gateway launched within a few weeks.
    • Reason: it’s a custom gateway that allows us to have fungible DAI.
    • Met with Optimism Team.
    • They are planning an upgrade in October, making deployments feel very much like L1.
    • Keeping regular Sync with Proposed StarkNet Team.
    • Check out their Pod session this week; I also had Bartek give a good discussion on some of the potential relations with the PE team.
    • Synch with Oracles to discuss opportunities for sending messages over to L2.
    • Message passing infrastructure - requirements documentation.
  • Wrapped up several FV tasks - using Certora:
    • L2 DAI - writing specs, the inclusion of the permit function.
    • DssVest - FV and fuzzing (automated software testing technique).
  • Other work this week:
    • Adding MATIC support to the auction keeper.
    • Goerli Deployment work - All complete except for Centrifuge RWAs (sharing goETH).
    • GUNI - we completed the internal team audit and have ABDK doing an audit later this month.
  • Ongoing Audits:
    • B.Protocol auditing DssCharter to support institutional vaults.

Oracles

  • Continuing development for stETH, which should be complete within the next few weeks.
  • Thinking about long-term roadmap planning; looking at bridge alignment and overlap of needs for products and services.
    • Want to develop the Fast Withdrawal Bridge for Optimism first before applying it to other areas.
    • Want to create a standardized interface for cross-chain communication.
    • This is all still early and under initial research for ideas.
  • Hired a design firm to generate logos, typography, and more.
  • Discussed with TechOps to continue infrastructure monitoring for us.
  • Entity formation underway; will complete setup within the next two weeks.
    • Making progress on finding a banking partner - may take a few months.

Risk

Risk Core Unit Month in Review: August 2021

  • New Dashboards and planned features.
  • KNC-A offboarding parameters posted. Other collateral will follow next with similar steps or parameter adjustments proposed to offboard them.
  • Still working on the Nexo Institutional Vault risk assessment; in the meantime, waiting for the poll’s outcome to confirm or adjust loan terms.
    • Evaluation is 80% complete and adding few new sections.
    • Still thinking about auction parameters for this kind of vault and thinking of limiting auction throughout because of the size of the loan and at the same time increasing liquidation penalty.
    • Evaluating DssCharter implementation - might have some risks if the borrower doesn’t know how to use flash loans or doesn’t have external capital available to perform top-ups or repays.
  • PSM-PAX-A evaluating proper DC IAM parameters, which are currently disabled. We could decrease gap PSM USDC-A and at the same time increase it for PAX - that will lower tail risks of particular stablecoin failure, plus diversification benefits.
  • Looking into stETH/ETH Curve pool as next collateral evaluation.

Growth

Growth CU Weekly Update

  • Posted a signal request for launching the Nexo Institutional Vault.
  • Nexo posted a financial analysis of these kinds of Vaults.
  • Speaking with institutions who know how to handle and protect their positions.
  • Suggest that we should not offboard Loopring, BAT, and MANA tokens. They are interested in using the Maker Protocol
    • Loopring and MANA opened positions in Maker Protocol.
    • Discussing with them to continue using these vaults.
  • Strategy for Maker Growth:
    • Thinking about how to involve DAI in NFT and Metaverse solutions appearing.
    • Working with various artists and popular gaming tournaments to implement DAI.
    • Continuing strategy with Metaverse working on NFTs.
  • PAXOS team began using the PSM and are interested in increasing the DC.

Content Production

Content Production Bi-Weekly Update

  • New six-month budget.
  • Engaging with a lawyer to better understand our communication boundaries.
  • Hosted AMAs with Planet_X and Nadia.
  • Updated Maker Relay videos by replacing Current Events with Forum at a Glance
  • Syndicating Maker Relay updates with Substack.
  • Posted update on brand research that was conducted. Results show that people focus on the value of the community. Feedback on this would be appreciated.
  • Alec has been working on a dashboard that tracks MakerDAO metrics and beginning production on another to help consolidate Dai on Different Networks.

Governance Communications

GovComms Bi-Weekly Update

  • We received Dai, setup with AccountAble is in progress.
  • Our accounting actuals will begin getting posted starting the first week of October.
  • Summary Team now has coverage of every public call except CU Tools & CU Rituals.
  • Hunt for an Engagement Lead continues.
  • We started an internal people list, with a public version of this resource planned for the future.
  • We cleaned up the old Emergency Communications Process document and formulated a plan for this document. The plan is to make this into an all-encompassing Emergency Playbook that contains information on Emergency types, MakerDAO’s threat monitoring practices, the various coordination tracks(and associated processes.)
  • What began as a Team update audit has expanded into a general “information output” audit. We are continuing work on this, expecting to have a complete set of information by the end of the month.
  • Forum at a Glance now has a project overview document. You can also find the F-a-a-G presentation that Artem does on Youtube, thanks to Content Production!
  • The Monthly Governance Review now also has a project overview document
  • Our office hours are set to Fridays 1800-1830 UTC and are available on the public calendar.

Sustainable Ecosystem Scaling

SES Public Drive

  • Project X-Ray:
    • Presentation of Preliminary Findings by @lenka & @jordanj found in the SES Public Drive
    • Help wanted with Qualitative Research by filling out this form.
  • Project Legal Framework:
  • Past Calls:
  • Upcoming Calls:
    • CULPS: Strategic Happiness with @burban on 08.09.
    • CUT: Ethereum Naming Service with @makoto on 10.09.
    • CULPS: DUX Core Unit with @dux-team on 15.09.

Real-World Finance

RWF Monthly Core Unit Report

  • SolarX was approved by Governance.
    • Working on setting up the Cayman Foundation and the deal documentation.
  • On-chain securitization roadmap:
    • Had our first call between Shearman & Sterling and Manatt.
  • Growing the team:
    • New full-time recruit should join us next week. Keeping the Core Unit small; less than 7 FTE.
    • RWA reporting will be done by William going forward.

:calendar: Meetings and Events

Last Week’s Call Recordings

This Week’s Calls

  • Core Unit Launch Pod Session #16: Strategic Happiness Core Unit

  • Ask MakerDAO #8: A Technical Dive Into Centrifuge and Tinlake With Lea, Lucas, and Martin

Governance & Risk

Core Unit Office Hours

  • Join Link | GovAlpha - Mondays 17:00 UTC
  • Join Link | Protocol Engineering - Tuesdays 15:00 UTC
  • Join Link | Content Production - Wednesdays 16:00 UTC
  • Join Link | Growth - Wednesdays 17:00 UTC
  • Join Link | Sustainable Ecosystem Scaling - Tuesdays 15:30 UTC
  • Join Link | Governance Communications - Fridays 18:00 UTC

:anchor: Useful Links

Forum and Maker Chat
Discuss and debate MakerDAO.

Public Calander
Subscribe for all public calls, votes, and other reminders.

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

Governance Portal
Voting dashboard for MKR voters.

MIPs Portal
MIPs Dashboard for everyone.

Learning Portal and Technical Documentation Portal
Learn more about the Maker protocol.

:studio_microphone: Have Feedback?

We value your input! Take our survey to let us know what we might be missing or how to do better.

Disclaimer: This update is assembled by a group of contributing members in the MakerDAO community. This does not serve as financial advice or an inducement to vote in any specific way. This update is purely for information and communication purposes only.

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The Votes and Polls visual version is now available on the MakerDAO Youtube channel:

The State of DAI visual version is now available on the MakerDAO Youtube channel:

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