Maker Vault Compensation Updates and Status

I forgot about this thread. Life got in the way. I thought it fizzled out.

@MakerMan @monet-supply
It’s good to hear that something is coming together for a compensation plan.

I don’t know the plan’s details, but it seems like it’s near done. I would have considered allocating a portion of future SF revenue for compensation. Maybe other ways are better? No idea.

Years down the road, I think the Black Thursday event will ultimately be an event we can proudly point to as a show of strength. It’s in our history, it happened, and it shows that incentives within MakerDAO are properly aligned.
Poor governance -> Governors foot the bill

There’s something important to consider with regards to compensation though. There may be great arguments for not compensating. It was the risk they took. They knew going in. Sucks to suck.

It does suck to suck though… I’m sure a lot of people are salty about what happened. I would be. When we try pointing to this event, what’s stopping them from producing counter critiques?

It doesn’t cost us that much to do right by them. It can be a one-time pass, like the DAO hack. There weren’t any more ETH forks.

What do we gain though? We have that many fewer people (rightfully?) upset with us. I think it will be a good look for Maker to eat this.

We vote on it like any other poll!


Thanks for the plug :slight_smile:

I’ll be adding liquidation auction info soon if that helps you. This will include collateral liquidated, collateral sold, tab amount, amount recovered and net revenue / losses. Happy to add any additional stats that may be relevant too.

Can’t really give a timeline as I’m blocked on something out of my control at the moment, but we are getting close.


You know honestly if governance goes for a plan that has a price tag literally instead of selling MKR governance could approve a new DSR deposit facility that has a fixed term and pays a fixed rate of interest to cover it. Then just build something like a secondary surplus out of the primary one (instead of buying bakc MKR) to pay back the bond holders at term with the accumulated SF or MKR flop then to make up the difference.

Setting the rate and seeing if enough DAI depositors would buy would be interesting.

Right now interest on a 4% 1 yr 2.5M DAI bond (100K DAI interest here if I have my math right) could be covered by the current surplus vs. selling MKR. Would people deposit DAI to earn 4% if they had to lock it for a year? Is this a good thing to do? Realize since this bond is basically going to pay out on a compensation plan it effectively only sops up liquidity temporairly. Do MKR holders benefit here by not having to deal with further dilution?

I think in time debates will grow on creating a secondary surplus operational account that also serves as a warchest with either stablecoin assets, or better assets anticorrelated with markets.


A whole ton of stuff I had Twicky add.

block on the kick/tend, block on dent, block on deal. number of unique bidders, number of bids, tx costs for the winner and everyone else. Pull the uniswap and OSM price feeds at the time of all of these events. :wink:

Just a few things I had in my list @hexonaut But I am looking at more general vault analytics - not just the liquidations. Perhaps as you get things together I might take what you have at the time and do a mock up of what I would like to see and feed it back to you and your team. :smiley:

Literally we don’t want to just see the live data, we want to see ALL the analytics presented as a time sequence so we can track ‘changes’ not just see the state of the system generally at the time we look.

In principle since this all lives on-chain in a linear fashion one could just allow the user to put in a block or time and see ‘the state of the analytics’. If you allowed a user to download a snapshot of whatever they were looking at then it would be easy to fish out changes and to do analytic checkpoints one could make time graphs of. One thing I have always wanted to see was either @cyrus or @vishesh vault liquidation state 2d graphs % liquidated at collateral price against collateral value and to watch this change over time with the price of the collateral (ETH in the case I am thinking).

I liken this to another idea I had of looking at bid/ask in an exchange and when the price moves (up or down) due to a large buy or sell checking how well the book say 1hr to 5min previous was an accurate representation of market depth. Same thing is true of ETH vaults liquidation points and how much DAI was actually burned vs. what we expected would be burned in the case of a collateral price down turn.

1 Like

20200619_1107EST Update

The Compensation group is just about done with the Compensation Plan document. The goal is to post the Compensation Plan document in its own forum thread by Monday for review and comment by the community before formal presentation during Thursday CC 6/25/2020 by @monet-supply and @MakerMan


20200619_2300 EST Update

The Compensation Plan has been posted for community review here.

  • Based on initial analysis, it looks like the Black Thursday period (3/12/2020 12:00 to 3/13/2020 13:40, ETH auctions 763-4324) covers the vast majority of users who lost funds, and covers substantially all of the zero bid auctions as well as the worst of the Black Thursday price falls and gas spikes

my vault is 392(not in range) should i hope for something?

I need to double check, but it looks like your vault was liquidated at 3/13/20 0:02 UTC, so you would be within the time range

Numbers you were referencing (763-4324) refer to auction numbers rather than vault numbers

1 Like

392 you are in the BT class with auctions 3180, 3181, 3182 109ETH auctioned for 0 ETH returned.

I will remind people just look at and then drill down into the liquidation history if you are in the 763-4324 range of auctions (liquidations via you are already in the class. Governance will decide the conditions for who gets how much compensation.

Thank you for that .

Any updates? what is happening?

Just wanted to say, you guys are doing an awesome job! @MakerMan If you say governance decides the amount of compensation, does that entail a manual process?
Also can I imagine the process of returning the collateral just as a normal ETH transaction back to the address I had the vault with?

The image is from the Maker Relay 1 post on this forum

@W34Z3L govenance will vote on the details of the process. I am not sure what you mean by a manual process. From the governance side or from the vault owner side?

In terms of what this looks like from a vault owner perspective. The compensation group felt it was important to make sure that vault owners are active, and by being forced to ‘do’ something to get compensation they understand and accept the terms of the compensation offer. We wanted things set up (some contract with an API or whatever) so that once the vault owner acted to accept the compensation that the funds would then be automatically deposited in their wallet.


Thanks for the hard work, especially for the few guys like @MakerMan.
However, I’m afraid we’re losing the momentum, as the process getting long long delayed.
The Maker team is busy fire-fighting with the competition from Compound, the un-peg of Dai… I’m sure there will be more other issues popping up.
I don’t want to complain, but one can check how Balancer is responding to their customers’ loss. I’ve never seen @rune made a single comment on the compensation issues.
We, the victims, are stuck here, at the mercy of the Maker team.

1 Like

@make_dao_2020 The whole compensation thing I think is something the Maker community wants to put off until they get a good chunk of surplus in the kitty. Which is reminding me as we grow the surplus slowly here the team should start talking about increasing the surplus so we don’t end up buying MKR back at high prices when we need to build something of a warchest for compensation.

I know this whole waiting thing is tough on everyone, feels like no-one cares, nothing will happen. Hell I don’t even have a crystal ball on this. I know everyone is concerned about getting the PEG dealt with and this whole COMP/compound issue driving markets in wierd ways. Yeah there always seems to be something more important that gets addressed first around here. Will see if we can get the can kicked so we can at least get a forum poll on whether we should put up Poll 1 since we need a yes to that before we can get to the meat of this in Poll 2. The real stop will be when we come to need funds with the surplus at 200K or setting the compensation method and percentage…

We are working with @LongForWisdom the second governance facilitator to make sure we don’t make a mistake here trying to on-chain poll this when there is lots of other stuff to do. Literally it is a matter of governance bandwidth and the community bringing this up in importance so we can make the next moves one way or another.

Sorry this isn’t moving faster but Compensation groups hands are somewhat tied here. We want to push this, but we also want it to pass so vault holders at least have a chance to say yes or no to something individually.

If you have any friendly spirits you call on - make a special sacrifice. :wink: j/k

Thanks a lot for your patient reply, @MakerMan!
I don’t know how others take this, but I’m even more pessimistic now. The Maker community wants to put off… I’m sorry to be mean, but I don’t understand: Is it the Maker community or the management?
It seems unfair that the team avoid taking the responsibility by claiming it’s decentralized, especially there is a management team and they did pre-mine a good portion of the maker token.
“The Maker Foundation is comprised of team members who have dedicated themselves to the task of bootstrapping MakerDAO to fuel growth and drive the organization toward complete decentralization.”

1 Like

@make_dao_2020 Hey I completely understand frustration here. Maker Foundation for various legal reasons pretty much is HANDS OFF on this whole compensation thing so don’t expect anything from them as legal given the court case they are looking at has pretty much rightly signalled to foundation to no say one word on compensation. So this is left entirely to governance and to the assembled team to move forward.

We are discussing doing a forum poll on Yes/No/Abstain to the plan with a on-chain poll 1 for the same set to run on 7/13 (next week) for governance.

@MakerMan Thanks again for your reply!

You’re welcome! no problem man. Sorry this isn’t going faster!. Hopefully once we hurdle poll 1 - approve the plan. We can move a bit faster.