[Meeting] Governance Q&A Sessions

[LongForWisdom]

Governance Q&A is a weekly meeting which will be run as an informal question and answer format with the primary goal of helping participants in MakerDAO understand how governance works. Sessions will not be recorded.

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This meeting takes place weekly at 17:00 UTC.
2020-10-05T17:00:00Z

Join our Cloud HD Video Meeting

Meeting ID: 826 0335 0722
Passcode: 743312

@LongForWisdom will be running this meeting as MakerDAO’s Governance Facilitator.

Please come with governance-related questions or topics in mind!

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I feel like there are a couple of advantages to running a more informal, drop-in style meeting like this.

• It should provide people within MakerDAO a less intense venue in which to ask questions and to learn about how governance works.
• The nature of the questions (particularly repeating questions from multiple sources) should help me figure out what content we need to cover as a priority in written governance documentation.
• It will hopefully help to increase governance participation and widen the pool of people that might be interested in working for MakerDAO on a formal or informal basis.
• It may help me to identify individuals interested in taking more of a role in the governance process.

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[LongForWisdom]

Reminder that this starts in 15mins. If you have any governance related questions or concerns, please just drop in.

[joshuad31]

@LongForWisdom Are you having a Q and A today?

[LongForWisdom]

Apologies @joshuad31, no I was away from the internet for the past couple of weeks. I will be having one tomorrow (Monday 4th) at the usual time.

[joshuad31]

11:00 AM Monday, Central Time (CT) ok I’ll be there

[LongForWisdom]

Apologies @joshuad31 , I may be up to 30mins late for this meeting given the urgent response due to the recent market volatility.

[joshuad31]

@LongForWisdom do you want to reschedule? Can you be any more specific when this time will be made available again?

[joshuad31]

@LongForWisdom Look, I just came to this time to get specific answers to specific questions. Maybe it’s just too inconvenient for you to answer over zoom. Let’s try another way. Here are the questions, you tell me how I can best find the answers:

1. When will dss-gov-rewards be implemented?
2. Will we be able to vote on how much MKR can be locked into these interest-bearing accounts?
3. Will we be able to vote on the yield rate for these accounts?
4. For MKR to be a profitable investment the market cap of DAI would need to exceed 5x the market cap of MKR. When do you believe this will happen?
5. Since the time of ETH Denver in 2020 MKR holders have lost 70% of their value measured in ETH. Over the last 8 months holding MKR as an investment has equated to shorting ETH. This trend is only likely to continue in the coming year as the probability ETH will exceed 2,000 USD increases.
   PART 1: What is the narrative going forward for holding MKR?
   PART 2: Why should investors not sell MKR now and cut their losses?

[joshuad31]

@LongForWisdom this time was very valuable, thank you. In summary, this is what I learned:

1. Implementation of dss-gov-rewards is greater than 60 days out.
2. There is a greater priority in the developer community to create new collateral types than there is for implementing any form of yield for MKR holders.
3. Being long on the value of MKR doesn’t make sense if ETH goes to 2,000 by the end of 2021 because there is no mechanism for guarding against loss in that scenario because holding MKR is effectively a short against ETH.
4. Threats in the medium term from regulation or changes in market conditions provide disincentives over waiting for a long term yield from the value of MKR increasing. Whatever narrative developers have in their minds is not adequately factoring in this cost.
5. Although some models could show providing a yield of 12% would terminate the incentive to short MKR using AAVE and could potentially remove a large amount of MKR from the market thus stemming the hemorrhaging of the MKR price the community prioritizes burn over yield because they have a narrative that does not take into account risks in the medium term.

Thank you very much

Joshua

[LongForWisdom]

Hey Joshua, glad you found it useful. You mentioned the barrier to entry to voting in the meeting. I believe this is the most up to date voting setup guide, if you do decide to go down that route.

[iammeeoh]

@joshuad31

because holding MKR is effectively a short against ETH.

Has this emerged from your interactions with @LongForWisdom?
I doubt so, I can’t imagine why this would be true.

[joshuad31]

@iammeeoh the statement was made that if it is becoming more probable that ETH will head for 2000 by the end of the year and where does that leave MKR holders? I’m not going to relay what @LongForWisdom said but I will say that I reached a conclusion as to what the narrative of developers working on the project is. That narrative doesn’t take into account the same risks and costs as my model does.

[LongForWisdom]

@joshuad31 wanted to give you an update. As it turns out, I misunderstood the dependencies for DssGov Rewards. It is in fact possible to implement with the current version of the governance contract (DSChief).

That does mean that it’s possible to implement more quickly, although it does still have the following dependencies:

• It requires the keg smart contract (which will most likely require a technical MIP.)
• DssGov Rewards itself needs to be written up in a (non-technical) MIP and go through the monthly governance cycle.

[joshuad31]

Thank you very much for this help

[prose11]

Hello hello! In support of Long taking some much deserved time off, I’ll be running the Q&A Session today, feel free to hop on with any Governance questions you might have (and I’ll hopefully have an answer )!