MIP13c3-SP10: A Real Estate Stablecoin as the Next Big Move for DeFi - joint venture with REINNO

MIP13c3-SP10: Maker and REINNO joint venture

Preamble

MIP13c3-SP#: 10

Author(s): Viktor Viktorov (@Viktor_REINNO)

Contributors: n/a

Status: Request for Comments

Date Proposed: 2021-01-28

Date Ratified: N/A

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Declaration Statement: A joint venture between Maker and REINNO to refine and deploy REINNO’s stablecoin.

Declaration to Replace: n/a

Specification

Context and Motivation

  • To provide liquidity to its tokenized real estate investors, REINNO will allow them to stake their tokens into the REINNO protocol and receive REINNO stablecoins in return. REINNO stablecoin is a bundle of multiple tokens representing tokenized real estate.
  • This stablecoin can be used as collateral for obtaining DAI. REINNO has an active MIP6 collateral onboarding application.
  • REINNO has smart contracts for its stablecoin and governance tokens but believes that Maker’s expertise in building community and liquidity will be of great value for the project.
  • There are significant synergies between both organizations. Combining REINNO’s strong real estate knowledge and systems with Maker’s leading DeFi position and expertise in the space will undeniably lead to the protocol’s success.
  • Maker’s participation in the smart contract will increase transparency and further improve the reliability of REINNO’s stablecoin as collateral.
  • REINNO is offering to distribute a portion of the protocol’s governance tokens to the current Maker’s Governance token holders.

Declaration Detail

  • REINNO is a financial technology company offering a new solution for commercial real estate (CRE) tokenization, lending, and investing with a focus on providing liquidity.
  • As part of its long-term strategy to provide liquidity in the real estate space, REINNO developed a decentralized system for staking tokenized real estate and issuing stablecoins. The stablecoin is similar to the Maker’s but backed by pre-screened and diversified tokenized commercial real estate.
  • REINNO has decided to propose Maker to join forces and work together on the development of this DeFi protocol.
  • The intent is to collaborate on finalizing and improving REINNO’s stablecoin. REINNO has already developed the smart contracts required to operate the system. At the same time, MakerDAO can contribute significantly with its know-how of price stabilization, governance, and community management.
  • The scope of this joint venture is limited to REINNO’s stablecoin and governance tokens associated with it. It will not be extended to other tokens issued or services offered by REINNO.
  • If the joint venture is approved, REINNO will distribute its governance tokens to the current Maker’s Governance token holders. These governance tokens will be used to vote on decisions concerning the REINNO stablecoin protocol. The exact number of governance tokens distributed to the Maker community will be discussed further.

Relevant Links

· REINNO’s MIP6 proposal

· Joint Venture proposal

· Collateral onboarding call on Feb 3rd

1 Like

Hey Viktor, I have a couple of items of feedback to give you about this Declaration. I’ll start with process-related things, then move on to what I feel are more substantial issues.

MIPs Process + Format
First, for a subproposal to be considered in the RFC phase, it needs to be both posted in the forum and a PR needs to be created and accepted by the MIP Editors that adds it to the MIPs github located here.

Second, given the above this should be in the #MIPs:conception category rather than loose in the MIPs category.

Third, the motivation section is meant to include the reasons why this proposal is being created, and how this benefits MakerDAO. I’m not sure that the contents of that section reflect that well in the current iteration. This brings us neatly to content…

Content

I’ll be blunt here, my main issue with this proposal is that it comes off as if you’re trying to bribe MKR Holders to vote in favour of this partnership by offering REINNO governance tokens (either intentionally or not). At the very least, this is in poor taste, at the worse it can be considered a vampire attack on the Maker Protocol (sucking expertise into what could be a direct competitor and disrupting the incentive alignment between MKR Token Holders and the MKR Protocol).

This sort of proposal is one of the few that I would seriously consider blocking on the grounds that it has the potential to cause a shutdown and fork of the Maker Protocol. So that’s the first issue.

The second issue is that even if this Declaration were to pass, it’s unlikely you or MKR Holders would be able to compel any of the Maker Community to actually assist REINNO in any meaningful way. You’re proposing to reward MKR Holders with governance tokens for work / effort contributed by individuals or mandated actors. Even if MKR Holders explicitly confirmed via token vote a statement like ‘We want the mandated actors to prioritize working with REINNO to develop their competing stablecoin’, I think it highly unlikely that they would do so, and again, this leads to instability in governance and potentially a fork of the Maker Protocol.

Third, this proposal is entirely separate from the onboarding proposal you’ve produced, and I have no idea why (beyond receiving free governance tokens) any MKR Holder would vote for this, when we can approve REINNO for use as collateral without assisting you in developing a potentially competing stablecoin.


I did want to wait to post this until after the meeting the other day, and I hope this helps shed a little more light on why I was so uncharitable on that call.

4 Likes

I definitely agree with you on this point that it feels like a bribe for MKR holders. I would be interested in adding the REINNO stable-coin to the PSM or their governance token to our vaults, but as a direct partnership to the point that you pay us in governance tokens is a hard pass.

Hi @LongForWisdom and @Malgaph,

Thank you for your comments.
I understand your concerns and there are a few things we could do from our side.

One option is temporarily pausing this proposal, in ordered for the MIP6 collateral onboarding proposal to be processed fairly and independently; we will make adjustments to the MIP13 proposal in the meantime and resume it once the other voting is done. The second option is keeping this proposal running with a few key edits. In both cases, we will make changes to this proposal.

One of the changes will be either completely removing the part about REINNO governance token distribution or changing where these governance tokens go – so that instead of individual MKR holders the tokens can be sent to the Maker Treasury.
We apologize that our intentions to award the Maker stakeholders were misleading. In no way did we want to have a negative effect on Maker governance or give a wrong incentive to the community. Therefore, we will rework that part of the proposal.

Our hope is to work together and create long-term benefits. REINNO could help Maker onboard a particular type of real-world assets (commercial real estate) without Maker going through the trouble of reviewing each property individually. In that regard, Maker could have strategic partners leading the onboarding of different real-world assets. For instance, REINNO for real estate, another one for gold, another one for art, etc. This would allow Maker to have a portfolio of many asset types without unnecessary headaches. Maker’s participation in polishing REINNO’s protocol in the short term can be beneficial in the long term. It’s a relatively small investment of time and effort for potentially a lifelong supply of tokenized real estate.

We are always open to suggestions and are looking for ways to improve our proposals and make them more fitting to Maker’s strategy. We’ll be happy to discuss how to make this proposal better and whether to pause it for now.

If we (REINNO together with the Maker community) decide that it is better to keep it running, I will make adjustments to the format as well.

3 Likes