MIP41c4-SP1: Facilitator Onboarding (Real-World Finance)
Preamble
MIP41c4-SP#: 1
Author(s): Sébastien Derivaux (@SebVentures)
Contributors:
Status: RFC
Date Applied: 2021-01-26
Date Ratified:
Specification
Motivation
- Being part of the Maker Community and Governance, I truly believe MakerDAO will change the world. Having worked to build the Real World Asset (RWA) section of the Risk team for 5 months, I want to push my contribution to the project to the next level by creating a Core Unit.
Core Unit Name
- Real-World Finance
Facilitator name and information
- Name: Sébastien Derivaux
- Forum handle: @SebVentures
- RocketChat handle: @SebVentures
- Ethereum wallet for signing: 0x0d61c8b6ca9669a36f351de3ae335e9689dd9c5b (or any new address provided by @SebVentures)
Facilitator Commitment
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The vision
- On the core unit : With TVL on DeFi is growing quickly, it’s still only $30B. The traditional financial system is over the quadrillion. I think both systems will merge meaning we have to find ways to onboard all those assets (bonds, real-estate, derivatives, …) and tools (Yield curve, risk frameworks) in DeFi. Moreover, Maker is resurrecting the Free Bank concept. With an expected competition in this field, I think MakerDAO should continue to innovate and should stay at the forefront of onboarding the real-world financial system into DeFi. Failure to do so might lead Maker to lose its leading position. The aim of the Core Unit is to nurture competencies related to those challenges and find solutions for each problem in order for MakerDAO to be the leader in this space. The Core Unit is a toolbox at the service of Maker Governance.
- On the facilitator role: The role of the facilitator is to serve as a link between Maker Governance and the Core Unit facilitators. Using the reporting, it allows Governance to have a simple view on what is done on the Core Unit topics. The Facilitator is also the point of contact if Governance wants something specific to be done/prioritized. On the other side, the role of the Facilitator is to allow the contributors to be efficient without having to understand every detail of MakerDAO (especially important for punctual contributors). The Facilitator is also handling the administrative work for the underlying legal entity of the Core Unit.
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The how
- Continuity: continue the work done on Real-World Assets with the same team. You can refer to our reporting here and here.
- Adaptability: The Core Unit proposal is broad and offers ways for Governance to influence and prioritize the core unit work within the mandate. Onboarding the whole real-world will take time and not be a linear process nor a predictable one. Similarly, leveraging our balance sheet, will require a lot of theoretical work and can be limited by Smart Contract bandwidth.
- Scalability: While we aim to start thing with an experiment in order to learn, the end game is to have something that scale. For instance, we aim to have around 20 vaults types at most for Real-World Assets. Each vault type will be managed by an Asset Manager that will source investments opportunities from plenty of Asset Originators as well as the open markets.
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The structure
- Legal The Core Unit will use the existing legal entity of the Facilitator and/or create a new one.
- Budget The budget is defined in a MIP40c2 sub-proposal as well as an informal one. The aim is to continue to be able to fund the current contributors but to cap any team expansion to a revenue-generation milestone.
- Reporting The Core Unit have historically been keen to share progress information (here and here). A monthly dashboard will provide governance transparency of Real-World Finance work and Key Performance Indicators. The January report can be found here.
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Facilitator credentials
- Risk domain facilitator
- Lead the MakerDAO RWA working group since September 2020
- Member of the Autonomous MakerDAO working group and rate setting working group
- Collateral onboarding process for Real-World Assets (RWA) and 6S risk evaluation
- Work on the accounting of MakerDAO and implications
- MIP13c3 - Strategic Reserves proposal
- Smart Contract Community assessment for EURS and HUSD
- Why would I make a difference? Being in charge of Real-World assets since September, I have shown my capacity to move this topic forward. I know well the systems (from the code of Maker Protocol to the legal documents of Centrifuge-like collaterals) and all the real-world assets partners with whom I have daily interactions I have also build the RWA team with @williamr and @Philinje which will be part of the Core Unit I propose.
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The main goal is to onboard $300M of Real-World Assets for the end of 2021.
- Confidence in this target can be found by the fact that the worked on deal-flow is already of $200M (6S aiming for $100M after 12 months for instance)
- We are in early talks for some $100M collateral types (solar farms, project finance, …)
- The main risks for achieving this objective are:
- issues with setting up the infrastructure (MIP21 and MIP22, trust structure)
- DAI-demand collapse
- unwillingness by MakerDAO Governance to invest in Real-World Assets.
