Next Steps for Real World Asset Onboarding - Risk Parameters for the recently accepted MIP21 and MIP13c3-SP4 for 6s Capital
Based on the recently ratified MIP21: Real World Assets Off-Chain Asset Backed Lender and the Declaration of Intent subproposal MIP13c3-SP4: Off-Chain Asset Backed Lender to onboard Real World Assets as Collateral for a DAI loan, there have been a few questions about what the approved risk parameters are for the implementation of this MIP and thus, the Real-world collateral type. Given that these two proposals outlined how a non-blockchain entity (a Trust Company in its fiduciary role as Trustee over the Trust) would be responsible for liquidations (if needed), many of the standard risk parameters coded into the Maker Protocol are simply not required (or rather, should just be set to zero). Therefore, based on the accepted proposals, the risk parameters outlined in the term sheet are as follows:
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Sector
- Financing Commercial Real Estate Credit Tenant Leases
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Sub-sector
- Constained to Single Tenant Net Leases and Ground Leases with pre-defined tenants (see the MIPs for more detail)
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Risk Premium
- 3.0% (as presently computed, see the MIPs for more detail)
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Liquidation Ratio
- Note: This should be hardcoded at 100% given that the community must signal a liquidation manually.
- For reference, Construction Phase: 142% & Stabilized Phase: 117% (based on cost computation, not appraised value)
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Debt Ceiling
- 15MM (initially set to zero until 6s has demonstrated that it has implemented the contemplated structures)
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Auction Lot Size
- N/A (handled by the Trust Company)
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Minimum Bid Increment
- N/A (handled by the Trust Company)
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Bid Duration
- N/A (handled by the Trust Company)
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Max Auction Duration
- N/A (handled by the Trust Company)
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Liquidation Penalty
- N/A (handled by the Trust Company)
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Dust
- N/A (handled by the Trust Company)
Next Steps
Pursuant to the approved MIPs, the 6s Capital team will be implementing the structure contemplated therein.
Once completed, I will be posting all related documents in the forum for the community to review (along with having conference calls to dicsuss any questions). Thereafter, an Executive Vote shall be put forth to both technically implement the collateral and raise the debt ceiling from the current 0 DAI to 15 MM.