Parameter Proposal Group - MakerDAO Open Market Committee

Essentially yes, in practice what happens is @Primoz provides risk premiums for everything, @monet-supply provides competitive analysis for everything, then we go through each asset and discuss changes we think we should make.

In the future I’m hoping that we’ll have more of these groups appear, at which point we’ll share the risk and competitive input but potentially end up with differing proposals based on the individual PPG’s goals. One might focus on risk mitigation exclusively and push for reductions to lower stablecoin exposure for example. Another might favour maximizing protocol income and subsidizing risk.

The goal there would be to have competing proposals be voted on based on the same data such that governance can choose based on their desired direction.

Any turnover would need to be clearly communicated, and part of MIP46 says the following:

It’s more or less impossible to account for all the different ways a person could end up with diverging incentives. In my opinion the best we can do is:

  • Make sure that rationale is expressed and related back to PPG objectives, so that holes in logic can be addressed.
  • Make sure there is time for debate so that proposals can be questioned.
  • Make sure membership is public and there is a reputational component.
  • Make sure members have at least considered their conflicts of interest by requiring them to list them.
  • Make sure that MKR Holders sign-off on all proposals.

In principle I understand your point and the risks. But we have this risk everywhere, and the best we can do is mitigate it. Core Units could be bribed in the future to pursue outside agendas, MKR Holders could also be bribed to vote in certain directions, and PPG’s could pursue their own interests in their proposals.

The surest way to ensure alignment in a PPG or Core Unit is to force them to stake MKR in order to do the job. At this stage this doesn’t seem feasible to me, it’s too much of a downside / capital requirement. How much MKR is enough to ensure alignment for something like this? 1, 10, 100? Even just 1 MKR is ~$2000, that’s a big capital requirement to provide input into a joint proposal once a month.

This series from @Planet_X talks about how we could move to staking, and it’s a very neat idea, and would allow a lot more throughput, but it’s probably not feasible at this stage of growth / scale.

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Hi everybody,

quick update:

We just unanimously decided to cover PSM-parameters in future proposals as well - especially since PSMs are a substantial part of DAI creation.

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They seem to me to be by far the most fundamental part of coining DAI when entering sideways or bear markets. Good call guys!

@ultraschuppi Is this group open for members or observers?

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Following up, because I’d like to see more diverse membership, and @williamr is someone I’d support adding to this committee.

Since it has the power to get a proposal to cut our revenue by tens of millions into an on-chain poll in less than 24 hours, I think there needs to be more people on the committee to provide feedback beforehand.

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The MOMC meetings are not public so we currently do not have observers. Regarding adding new members to the PPG, we are still undecided if and how to move forward.

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Is there a particular reason why observers are disallowed?

It’s hard to have an honest conversion when things are going on the public record.

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@hexonaut That’s 100% true. But having an observer from within the DAO is not the same as putting a video or transcript of the meeting out in the public view.

Sure, I guess I thought you meant opening up to any number of observers which is similar. I don’t really see the use in having an observer in the meeting if they aren’t participating. Are you worried we are acting in bad faith?

No. But allowing an observer or two like @williamr would help disseminate information a bit faster. One of my chief complaints is the lack of discussion with the community.

Observers would go a long way to dispelling the image of a “smoke filled room.” Remember: with only one PPG for rates, this closed meeting of a few individuals is deciding what the only candidate on a ballot will be. I think allowing known DAO members to sit in and listen is entirely appropriate. If nothing else, the actual information this PPG is working from is (I believe) required to be shared, even if the discussions amongst individual members are not.

Yeah we probably rushed this last one too much. This was in response to us moving too slow last time. We probably need more of a middle ground. I think that’s a separate issue from the observer though.

The MOMC is already filled with mandated actors and community members, so I don’t see what adding one more community member “to observe” will achieve. I can assure you it’s pretty mundane. We look at data and set rates based on market competition / risk premiums.

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Clearly not. Recommending swinging Maker to an operating loss in order to target ~20% of our DAI supply for growth does not strike me as mundane. There’s not much more exciting than recommendations that make or break the financial security of our protocol. Especially when I worry there’s not a clear understanding of how DAI is currently generated, where our profits come from, and why we are differentiated from the likes of Aave and Compound.

To be clear, I am not recommending myself as an observer. But I can think of little harm by adding an extra set of risk-conscious eyes like @williamr or any number of others. Surely listening in would not increase risks related to this PPG’s recommendations?

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It sounds like you just have a different opinion on how to set rates. We mostly stick to the competitive rates with some small subjective discussion about the precise number. If you don’t like how our group operates feel free to form your own.

Thank you for the endorsement. I’ll consider it.

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All documents are shared (the last publication link to the wrong document and no one complained so that show how much people are using the information).

The group is already 7 people from the DAO. How adding 2 more that need to remain quiet will change anything? This group is self-organizing and seems quite effective (the last poll passed with 99.98% in favor and people want faster decision). @williamr is in NZ so the current meeting time will be in the middle of the night for him.

@PaperImperium can you please frame what the problem really is and what you really try to achieve because I don’t get it.

If you are not happy with it you can always create another PPG, or emit Signal Requests. If you lack an understanding of how DAI is generated, you can work in this area.

Attempting to make committees as large as possible is also in the Simple Sabotage Field Manual. Let’s avoid sabotaging ourselves.

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Thank you. This seems to be a popular idea.

Paper what would you have recommended? To keep rates steady?

I mean as I said on another post–if we worked at a Bank and decided to cut revenues by double digit percentage points–yea, I would probably be out of job by Monday morning.

I guess maybe MakerDAO should put it’s foot down. If ETH heads enjoy paying high TX cost, are okay being front-run (like myself :slight_smile: ) then they/we should also feel privilege to mint DAI and Pay higher Stability Fees. Its kind of like a luxury brand Louis Vuitton dropping prices because Walmart decided to drop theirs. Okay maybe a bad example, but you get my drift…

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