Our first month as the Protocol Engineering Core Unit has seen some wild market fluctuations that have led to extensive discussion and debate about the robustness of Maker Liquidations. As the following illustrates, the team has continued to work not only on Liquidations but also on a variety of other initiatives across the protocol.
This list serves to summarize the work completed during the month of May and provides a useful overview. Please feel free to review, ask any questions you may have, and we look forward to continuing this work in June!
The month of May saw the usual Executive Proposal cadence. There was some delay passing the initial Liquidations 2.0 activation executive, however it was all in time for the sudden market downturn. Thank you to the other teams that worked with us to get these proposals up on the portal each week.
- April 30: Liquidations 2.0 Activations and Oracle Feed Changes
- May 7: Liquidations 2.0 Activations, Transfer May Core Unit Budgets
- May 14: Parameter Changes and Oracle Updates
- May 24: Approve May 2021 Governance Cycles
- May 28: Urgent Changes, Oracle Whitelisting, Liquidations 2.0 Activations
The team identified two potentially problematic threats to the protocol and therefore highlighted a number of mitigations based on a root cause analysis. This work identified what triggered the oversight and includes future considerations for improving our processes and ways of working.
- End.flow() Overflow Bug Postmortem
- Emergency Shutdown Module and End Module Upgrades and Disclosures
Deserving its own section this month, Liquidations 2.0 underwent final parameter tweaks documented in the following forum posts:
- MIP45 Parameter Changes and Updates
- Adjustments to the tip parameter as final change to incentivise kicking off auctions
The Team conducted extensive back and forth discussion with auditors leading up to the release of the new auction mechanism. This included the following 3rd parties, all of which can be found on security.makerdao.com:
Working with the Integrations Team, we made final enhancements to the backstop keeper ensuring there was a supported ecosystem participating in Liquidations:
- Backstop Keeper Enhancements as an example implementation to interact with Liq2.0
- Updated Exchange Callees to support flash loan functionality within Liq2.0 auctions
The Maker protocol requires updates to support the addition of new collateral types as well as weekly changes to parameter values to ensure safe operation. These are often needed across Kovan and Mainnet, and this month included:
- Dss-deploy-scripts updates incl. tolerance, parameter, value changes etc
- Spells-Kovan upgrades incl. new collateral types, authorizations, tests etc
- MCD-Changelog updates incl. updated contracts and collateral types etc
- DssExecLib Office Hour logic Updates for improving office hours implementation
The team reviewed and improved a number of important contracts, including:
- DssVest Contract, testing scripts and forum post
- Keg contract review, was superseded by DssVest
- Delegate Voting Contract team review and improvement
- MIP22 Centrifuge Direct Liquidation Module review/discussion with Centrifuge team
- SushiJoin Adapter CropJoin + SushiJoin variant
- Flash Mint Module incl. team review, update and preparation for release
The following collateral types were reviewed this month. Thank you to Seb for preparing the Centrifuge collateral types for our review.
- SC math review of MIP21 Trust Company RWA001
- [SLP-USDC-ETH] ERC20 Token
- [SLP-WBTC-ETH] ERC20 Token
- [SLP-DAI-ETH] ERC20 Token
- [RWA003/CF4DRP] CF-DROP/MIP22 Token
- [RWA004/HT2DRP] HTC-DROP/MIP22 Token
- [RWA005/FF1DRP] FFT1-DROP/MIP22 Token
- [RWA006/PP1DRP] P1-DROP/MIP22 Token
Layer2 discussion has really heated up this month with a variety of Layer2’s growing in TVL. We’ve been focusing on getting the initial Optimism Dai Bridge configured, while also working towards a multichain strategy:
- Optimism Dai Bridge: Continuous Integration Testing, Slither CI Testing
- A Multichain strategy and Roadmap for Maker forum post
- Subsequent discussions with other Layer2 contenders following our post
The team completed a number of audits and improvements to oracle operations:
- LP Oracle Token audits
- MegaPoker and OmegaPoker (Kovan) which ensures that oracles are being correctly updated
In addition to the above development and reviews, much of this month included discussions covering;
- Liq 2.0 Coordination with Integrations, Partners, Keepers and liquidity providers.
- Taking time to create tooling that maps out existing authorizations to improve security and visibility into contract authorizations.
- The team did a review and update of the Collateral Framework List for the Smart Contracts Domain.
- We are in the process of moving smart contract copyright to the DAI foundation. This is an incremental process as various code moves from external repositories.
- The team has also engaged in Growth Core unit discussions exploring whitelist vault options, and L2 exploratory discussions.
A small detail worth mentioning - our team multisig has been transferred to the PauseProxy, meaning that Governance, if it so wishes, can vote to remove our access to monthly funding.
- Protocol Engineering Core Unit Multisig added to DSPauseProxy ownership
We are pleased to announce three new additions to our team. They come with extensive smart contract experience, exposure to Layer2 technologies and engineering best practices. I look forward to welcoming them into our team as they join us during the following months, and will let them introduce themselves in upcoming calls and/or forum posts.
Our first month closed within budget, for transparency the following is a summary of transactions:
- We converted 50k DAI into ETH to support current and future gas costs
- We transferred 8k DAI as payment to a 3rd party tooling provider that will be helping us with our Holistic Safety and Security Strategy
- We transferred 20k DAI to the Liq2.0 Keeper to ensure that a keeper was funded to
kickauctions. Once the
tipparameter is updated, this should not be needed.
- The remainder of the transactions were for team member salaries, some of which have been deferred to June due to delays setting up corporate accounts.
Thank you to the community for all your interaction in the forum and on RocketChat since we’ve become a Core Unit. A reminder that we also hold an office hours meeting, 3pm UTC every Tuesday for those that would like to drop by, have a chat or ask questions . The invite can be found on the Community Calendar.