Real-World Finance Core Unit Report - 2021-05

May 2021 reporting for Real-World Finance Core Unit

Current strategy

(no changes vs last month)

Our current strategy is to onboard $300M of real-world assets. While the long-term strategy is to simply invest in senior tranches of structured products rated by credit rating agencies, we recognize that it’s not currently possible in DeFi. We have a two-path approach. First, partnering with Centrifuge, we work on a smart-contract way of investing in structured finance. Second, we are investigating a Trust-based way to invest the MakerDAO balance sheet in the real world using real-world tools.

We also think that having a strong capital base (i.e. surplus buffer) will be important to disrupt the traditional finance world. As we recognize that people prefer to burn MKR while it’s seeing as cheap, we also work to inform the market and the community on the financial strength of MakerDAO. We think that if the market recognizes the financial prospects of MakerDAO, the MKR price will increase, giving more opportunities to consolidate the capital base. Such knowledge will also help Maker Governance make more scientific decisions.

Review

State of RWA at MakerDAO

A Parameter Proposal Group - MakerDAO RWA Committee was created to follow RWA.

Others collaterals

We have 4 collaterals that will be presented on June, 7th for a Governance Poll with a target to be in the June, 18th executive.

The first three are already existing pools on Tinlake, the last one will be approved with a 0M DC increased to 20M after the SPV creation.

On 6S, we published a Preliminary Contracts Assessment. A Cayman dedicated law firm started to look at the Cayman part.

We continue to work as well on a generalized structure: Trust model - Work In Progress

Finance

(will be updated with the May financials when done)

Legal

Still on the work to onboard a US law firm to advise us on RWA as a whole. The first focus will be an audit of the legal structures of New Silver. It’s complicated to hire a law firm as the DAO is not a legal entity. I will use my own legal entity. We also tend to end up with blockchain lawyers first (as we are categorized blockchain) and not structured finance lawyers.

Research

Publised an article on Stablecoin design - Liquidity

Marketing & PR

Data infrastructure

Not much expect a new query to follow where is DAI

Public work

Team composition

@SebVentures - Facilitator
@williamr - Full-time contributor RWA
@Philinje - Part-time contributor RWA
@jameskmccall - Expert for farmlands
@christiancdpetersen - Expert for energy-related project finance and legal
@Aes - Financial analysis

Core Unit budget

You can find the ledger of the RWF Core Unit multisig here . 27,899 DAIs were spent, mainly on compensation.

Previous reportings

12 Likes

I can’t wait to see the before and after RWA a year out. Hopefully parabolic growth from here on out.

Sounds good Sir–any way we can up this to $500M and split it 50-50 between 6S and Centrifuge?

Good to see you doing PR work–hopefully once there’s a Marcomms CU in place we can take this to another level.

1 Like

@ElProgreso On the scaling collateral exposure, the issue is not related necessarily to the figure on itself. We actually already have a backlog of structures which combined have a nominal value in exposure of more than 500M. At this point, there is a significant amount of effort into tidying up the SPV and trust structures to make sure we can scale confidently first of all, by mitigating operational and legal risks. Once that has the proper guardrails in place, scaling will become a smoother process.

2 Likes

Terrific. Hope to see RWAs gain traction sooner rather than later.

"Escape competition through authenticity."

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