Risk Core Unit Month in Review: August 2021

This post summarises the tasks, work, and activities of the Risk Core Unit for the month of August. In June and July, a number of collateral onboarding risk assessments were carried out. Final collateral onboarding voting and decision making on these projects are still in the pipeline and awaiting resolution. As a result, in August, the @Risk-Core-Unit focused on other research projects, in addition to the usual ongoing work on collateral onboarding risk assessments.

We have introduced a new research initiative to derive useful insights from different aspects of Maker Vaults. This month we have investigated data regarding vault owner’s growth, risk, market activity, and liquidation protection. Going forward, we will continue to collect data and automize monitoring of vault activity in order to get a better understanding of user demand and user behaviour.

In addition, more attention and consideration has been given to other relevant topics, such as (i) lowering liquidation ratios, (ii) dust parameters, and (iii) offboarding collateral. These reports can be found below under “Other Analyses”.

We have also updated the MakerDAO Risk Dashboard with new metrics, tools, and design. The new release can be found here: https://maker.blockanalitica.com/. More information about the update is set out below.

Finally, we are still working on the Nexo Institutional Vault Risk Assessment. The results are due to be released in September. We are currently awaiting the final outcome from the Nexo Institutional Vault Signal Request.

This is the first monthly summary of its type published by the @Risk-Core-Unit. We plan to post similar updates on a monthly basis going forward. We would value any questions, specific requests, or suggestions regarding these updates. Please add any comments below or get in touch directly with members of the @Risk-Core-Unit.

Collateral Onboarding Risk Assessments

Vault User Behaviour Analysis

Other Analyses


Community Engagements on the Maker Forum

Team Finances

Maker Dashboard

  • The dashboard currently contains:
    • Vault overview tab: by clicking on a specific vault type, additional information such as (i) main parameters, (ii) relevant metrics, (iii) date relevant to collateral risk model for determining risk premium and debt ceiling, (iv) liquidation curve, (v) collateralization distribution, and (vi) a list of all vaults for the specific vault type, are presented
    • Vaults at Risk tab: this page shows which vaults are eligible for liquidation with the next OSM price
    • Collateral Assets overview tab: each asset can be clicked on for further information, such as (i) on-chain and CEX market activity, (ii) current and historical on-chain liquidity and price slippage, and (iii) data regarding historical price, such as drawdowns and daily volatility. These metrics are used as inputs for our automated Risk Model: https://simulation.blockanalitica.com/
    • Oracle Security Module (OSM) tab: this page shows current and next OSM prices
    • Auction tab: an overview of collateral auctions and their performance
    • Forum Archive: this page contains previous analyses, discussions, and other posts on the MakerDAO forum written by our team
  • New features and categories we are currently working on:
    • DAI price tab
    • Maker vault users activity and behaviour
    • Interest rates tab for the wider crypto ecosystem, including various on-chain markets and CEX markets
    • Gas consumption for Maker related services, used also as inputs for dust estimation
    • System for risk scoring of individual users based on historical behaviour and DAI exposure
    • Vault owners & DAI holders address labeling
    • Monitoring of positions in Aave and similar lending markets in order to estimate their credit risk and possible liquidations, which can impact asset slippage (also relevant to D3M)

Pending Work

This section covers pending and not yet finalized work in addition to investigative analyses of certain proposals.

  • Nexo Institutional Risk Assessment & Parameters Proposal
  • Polygon Treasury Loan Risk Assessment & Parameters Proposal
  • New Defcon Spells
  • stETH/ETH Curve pool (Cropjoin) Investigation
  • B-Protocol & Deco Protocol Investigation
  • Risk Evaluation of DssCharter implementation
  • Collateral Framework Continous Ranking
  • Dashboards - Risk Scores (per asset and vault owner)
  • Collateral Offboarding Parameters for remaining vault types
  • PSM-PAX-A DC IAM Parameters
  • Part of group developing a Framework for Institutional and Treasury Vault types

To read more about previous work and engagement from the Risk Core Unit, please visit our forum archive, where we document all relevant topics and discussions that the Risk Core Unit participates in on the Maker Governance Forum.