Risk Core Unit Month in Review: October 2021

This post summarises the tasks, work, and activities of the @Risk-Core-Unit for the month of October. Our primary focus this month is outlined below.

This month we have investigated three potential vault types, (i) a CurveLP-stETH-ETH vault, (ii) a WBTC-B vault, and (iii) a WBTC-BProt-A vault. The CurveLP-stETH-ETH collateral onboarding risk evaluation has been published to the forum. A review and plan of action regarding WBTC-B and WBTC-BProt-A has also been published. A WBTC-B collateral onboarding risk evaluation will be published later this week.

Several updates and improvements to the MakerDAO Risk Dashboard were undertaken. These include (i) incorporating a monitoring tool for the Aave v2 DAI Direct Deposit Module, (ii) a risk page redesign, (iii) improved “Vaults at Risk” simulations, and (iv) additional metrics for external DAI capital. More information about the updates are set out below.

Two Risk Core Unit members, Primoz and monet-supply, are part of the MakerDAO Open Market Committee. Due to the increased demand for DAI minting a Mid-month Parameter Changes Proposal was published. This included several proposed changes to the DC-IAM of ETH-A, ETH-B, and WBTC-A. The end of month Parameter Changes Proposal focused more on increasing the stability fee of several vaults.

Finally, six Core Unit members attended Lisbon Blockchain Week. Activities included: (i) attending the LisCon conference, (ii) meeting several MakerDAO community members in person, and (iii) both internal meetings with Core Units and external meetings with other DeFi teams.

This is the third monthly summary published by the Risk Core Unit. To read last month’s summary, click here. We will continue to update the community on a monthly basis going forward. We 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

MakerDAO Open Market Committee

Community Engagements on the Maker Forum

Maker Dashboard

  • Maker Risk Dashboard (Oct 1, 2021)
  • D3M section - Incorporated a model that fetches the current state of the Aave v2 DAI Market and calculates yearly D3M revenue given the chosen Target Borrow Rate and D3M Debt Ceiling.
  • Vaults at Risk Simulation - It is now possible to calculate and identify which vaults are at risk for specific OSM price drops
  • DeFi monitor - Added DeFi rates for Aave V2 and Compound for several assets. See screenshot below.

  • Risk section - Risk page redesign. All risk related information will now be under the “Risk” section of the website. See screenshot below.

  • External DAI capital - For each individual vault, we can now check if there is any external DAI capital in an owner’s wallet or if any DAI is allocated in other DeFi protocols (farming). This will help us understand how quickly a Maker Vault user can obtain the necessary amounts of DAI (without having to buy it on the market) in order to save their vaults. See screenshot below.

  • Improved Risk model - We now calculate the protected vaults percentage based on our protection score. We use 100% high risk debt + 50% medium risk debt + 10% low risk debt. We then see how much that is compared to all debt.
  • Capital at Risk section - See screenshot below.

Pending Work

  • Add more DeFi protocols and rates to the DeFi section of the Maker Risk Dashboard
  • [WBTC-B] Collateral Onboarding Risk Evaluation
  • Genesis Institutional Vault Investigation
  • Celsius Institutional Vault Investigation
  • D3M credit risk monitoring
  • Research on D3M alternatives
  • Auction parameter analysis and update
  • DAI supply organic growth metrics

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.

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