Senator Warren Meeting; Chance To Address Issues

As some of you know by now, I finally got an email from Senator Warren’s office requesting a meeting on Monday. This is expected to be a fairly mid-level meeting with the senator’s advisors on banking issues.

It is, however, the first time I’ve managed to get one of our critics to engage with us. Past meetings with senatorial and congressional members/staff have all been those who are at least “crypto curious.”

I do not expect fireworks from this meeting, but since it is such a rare opportunity for the crypto community at large to engage directly with Senator Warren’s office, I did want to solicit (reasonable) questions and comments that may be worth bringing up. Those familiar with Warren’s politics, feel free to chime in with ways that Maker specifically aligns with those.

The main goal, however, is to further open the channels of communication. Typically these first conversations are extremely basic in explaining blockchain technology and Maker’s business model. As a frame of reference, in the most recent testimony by SEC Chairman Gary Gensler, Senator Warren questioned Chairman Gensler about transaction fees specifically on decentralized exchanges. His answer – which satisfied her – was that it was determined by user agreements. Not gas. Not dynamic pricing (I try to use Uber’s “surge pricing” as an analogy many understand). User agreements.

We have a long way to travel down the road of basic outreach and education, so please offer comments that are non-technical and succinct, if possible.

As an aside, I am actively trying to put MakerDAO at the lead of a more conciliatory outreach effort than the mainstream lobbying groups and individuals – Coin Center, DeFi Education Fund, Ryan Selkis, Jake Chervinsky, etc. Their positions are worth staking out, but Maker is both better behaved and more responsibly run than the bulk of crypto. And to date, I think our own efforts have clearly borne more fruit as more and more requests from institutions and policymakers come in, wanting to learn more about crypto, now that they know not all of us bite.

I would appreciate you sharing this post in other areas of the crypto community – other DAOs, social media channels like Discord, etc – so that 1) a broad array of input can be received to help prepare for what I hope will be getting our foot in the door to more meaningful discussions with our sharpest critics, and 2) to demonstrate to the crypto community that dialogue is possible, and Maker will need co-travelers on this less antagonistic path.

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Going to global pin this til Monday, given the timeline and the request for input.

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Analogies that help senators understand this technology are I think the most helpful bit. Plus one.

I’d also love to see us write up a cogent narrative (like @mrabino1 before the 6s vault went live) on why sophisticated and cordial interactions with DeFi protocols creates win wins. Also so they have an artifact to refer back to.

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Will you be recording this meeting? Can the community get a transcript? How will you report back the feedback from Senator Warren’s team?

IMO you might want to showcase the growth/ambition of Layer 2 tech, and how this is trying to resolve the expensive fee problem–also, if you can explain to them in a simple way of why Ethereum Gas Fees are valuable to the security of the network–that would be awesome–but that might be a tough task (being that the average person might not care to understand). Just my 2 Conti.

BTW, do you think Senator Warren’s team will be open minded? Seems some of these Politicians minds are made up and seeking a platform to display such is part of their game, IMO.

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This is a private meeting with her economic and banking advisors. I’ll report back if anything of substance is said. The main goal is to work up the ladder and broaden the conversation.

If an opportunity for in the weeds discussion about details presents itself, I’ll pursue it. But I suspect that will be some time in coming.

Everyone says they won’t be. But talk is cheap, so why not use it? The off chance that we can find something to move forward on – and I do genuinely believe Maker could be held up as adhering to many of Warren’s signature ideals about transparency, equal treatment, and financial access – is too much to pass up on.

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Agree we can take a soft approach towards regulators. Unlike some others we do not have to make this a fight.

How about a focus on the positive things we are doing?
Especially in the intersection crypto and real world finance. Examples such as:
6s: financing refurbishment of buildings brings real jobs, real taxes and real city center improvements
SolarX: we are financing a solar plant. How cool is that?

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Absolutely underline the POSITIVES of the industry…#s are important to Politicos…like how many DAI users there are…etc. That’s about all they hear is Numbers, esp, the human kind :+1: :smiley:

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So instead of defense, should I play offense with, “We’re the side of crypto you’ve never heard about, and you should love us because X, Y, and Z?”

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A very Positive offense that will kill them with Kindness…Planet_X makes some great points. We want to blunt the sharp knives…with how this will help the poor and middle-class Americans that Warren “seems” to care about.

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And, that a decentralized stablecoin is NOT the same as a centralized one. DAI plays nice with regulators and has a mature governance model (DAO) that really should be played up quite a bit. This truly may be what a regulator can hear: not a bunch of shifty super coders…but a seasoned community that has put enormous thought into their project!

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If you are meeting with the banking and economic advisor, what process do you have in place to assure things are not “lost in translation”. I fear having this meeting without a decision-maker in the room creates the opportunity for miscommunication. Are you attending this meeting with a communication strategist from the Maker team?

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This is so far following the same process as with every other lawmaker office I’ve spoken with. These are the subject experts/gatekeepers, and really control access to their lawmaker.

I think it’s worth remembering that none of these lawmakers sit around reading up on crypto all day long. I met with a friendly senator’s office yesterday, for example, and much of the time is still spent on education. Things we take for granted — like that you don’t mine DAI — are not things they have heard before.

The policy advisor I’m scheduled to meet with is a PhD economist whose work is on monetary policy and political economy of Fed appointments. I expect she will pick things up quickly, but I assume there’s not a background in blockchain.

Normally I wouldn’t be asking for input to this extent, except that it’s such a rare opportunity and deviation from the norm to engage with a strong critic in good faith.

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Going to chime in with a few key points to keep in mind you really want to make clear to them about Maker and DAI.

DAI is not money! DAI is a promise by a borrower to pay back debt, and is fully backed by the borrowers deposited collateral and the system mechanics designed to maintain this

  1. In this sense DAI is a contract between the borrower and the system based on the collateral deposited. DAI is both a promise to repay debt but also this promise is fully backed up with collateral deposited with a value greater than the debt.
  2. DAI at all times is backed by the value of collateral - so even if a borrower never repays their debt the system will eventually auction their collateral and do it for them using their own assets.
  3. Should anything fall through MKR itself is the final pledge to DAI that its value is backed by something.

The system is fully liquid at all times. Maker does not reloan collateral and a borrower can pay back their debt and free their collateral whenever they want

Maker does not print DAI - borrowers do

The status of the Maker system is fully transparent and on-chain. AT ALL TIMES! No other stablecoin issuer is as transparent as Maker!

Finally by design MKR token holders will never expect a dividend or return and so as far as anyone can tell fails the Howey test. If there was one question I would ask it would be to see if you can get confirmation of whether in their view MKR does fail the Howey test. In fact MKR holders know fully well they could be diluted at any time. The only way a MKR holder gets a return is if they sell their MKR at a later date and there is not one guarantee this price will be higher than when they purchased it.

All MKR holders have an opportunity to participate in all governance functions at all times.

Beyond this - great job @PaperImperium I hope you at least make some notes of the conversation and brief MakerDAO after the fact.

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Maker sure to point out that Maker out of any of the decentralized projects is fully aligned with the above goals and add that DAI being PEGGED to the USD means Maker is doing this via USD effectively.

I think all of these are important but go for the bigger issues.

Equability - equal access for all. DAI with a PEG value of 1 USD is bringing the dollar to the third world in unprecedented ways from the individual to the institution.
Fairness - equal access means fairness to all.
Transparency - there is not one project that is as transparent as Maker
Over collateralized - there is not one stablecoin that is fully overcollateralized via collateral classes.
Fully liquid at all times - collateral assets are never re-loaned and so fully accessible at all times by borrowers provided debt is repaid.
DAI is PEGGED to the USD - giving USD a premier spot with a fully transparent decentralized stablecoin protocol like Maker.

RWA and IV are important growth and focus aspects* that we are navigating but Maker is fully committed to the above key points.

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Yes. Maybe point out that (I think this would be of particular interest to Sen. Warren) that process of collecting taxes from businesses could be great simplified if all of their balance sheets were in stablecoins. We can see where the money is going, how much they are making, how much they owe automatically.

Your suggestion needs more nuance. A lot of businesses regard their money flows as proprietary. That’s the argument that Zcash and Aztec make all the time. Maybe radical transparency might make sense for certain kinds of public companies?

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Beside the very useful suggestions above,
I’d suggest you present/introduce yourself as

one of (or even “the top”) MakerDAO delegators, who therefore speaks for himself (and their delegates), just as a politician would.

and not as

I talk on behalf of MakerDAO.

This is not at all to diminish your status in the discussion. But it is to highlight one the most important aspects of MakerDAO: being a DAO controlled by MKR voters.

Thanks a lot @PaperImperium for your work.

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I think this really can’t be emphasized enough.

To put it another way, the US can continue with whatever monetary policy it sees fit. MakerDAO is the bridge that enables people to buy and sell whatever they want with something that is pegged to the US dollar on the blockchain.

Unlike other stablecoins, this one is robust, time-tested and decentralized. It puts the US in prime position to continue to be the world’s only reserve currency in a world that pivots towards crypto.

Hopefully, some of these points stick or open some eyes. Even if not this time, it’s only a matter of time that someone of this profile “gets it”. Congrats @PaperImperium