I voted no because I think there are more meaningful ways to spend the Foundations MKR. Instead of burning, a better symbolic act would be set aside a portion or the whole set to reward supporters and bootstrappers of the Sai & Dai Credit System with MKR. The same way Uniswap airdropped their UNI token to LP’s and users, it would be great to widen the circle of MKR governance community and a show of goodwill to anyone who has interacted with/created a vault, OasisDEX, voted, or any other Maker property, because without these users the system wouldn’t have been possible. Since the MKR token preceded even Sai, it was impossible to reward these early participants with MKR (such as through yield farming schemes which exist today–which I’m not recommending btw). I think it could potentially be a big event in DeFi.
Many thanks for starting this signal request.
I voted no. Burning it does make for a great PR moment but I think it’s too short lived to make it worth it. I don’t think a single move like that will affect the price in a substantial long term way. Regarding the cognitive overhead, I think it’s one of those “good-to-have” problems so that doesn’t worry me too much - I am confident our governance is able to handle such issues.
My recommendation is that we keep it as an emergency reserve or strategic reserve fund. We only do something with it when the protocol has an issue that is beyond the scope of the surplus buffer. That kind of satisfies this requirement to a large extent
As for this point
You’re right that it’s the same thing but the optics of burning now and minting later vs the optics of “using our insurance fund” to cover protocol losses are quite different. Personally, I think the latter looks a lot better, even if it’s exactly the same net outcome.
I switched my vote to yes for now… but I’d really like to be convinced that this will be a good look for us.
Also, funding CU’s and other expenses… but particularly vesting CUs, would ideally be coming out of this 84k surplus. It may arguably be a good look to burn this MKR for now… but it’s less clear that it will remain a good look if we start minting some of it back at our whims when we feel we need to fund certain things.
To echo my ~hard stance of “no mint”… I was particularly anti-mint after this 84k is depleted. So, we can burn this 84k, and then mint at our leisure up til the 84k… minting later, beyond this 84k, I would be back to anti-minter.
I voted yes, but i would prefer burning only something like 60k and keep the rest. Partial burn does not remove the cognitive overhead though.
I also voted yes, but I would prefer to brun the majority and left some MKR to do something “useful”.
Provide liquidity on dexes we have as a collateral; Uniswap v3 MKR/Dai MKR/ETH and Sushiswap, Balancer etc. or are we doing this right now? (I scoured the forum for this but didnt find anything) Maybe i didnt thought this throught and it raises conflict of interests?!?
Better liquidity policy means we are not dependent on others to provide liquidity! On wednesday and sunday a lot of liquidity was removed, it was also a part of the death spiral.
I want to echo the sentiment that the PR damage of minting anytime soon would potentially be much more negative than the one time positive effect of burning.
Burning seems a somewhat shortsighted attempt to pump the MKR price that really isn’t necessary.
We already have a very solid reputation when it comes to low token supply, and trying to make a big PR stunt about a manual burn event could very easily attract regulators’ attention. It’s one thing to have it as a protocol mechanic (with already a very high burn ratio!), it’s another to explicitly decide to burn for PR effects.
Minting then creates again legal risk, and breaks the rule that MKR is only minted to save the protocol from insolvency. The latter could be very bad PR. With the 84k otoh, it will be a long time before we need to mint anything. You can have an “X days since MKR was minted” counter for a milder PR meme if you want one.
I’m pretty convinced that it would be better to keep the MKR to pay out retention bonuses and avoid minting for as long as possible.
This is not my motivation. I am against having so much capital. It creates incentive to spend it inefficiently.
I am against any PR stunts.
Yes, legal risk is very good con argument. Maybe exploring this further would be wise.
That’s the reason i suggested partial burn. I feel 84k is too much.
I am changing my vote to abstain. Would like to hear more arguments.
I believe you. But what matters in this case is not our motives or even the logical argument that it’s “mathematically equivalent”. For the public and initially for the regulators too.
What matters is perception.
Haven’t voted yet. Still considering the arguments for and against. However: our primary goal surely has to be the long-term sustainability of MakerDAO/stability of Dai. I’m not sure whether burning meaningfully serves this, though I agree that minting (a related question) would be a very bad look.
Is there a priority in the Surplus Buffer? I.e. are we happy that it’s filling fast enough for where we’re at right now and could be in the near future.
While I’m very impressed with how Liq2.0 performed, I think the severity of the recent crash and the strain on the system surprised most of us. Had Liq2.0 been rolled out a month later, or even conditions on the day been a little different (e.g. a slower bounce) things could have gone VERY differently for MakerDAO and, by extension, much of DeFi. It’s probably not an overstatement to say it could have ended it or set it back years.
So I’d say that if there’s any question the SB isn’t adequately funded, let’s get our house in order. Sell e.g. 15k MKR, fill the SB to 100 million Dai, and burn the remaining 69k. I’d hope and expect the market would recognise we’ve got our priorities right, taking care of immediate risk but proving that it won’t be something we do again by burning the rest.
I don’t know if I want any burn to take place but following your argument, it sounds like we could burn 60k tokens and still have 24k tokens available for rewards.
I voted no because I believe future mints will have a much more negative PR impact. The funds were already taken out of circulating supply when they were sent to the PauseProxy. We’ve seen how the market does not care at all about FDV, so I believe the potential positive PR impact of a large burn of funds outside the circulating supply is minimal at this point – especially if we instead introduce a meme of uncertainty about future mints on an ongoing basis, which we know will happen instead as Core Units start to vest MKR.
Having what can be perceived as a treasury I’d argue makes Maker seem less risky, and that has its positive PR implications as well. Furthermore, the community already has to make tough decisions regarding spending of surplus, so saying that there’s a risk of inefficient spending or cognitive overhead is not a risk that applies only to the MKR in the PauseProxy, but to the project in general. MKR can be minted and inefficiently spent by the community as well, so I’m not sure I follow the argument here.
Another point is that these funds actually provide flexibility as we can potentially avoid future ideological debates and contentious gridlocks around MKR minting in the community by keeping this stack of funds around. I do not think minting MKR for rewards or other opportunities in general is a topic that has been fully debated yet, so burning these funds without a proper understanding of the community sentiment regarding minting-at-will (which would be the direct consequence of burning the funds) might just put us on a path of future problems.
Therefore I argue that we should keep the MKR for now so we can at least cover the costs we know are coming, which are the CU incentives, and trust that the governance processes are strong enough to properly handle the remaining funds.
Oh man–this Signal Request reminds me why I am in Crypto–to align my own pockets, and not because this amazing technology can “bank the unbanked.” I still voted “no” because I have to stick to my moral principals. I guess, now I know why some MKR token holders lend out their tokens on AAVE and Balancer and don’t participate in Governance. It’s free market capitalist world–and you have to look out for yourself, first.
I guess what I am saying is–that burning the 84K will make feel “greedy”
Like why not use that 84K for the possibility that we might need to do a round of funding one day–or, why not buy “insurance” from Barclay’s PLC, or why not buy a Skyscraper and lease out to Barclays for 30-years. Why not incentivize the future Maker people that we will onboard to this community–the people of South & North America, Africa, East & West Europe, the Middle East, North & South Asia, and Australia/New Zealand.
I think about what Kain of SNX said about EIP-1559, that he’s not excited because it will make the price of ETH go higher (since ETH will be burned) and the young people that get into Ethereum will not be motivated to buy 0.0001% of the outstanding ETH.
Do we honestly think that if Maker goes to the MOooon a 14-year old from Argentina is going to one to join in 2026 and own 0.0001% of MKR…
Question: I think it probably should but would dispersing the 84k require an on-chain vote if there were some dire emergency or other urgent use? Whereas minting more outside of an empty SB does require on-chain voting, yes?
If there’s extra flexibility for governance, that could be a pro or con, but seems like the only major difference between burning and not to me.
(As for PR, who exactly would even know about it? Even the crypto press doesn’t know we exist)
Yes, it requires an onchain vote to send any of the MKR from the PauseProxy. In this regard it is from a technical POV similar to minting.
actually when Maker received the 84K – it was one of the few times I’ve seen Maker get from the Crypto Community.
Well this is very contentious! Good conversation so far everyone!
Thanks. This sounds like a distinction without a difference, then.
To those who want it to burn, if this is for PR, tie it to some goal that’s measurable like “for every mention of Maker on social media, we’ll burn 1 MKR” or “for every purchase with DAI at partners X, Y, Z on days A, B, C, we’ll burn 1 MKR.”
If this is really for PR, structure it to get press
Agree with all of what @wouter and @AstronautThis said. The MKR is essentially burnt anyways as its not a part of the circulating supply. I don’t really agree that there is cognitive overhead to spending these funds - I haven’t seen one formal proposal on spending any of it. The only time I hear people talking about these 84K MKR is in the context of wanting to burn it. Even if there were proposals to spend it, I trust the MKR community to come together and evaluate any proposals on their own merits.
The optics of burning it for short term PR benefits are not very good especially when we would have to turn around and mint MKR for CU retention. IMO we shouldn’t touch the MKR until our Surplus Buffer / CET1 ratio are at the level the Risk CU recommends - we are FAR below that at the moment. Let’s not forget that we have to pay CUs out of the Surplus Buffer as well. With markets as volatile as they have been, I’d prefer to not touch the Foundation MKR.
I voted no, leaning most towards Wouter and Lolike’s views. Key points from my view:
This is what I wanted to raise:
If we are below recommended levels, then isn’t there a strong case for getting the job done asap?