[Signal Request] Offboard unprofitable collateral types

Depends on gas costs. I think Nik has suggested a 200k-300k/year ballpark figure unless the Oracle for that asset is already being used (like for an LP pair)

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Is that an accurate accountantcy, I think you deserve better :slight_smile: .

I believe this year was a special year. Do they have addresses from where the transactions are sent?

Also, it is not because gas wasn’t cheap and the oracle not optimized that should be the norm.

Thanks for sharing. I guess when gas price skyrockets, it indeed can be quite expensive

Hopefully Optimism and/or Arbitrum allows vaults a lower break-even point for customers and Maker itself.

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But going back to it, I definitely think especially for more DeFi tokens, might make sense to suggest them to use their treasury token as collateral to mint Dai similar to what YFI team is doing. Increase in revenue, more diverse collateral, more efficient use of treasury, everyone is happy (in theory)

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This was a full round of ‘Abstain’ for me.
Before offboarding collateral types, after all the hard work of first onboarding them, I would very much prefer to see a cost breakdown with the gas cost included. Prior to that we do not really have any data to go by. Also we could maybe refer edge-cases to Risk and see if the collateral type could have a lower debt ceiling in exchange for more beneficial Vault parameters.

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Is gas cost the primary reason for them being uneconomical due to oracle updates?

As I pointed out in the past Maker should not even think about onboarding collateral that can’t generate more than 50K/yr in fees when something like 2% of the Market Cap is deposited (getting 10% of any coin is unlikely imo). This means coins that have at least 50M caps and ideally we want stuff like 500M and above.

We want to start at the top and work our way down was ignored and here we are - basing getting rid of things based on oracle costs and completely ignoring the other costs associated with bringing these on. Really want to urge Core groups to focus on the low hanging fruit vs. just going after everything as manpower is limited.

While I won’t touch USDT with 10 ft pole personally I don’t think MKR ever gave USDT a fair chance at a 8% SF. Up the LR and reduce the SF and see if we can capture any part of that huge market.

I pretty much said YES dump everything except ZRX and USDT for above reason. I don’t know why I think ZRX should stick around vs. AAVE or BAL. So if I were to be consistent I’d say dump ZRX and see if anything can be done with USDT to get some activity. I have felt since the beginning USDT with the high fees would never get a single deposit.

Thanks everybody for participating in this Signal Request. I will prepare onchain polls for all ilks that got offboarding-support.

The polls will very likely go live on 2021-06-20T22:00:00Z, I will update here accordingly.

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The corresponding onchain poll is now live in the voting portal. The poll will run until 2021-06-24T16:00:00Z - please participate there.

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@NikKunkel @lollike is this data point (i.e. oracle gas expense) captured on-chain in the graph?

small update: the onchain poll got approval with ~ 9k MKR in favour and ~3.5k MKR against it.

there is no further immediate onchain activity happening for now - there will be another onchain poll for the proposal crafted by the mandated actors.

thanks everybody for partipating here!

As part of the off-boarding process, @Growth-Core-Unit will be reaching out to the issuers of the tokens we plan to offboard. We want to explain the situation, get feedback and understand why they or their token holders are not using the Vaults and try to convince them to open a vault to use the remaining debt during the next 30 days.

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We have been reaching out over the past two months to the projects issuers of the tokens that could be offboarded (KNC, LRC, ZRX, BAT, MANA), and we got responses from four of them:

  • Kyber (KNC): they are not interested in opening a vault to take the remaining debt.
  • Loopring (LRC): the team is using the vault, and also during late Q4, they will launch EthPort, which will provide cheap L2-L1 composability. This will allow users to interact with Maker directly from Loopring L2. Once integrated, LRC holders (as well as ETH, USDC, and WBTC) would be able to open a Maker vault, increasing LRC vault usage.
  • Brave (BAT): we are still in conversations with the Brave team. They are interested in maintaining BAT as collateral but are defining the best way to use Maker Vaults because the BAT in their treasury is used to support the brave campaigns
  • Decentraland (MANA): In the following days, DCL Foundation will open a 1M MANA vault, and we are discussing with the Decentralan team how we could improve this vault usage

Our suggestion is that we should not offboard the LRC, BAT, and MANA tokens as collateral. Their teams have shown great interest in working together to find strategies to increase vault usage. The Loopring and the Decentraland team opened (or will open in the following days) a vault to show the Maker Community they want to use Maker Vaults.

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I think this happened today

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Ya the Decentraland team is relentless–they have been supportive of DAI for a long-time in crypto years

I believe Kyber has been having success with their own incentive program so I totally get why they are not interested.

TY to the Growth CU team for reaching out to these protocols–it provides the community food for thought

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This has been superseded by this more specific signal request: [Signal Request] Offboard MANA, BAT, ZRX, LRC, UNIV2-LINKETH and UNIV2-AAVEETH. Given we’re already offboarding KNC and there is a good chance we’ll end up offboarding more, I’ll mark this as Accepted.

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