[Signal Request] Offboarding MATIC, COMP, AAVE, and BAL

Dumb question: But how are we paying for gas costs for oracles now? Is the Foundation still picking those up? I’m fairly certain it doesn’t come out of the current Oracles CU budget.

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For my edification, did MakerDAO and Polygon formalize this agreement anywhere, besides what was written on the forums in this topic?

Off-boarding collateral with trust issue such as MATIC is fine.

Compound low usage, ok

But Aave has 1M DAI generated, perhaps it just needs time to get more users to on-board. DeFi is still very new to majority of people. Off boarding this collateral will push people away from Maker and go to other platforms, and once people go, it’s hard to come back. I incline to have more users as a priority. Same goes with BAL.

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Thanks for the post @NikKunkel I am pleased that we are trimming some of the bloat from the system.

Currently 4 ilks - ETH-A, ETH-B, ETH-C and WBTC-A - generate 94.6% of our stability fees per makerburn. Perhaps we should look at this and think about whether WBTC-B and WBTC-C could generate some decent profit too without adding too much expense before adding new ilks that would require new oracles and other costs.

I support offboarding of these assets. COMP an AAVE users are normally using their native platforms to borrow, despite Maker offering lower rates. BAL users also prefer to farm on Balancer.

Truth be told, there is not a lot of demand for other vanilla ERC20 tokens used as collateral, plus we have few limiting factors:

  • either they are very illiquid on-chain and we can not offer high debt ceilings
  • those who are liquid and interesting are some recently hyped and heavily farmed tokens that are very risky on its own and haven’t really went through a stress test (OHM for instance)
  • Maker doesn’t offer cross collateralization, which hurts users if they need to maintain every single vault. It costs >$400 to maintain your vault right now (withdraw collateral and repay).

It is probably only LINK, UNI and YFI where we truly saw some serious demand in the past.

I think Maker should mainly focus on three categories when it comes to onboarding new crypto assets:

  • ETH and WBTC derivatives (different LR, fixed rates, stETH type of products, etc.)
  • LPs (again mostly ETH and WBTC based)
  • D3M type of modules

D3M type of modules are particularly interesting in my opinion. It is the easiest way to scale, at some cases we get other protocol’s backstop and offboarding is easiest. At Rari Capital Maker could even create a pool with its own set of rules. Of course there are also downsides to it, one is that we need to monitor them closely all the time and we start increasing Chainlink oracle dependancy.

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Maker Community,

We stand by what we had committed. We initiated the process for it a long time ago. The challenges since then were mainly around chasing the multi-sig signers given that there are a series of transactions that require to be initiated to open a vault. During this time, we have always been in touch with the Maker team; now finally we got the first step done by doing a test transfer of depositing 100,000 MATIC, 16 hours ago.

In the next few hours, we will execute the full amount transaction given the test txn is successful.

Polygon is long-term committed to supporting Maker, and DAI. There are parallel conversations from the Maker team happening with different members of the Polygon team for the growth and support of DAI, and Maker across the ecosystem. We would request the community to consider this vote because DAI liquidity is dependent on MATIC.

Still apologies for the delay, and thank you to the Maker team for supporting us at every step.

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It looks like they are up against the temporary DC. Let’s see how it goes.

It would also be great to get a breakdown of how we pay for oracle gas right now + some specifics on what the current oracle gas costs look like,

Thanks, everyone!

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That’s why my vote was NO for MATIC’s Offboard, even though this act will set a precedent when it comes to making “deals”, it doesn’t cross my mind that Polygon would want to damage their reputation with a bad action with MakerDAO.

Thank you, @sourcex, for your willingness and clarification.

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This should be enough not to offboard Matic.

Is sad to have to offboard collaterals. Are there plans to lower the costs of running oracles?

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Constantly. The previous version of the Oracles (V1) would have cost about $1.5M per Oracle per year…
Rather, I think the the solution is more getting sharded vaults on L2 online b/c Oracle costs will only be a fraction of what they are on L1.

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Yeah that sounds great :+1:

I second this. Given how much oracle gas costs seem to be informing the decisions regarding onboarding/offboarding collateral types, I think whatever clarity can be provided here (even if it’s a range) would be helpful.

I assumed the costs were covered by the Oracles CU budget…is that correct?

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I’ve mentioned this in the Governance & Risk call multiple times. Oracle Gas costs are currently not stipulated in the Oracle Core Unit budget. Although there is plenty of surplus OCU funds to do so, I don’t think it’s right to spend funds on items governance hasn’t specifically allocated budget for. I’ve been writing a MIP I hope to publish soon which will request funding from governance specifically for Oracle Gas Costs.

Right now there is a gentleman’s agreement between the OCU and the Foundation. The OCU has taken over responsibility for the costs as of August 1st, however the remnants of the Foundation are fronting these costs until the OCU can get funding from governance to retroactively pay them back. This is a relationship we hope to dissolve before the end of the year as it’s one of the last remaining items blocking the Foundation shutdown.

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Can you ballpark how much that has been from Aug 1 to now (or end of September or some other milestone)? Is there a reason why we need the Foundation to continue to bear these costs?

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There is no reason for the Foundation to continue to bear these costs, and in fact they would prefer to stop doing so as soon as possible. The only reason it’s taken this long is because I’ve been extremely busy spinning up the Oracle Core Unit. This is on the top of my priority list to get sorted at the moment, I should have the MIP out within a week.

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Thanks. Can you give us a rough estimate on what that amount is going to look like? This is an off-balance sheet item that any information would be pretty helpful to have — even if it’s just “between 3/4 and 1 million DAI” for example

Thanks in advance!

It’s not the ‘actual cost’ that matters, it’s what multiple of the actual cost needs to be held in reserve in case gas increases by an order of magnitude. Think of the peak of NFT summer where 1500 gwei transactions were the norm for almost a month. Running out of ETH and the Oracles going offline while the OCU requests more funds from governance is not a viable scenario.

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I’m referring to how much we owe the Foundation. You’re spot on that forecasting is a different beast.

But what do we need to make the Foundation whole on what they’ve spent since Aug 1?

Hey @NikKunkel, how long are you intending to keep this signal open for? Need to get an ending date added to the post so we can figure out the Governance cycle for it and so the people voting can be aware.

To those who voted to off-board MATIC:

In the last few days the MATIC vault has accrued 8.9 million DAI of debt, earning 267k of annual income (vs. historical $150k annual oracle cost).

If you voted to off-board before this occurred, you may wish to re-consider.

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