I wanted to comment on the concerns that you brought up Rune. I am struggling make sense of your most recent response:
Perhaps we can get past the hand waving and work on understanding what exactly these risks are together. Centrifuge & AEA has shown readiness throughout this entire process to engage with the DAO and talk about how this deal is structured.
As for the structure you talk about earlier in the thread, I want to respond with the following: We hear you and think we understand your concerns. We started together on this RWA journey when no one thought it was possible. We’ve shown that we can and want to work on improvements with the DAO to build out a safe legal framework for Centrifuge issuers, as well as our Investors including MakerDAO, to mint DAI and bring valuable collateral to MakerDAO.
Our success with the first RWA Maker vaults is attracting more professional and established borrowers to DeFi and MakerDAO (e.g. Nebula & Monachil), and also arguably created positive externalities in terms of PR and others.
Nevertheless, these early pioneers were doing the first transactions back when DAI was +/- 1% off the peg and they were +12mo into waiting for Maker to even figure out how to do a RWA collateral onboarding process with them. These startups had the confidence to try DeFi, Maker, and Centrifuge in the early days and paved the way for larger MIP6s both from partners using Centrifuge and others. I think this is aligned with the RWF CU strategy to focus on fewer but bigger RWA vaults, and partners who can provide scale.
But how do we want to treat our early partners who trusted us to be able to prove that DeFi is not only working for the big shops but everyone? We think we have a moral commitment to creating something, which is not only cheaper but also better (much like Rune’s call to positively impact the environment by focusing on green assets). And to follow through on the plans we put in motion.
First of all there is no Centrifuge structure. Centrifuge is a decentralized protocol to onboard assets, like a farm, as an NFT and have the entire fund administration on-chain. Fully transparent and including a first loss protection in form of the TIN tokens. The on chain tokenization framework is coupled with a legal framework that the issuers set up to ensure there is legal recourse. When we proposed MIP22 we made certain trade offs (much like single collateral DAI made tradeoffs to ship before MCD was fully matured over a year later).
However, Centrifuge and all issuers using Centrifuge smart contracts I believe have proven to the community a readiness to keep working on it and work on this together. None of us think that the work stops here and in fact its still in going on. We have already made substantial progress and have a clear roadmap going forward:
- In the case of P1-DROP (as well as the other RWAs), AEA (the Issuer) had already improved the independent manager arrangement ensuring better bankruptcy remoteness.
- AEA are well into discussions with 3rd party providers, who will act as fund administrators adding another layer of oversight.
- A third step is to engage a trustee for the assets. These improvements will be made in the coming weeks.
- We are currently discussing how to give DROP a security interest in the underlying assets, which will take a little longer. The RWF CU is involved here and we have a good way forward.
- Ultimately though, the RWF CU made a lot of progress with MIP58 RWA Foundations (MIP58: RWA Foundations) to give the DAO a direct claim and enforceability, and to address possible tax issues. At this point there will be slight structural differences between 6S trust setup and the setup that Centrifuge Issuers are employing but will offer similar protections to DAI & MKR holders.
From our side, we are going to put more effort into communicating the progress on this roadmap more actively with the community and will start posting regular updates in the forum.
We are fully aligned here: no one is proposing raising any of the debt ceilings beyond a point that becomes a true threat for Maker and not scaling this up until more progress has been made on the above roadmap. Speaking as an MKR holder and long time community member myself, I would never support taking on risk that could irreparably damage both Maker & Centrifuge.
I also wanted to second Seb & Prose’s offer of setting up a call where we can discuss these issues:
I believe these are issues we can work through without destroying a year long project and endangering the reputation of the DAO.
Thanks for your comments MakerMan overall. I wanted to address this one in particular though: I can tell you that we are talking to debt investors who have issued securities in the billions and are looking at the work we’ve been doing with Maker. And some of them are looking at how they could tap into Maker themselves. We should see these conversations come to the public forum soon.