Some random thoughts and concerns

Hello, this is my first post on this forum, but I have been reading for while :slight_smile:
I am known as “iammeeoh” on the MakerChat.
I have not affiliation whatsoever with the Foundation. I am just a community member and a (very) small MKR holder.

I was asked by a community member (LongForWisdom) to write down some of the comments I typed today in the chat, to improve readability, and there we go!

I want to express general concerns about the status of the governance in the last few months.
Specifically, about the Governance & Risk calls, and the roadmap to MCD.

Point 1) The content/length ratio of the calls is, in my opinion, very low.
In other words I have the feeling that often people deliberately “talk about nothing”.

This is far from an accusation or a negative feeling towards anybody. It’s just how I see the episodes.
For example, from the last call, the first 20 minutes (Rich and cyrus) can by summarised without any loss
of information with the following two lines:

  • it was important to decide how to vote on the shortlist of 7 tokens, done on the forum with 3 options.
  • we need a short list so we can focus on some specific tokens, because each token will require a lot of time. Vote should happen next week.

Point 2) At the same time, the participation seems very low: e.g., 21 people voted on the last poll on the forum, just a few people watch the youtube videos (accordingly with Youtube data), etc.

Point 3) Having few people (but committed and well educated!) in the governance could actually be a good thing. Faster and better development.

However, to the contrary, I have the impression that the discussion proceeds in an extremely slow way. For example, a blog post (https://blog.makerdao.com/multi-collateral-dai-collateral-types/) on the 27th of June announced a vote on some collateral, for discussion.

This vote got delayed about two weeks for technical issues.

Then there was a forum poll to decide how to properly phrase the questions

Then the vote should finally happen next week.

All of this for what will just be a way to discover interest and sentiment among MKR holders. I.e., the vote is not committal in any way.

Did we really need almost 2 months to vote on this? Given that the (active/voting) community is extremely small, wouldn’t a poll in the forum just do the job more quickly?

Also there are some aspect I don’t really understand. “We” decided to spend time voting on how to properly phrase the questions, but the lot of 7 ERC20 tokens has been decided unilaterally by the Foundation.

Point 4) Regarding progress towards MCD, and the selection of collateral. Cyrus clearly said that it will be a long and difficult process. I don’t doubt that but:

  • what about contacting academics and people from economics/finance (PhD, postdocs, etc, surely interested in the project)

  • what about producing a template and asking directly to other Crypto project with large ICOs (e.g., BAT, Golem, CIVIC, DGD, among many others) to do their own scientific analysis in order to be added to MakerDAO? Why do everything “in house”?

  • Is it really necessary to spend months on this? As discussed in this forum, most people agree anyway on launching MCD with ETH as principal collateral and a few other ERC20 included with VERY-VERY-SAFE parameters. These parameters can always be adjusted with time and demand.

  • Without having any informations on the release date of MCD, is it really worth analysis a token like, e.g. BAT, in mid 2019 when at MCD release (for example late 2020) its ecosystem might have completely changed/disappeared/boomed?

Point 5) All in all, I have the feeling that in the last few months, after the peg-emergency solve, we have just “bought time”. It’s like “playing the DAO” when in fact the real action is elsewhere.

Things that are critical and not discussed enough are, for instance:

  • Status of MCD: it’s obviously important to understand if we should expect MCD for 2019, 2020 or 2021. The landscape is going to change.

  • MCD and KYC: how will MCD deal with KYC requirements, if any? We have no idea (as far as I could follow in discussions in chat and reddit)

  • Status of the Foundation and its partners: what is the involvement of the partners, like a16z ? Last year you devoted a few governance calls explaining “how amazing” this partnership is/was. What have they done for MakerDAO (not for the Foundation) so far? What do they thing? What do they like, don’t like? When will they start to participate to the governance?

This is very important, more (IMHO) than the risk evaluation of a token like BAT having 1% of marketcap of ETH and (likely) higher risk profile.

Similarly, will MCD use centralised stablecoins?: do we plan to include USDC or not, for example? What does CoinBase say about that?

  • Quoting: “The Foundation is dedicated to radical transparency. We want to give the community information as it comes. The problem is that there are a lot of moving pieces and because of that making predictions about release dates and other time-specific information is hard. We can do our best, but the expectations need to be set accordingly. We will soon be posting some dates about things that will need to happen pre-MCD launch, and it is important to understand that this information is subject to change: dates will be moved, things may be removed or added, etc.”

where is the radical transparency?

Point 6) To conclude, after the purple-pill drama a few months ago, those of us who accepted to stay around have implicitly accepted a more “authoritarian” lead of MakerDAO via the MakerDao Foundation. So I am not complaining about this. But the narrative was that, by cutting a lot of side-activities and focusing on the key tasks, with a clear leadership (Rune), the development would accelerate and efficiency would increase.

I frankly can’t see that at the moment, and I still have no idea on when MCD could be delivered, nor I have any idea of how the institutional investors around it are moving/preparing.

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Thanks for moving your comments to here from chat.

I agree about the signal to noise ratio of the governance and risk calls. I enjoy the weekly community call, but the governance and risk calls seem extremely tedious. I generally skip them.

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Great comments. Thanks for sharing them. I think your head is in the right place here.

Having people who stand to gain from a positive “scientific analysis” do the analysis presents a misalignment of incentives. It’s better if those with skin the Maker game do it.

I really hope the developers aren’t foolish enough to try to make KYC a core part of the design. Regulatory concerns should be handled on the front-end rather than in the smart contracts. Doing otherwise would likely be a death knell for Maker in my opinion.

Indeed.

On the contrary, it seems Rune’s overreaction to the purple pillers and the corporatization of the project has lead to a brain drain. I’ve heard there have been a lot of people leaving, particularly among the old guard. Honestly, the Foundation itself seems like the biggest threat to the project right now. If I’m wrong, maybe some “radical transparency” would help me see my error.

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I only partially agree with you. I think parts of meetings are very useful, sometimes things drag a little, but i have this feeling practically on every meeting (at work or “real” life). Do you ever just read transcript or (especially) summaries by DavidU on github? They are posted quickly and would save you a lot of time.

I think discussing meeting purpose, format, agenda… - it’s probably worth opening separate forum topic.

TLDR:

  • Risk really needs to get concrete about what to expect and when because it feels like this has been going in circles for at least a month now.
  • I really have a hard time finding a way to put this friendly but … claiming to be committed to “radical transparency”, really?!

The last call really wasn’t all that good but that was mainly due to the risk part IMO. I understand Rich has to try and find a balance between talking to new people and regulars which is really hard and I don’t mind it. Vishesh and Chris also had interesting info.

The risk part on the other-hand was just filler. I hope this is because we are on or close to a turning point in the whole project because we really don’t need more calls like this. I can’t even recall anymore how long this “risk framework” has been promised now. Expectation management towards the community in this regard is seriously lacking here. It becomes more confusing every week about what to actually expect from risk. Also it was the first time that I actually heard Cyrus say that there is essentially 1 risk team and it consists of only 3 people (Cyrus, Primoz, Vishesh). Why are there only 3 people working on this — crucial part of MCD — at this point? Where are these other “risk teams” supposed to come from and when? I see very little (marketing) activity in trying to get people in this space?

But the thing that absolutely triggers me is using the term “radical transparency”. I appreciate the fact that there are a lot of complexities, technical, legal, even personal, … but since when is showing the tip of the iceberg, “radical transparency”? Announcing you will communicate dates, with a disclaimer that they will change is not “radical transparency”, it’s a non-committing roadmap, nothing more, nothing less. “Radical transparency” has to go for everything or it’s not and I don’t think I need to convince anyone that there is very little transparency about a lot of things. There may be good reasons for that non-transparency but that doesn’t change the fact that you can’t use this term. Do I think the foundation means well, yes … is it transparent, not even close.

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Regarding radical transparency, I like to link to Aaron Dignan’s talk at Google https://www.youtube.com/watch?v=uOiP4mJwqE0

@ anonymoose

Regarding the “misalignment of incentives” this should not be a scientific concern.

Microsoft could very well try to publish a paper claiming that F# is the best programming language in the universe. They will probably make a couple of good points (always useful) but also fail to convince completely the majority of the programming/research community right?

The general idea is that: more paper is better than few paper! Some papers are mediocre, or even bad, but can still provide some interesting points.

I think doing everything “in house” is definitely a problem. Especially if this “house” consist of very few people, not a real research/scientific community.

Sidenote on research: for a scientific community to exist, its members must have an incentive to work, one way or another. My best estimate is that the major currency in the paper writing industry is prestige, and depending on the health of the field it can be the only currency. The research we want around here is a) focused on a practical goal, and b) destined to be repackaged for voters to digest. Structures other than the traditional paper-based research one will probably fit best. It seems ethresear.ch is productive. distill.pub is also inspiring. Ingredients for creating disruptive research teams from the effective altruism forum should also be useful – just the summary at the top alone is valuable.

Anyway maybe that part of the discussion should move to its own thread.

Responding to the core of your initial post, I partially agree with @kwadrax. In particular expectations should be better managed (downward). One may think “none of this will matter once MCD is released, so why bother?”, but I try to take the long view and I think that the Maker community (and as part of it the Foundation) having a history of not only being but appearing reliable, consistent, conservative in its claims and forthright will be immensely valuable.

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It would be great to separate out some of these points into their own threads for discussion. Meoh’s points are a great starting point, but yeah, I think having a place to discuss what a scientific and research community looks like in MakerDAO would be valuable.

Swayka, you seem to have some valuable thoughts there, do you want to spin up that discussion, and maybe summarise what you think makes the organisations you linked effective?

@swakya

You are right that Prestige is the N1 currency in the paper-writing industry, which is 99% academia, because it often leads to a good career.

However in the the ICO world, many ICOs companies are actually struggling to “prove” their seriousness, and in fact need some kind of “prestige” or “scientific credibility”. For this reason they might be willing to invest some of their resources to pursue some scientific investigation (and often they have directly links with academics).

The following article (published by the Brave company) is an example:

It is definitely not a 100% “pure truth” article. But it contains some science, or at least some scientific claims. I am sure the big ICOs, if challenged in the appropriate way, would be more than happy to participate to some scientific investigation regarding their token.

TLDR: Prestige is often the main currency in paper-publishing, yes. But ICOs companies have lots of money and need prestige, so might be quite helpful in providing some scientific work.

Alright, I’ve got some time so I’ll respond to points and add my thoughts here.

100% Agree that the signal/noise ration is low, and could be improved. That said, it’s important to remember that there is also a very necessary social component to the governance calls. They are are a place where members of the community can feel free to ask questions and to engage with the prominent figures in the Foundation, this is usually ‘noise’ but I believe it is still valuable at driving engagement and participation.

Yep, participation is low across the board, both in calls and in polling on the forum and on-chain. This is something we all need to work to improve. I have some thoughts on this that I’ll write up at some point.

I agree, it was and is slow. There are two additional aspects that I found annoying, first that the foundation gave a date, and then failed to meet it. This happens all the time, and is fine. The problem is that there is no consistency. We don’t get dates for MCD because no one wants to over-promise, fine. If the policy is ‘don’t give dates’, then don’t. But if that is your policy, you need to make damn sure you hit the few dates that you do share.

The second is that despite the forum poll to properly frame the online poll, we didn’t even manage to achieve any meaningful consensus. We had a plurality of 43%, which is rubbish because it potentially leaves a majority unsatisfied with the outcome. In my view this was time-wasted (the foundation is not explicitly to blame for this, as a community we should have made better use of the polling time)

In my view efficiency of governance is always going to be the hardest challenge to overcome for any DAO.

In my view, yes, this is worth it. We need a solid risk framework to apply to all collateral assets. While we could launch MCD with ‘very safe’ parameters, it rather defeats the point of launching it. The asset packages won’t be attractive until we can properly define the risk parameters. I also think it’s important to remember that collateral evaluations aren’t holding up launch, that is the aim behind the prioritisation: to work on prioritised assets first, and launch with those that we have parameters for by the time the engineering work and security audits are complete for the smart-contracts.

Yeah, I feel this too, and it is disheartening. We are ‘playing the DAO’ at this stage, the Foundation claims to be working towards gradual decentralization and personally I believe that they are doing this in good faith. As things stand I don’t think we are at a point where the DAO can support the development or even day-to-day operations of the DSS.

Agree that this term is not applicable, at least up to this point.

I’m not sure that was really the narrative that was pushed? The Foundation was largely quiet on the entire matter. Without transparency it’s difficult to see how efficiently the Foundation is working. It’s safe to say that there is far more going into MCD than is readily apparent to us outside though.


The root of these issues comes down to a simple question: ‘Is the Maker Foundation acting in good faith to develop the DSS and turn over control to the MakerDAO?’ or even more simply: ‘Can we trust the Foundation?’

Currently, I believe the answer to those questions are yes. I’ve seen nothing that convinces me that the Foundation has betrayed that trust, and so I’m not overly concerned at a perceived lack of progress.

That said, I will keep watching and judging, as will everyone else within MakerDAO.

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I also dislike the term ‘radical transparency’. What does it even suppose to mean?

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I usually read the forum, reddit and chat but I have to say that I created a forum account to say that i agree with much of this

Going deeper into governance participation, just thinking out loud, the whole financial incentive of governance is the mkr token appreciation, token appreciation is only usefull once sold if not it´s paper gains.
What I´m trying to state is that perhaps the whole “token appreciation” metric to induce governance is simply not enough, people who invest or most of them have other tasks to worry about, work, family, etc, most of them are not “full crypto”.
If you allocate a part of your time to do responsible governance there must be a trade off that if it resumes in “token appreciation” perhaps it´s a little too intangible to some or at a glance of the low turnover most.
Just thinking of the incentives to get further participation, time, research of people into the project, further down the line if it effectively becomes a DAO what will the incentives behind the non-foundation people to work for? Not lose their investment? If that´s the incentive what will their incentive be to keep the investment? This are all wild thoughts outloud from my office, would be great to hear counter arguments

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Realistically I think the incentives mainly align for institutions rather than individuals (beyond extra motivated folk). It doesn’t lend itself to decentralization, but academic, financial and governmental institutions have the resources/brainpower to commit to a demanding governance structure. The amount of mkr they can afford makes worthwhile to allocate resources for the protocols integrity.