Exactly what @someone said. I don’t think the surplus buffer is going anywhere. It just changes what the protocol does with the excess of DAI over it.
Wouldn’t the DSR already be funded by the stability fee from the vault that originated the DAI? If so, why do we need a rate equal to the DSR on the new, MKR-backed loan within the Sagittarius Engine? Couldn’t we have an interest rate of 0? Or do we need a positive interest rate to ensure it’s considered a loan and not a dividend?
I like this a lot, but why ‘borrow’? It should be a dividend which I have all rights to have and spend (and never return):
The above image, from makerburn even shows the P/E as if this was indeed a dividend, corresponding to 1.49% of the value of each MKR.
is not huge for crypto, but it is a real profit working today (without farming, or other tricks) and would ground the current price of 1MKR = 2500 USD on a solid reality.
My intuition: We should allow a MKR holder to either,
- get out their share of DAI (1.49%/year, as of today) when they want, or
- not get it out, but somehow borrow with leverage (i.e., more than their share of 1.49%) by locking their MKR, as in the SE idea of rune.
Both options should be allowed.
Actually, that’s not true. We are expanding the surplus buffer (mainly) so we can lend more while keeping the same risk profile. And most of the Surplus Buffer is accrued interests on loans not yet repaid.
Sagittarius Engine or Surplus Buffer, it’s all MKR equity. I used the 55M of the SB as it’s the only capital we have yet.
@rune A purpose and path forward, here is what was missing for Maker. We were becoming too bank-like but without a goal. Thanks for making the effort putting this forward. Count on me for joining the part with strategic execution. Living in one of the “resilient places” on earth, I take that as a personal duty to assist in the transition for the rest of the earth.
When I said “profits”, I wasn’t including the Surplus Buffer; I view the Surplus Buffer as essential operational funds, not profits. I meant only DAI being diverted to the flapper as “profits”.
Do you consider funds that are currently being burned as “equity” for MakerDAO? Or if MIP 49 had passed, would you consider the rewards that were distributed to MKR holders as equity for MakerDAO?
My read is that the Sagittarius Engine is an alternative to those two as profit distribution mechanisms; and so is categorically different than the Surplus Buffer, which are funds that the DAO (not individual holders) still controls.
It feels to me like this would introduce an issue of fungibility between MKR that have withdrawn funds and those which haven’t; or, at least, it would introduce a challenging accounting problem.
Instead, I would prefer to reduce the interest rate on the MKR-backed SE “loan” to 0, unless there’s a legal reason not to.
Ok I understand. I’m in favor to use the profit to increase the capital stack of MakerDAO so we can grow our lending, any alternative is bad for growth. But assuming we have to “distribute” those profits, I fail to value Sagittarius Engine significantly. You get an MKR-based free loan of what would otherwise be a dividend. After 3% years, I can either borrow 5% of my MKR value (assuming current profitability and price) or get 5% in DAI.
Maybe it’s a way to get non-taxable dividends?
at first i thought this too xD, but even if you dont believe in climate change and all that stuff(i dont), you cant deny that most of people around us do believe and care about that kind of stuff, thats what put tesla where it is right now for example, so i dont believe in global warming but i do like this idea of positioning mkr as an organization that is trying to save the world lol, but then marketing is gonna be really really important here, and he is not talking a lot about marketing here, in my opinion it doesnt make much sense to support all this green causes if you are not gonna advertise it as good as tesla does for example
Fully agree. I didn’t touch on it much in the post but it is a critical piece of the plan that we should begin to ramp up real world marketing to onboard new people into crypto through Dai and MKR.
If we have a low, but decent DSR, and we have the infrastructure and real world examples in place that proves money placed in Dai helps finance the sustainable revolution, we have met the conditions for a high powered real world and online marketing campaign positioning Dai as better money that provides the user with a lot of benefits, while also doing their part for the future.
Additionally we can market MKR as a more exotic crypto asset that has significant utility because it provides access to extremely cheap, decentralized credit and is exposed to the success of Dai - and buying MKR is an even better way for someone to play a big part in trying to turn around the system towards sustainability, and even means you can get rare NFTs for doing so.
This marketing should IMO initially focus particularly on the climate resilient, english speaking countries like Canada, Ireland, UK, Australia and NZ, as well as the rest of europe. We should avoid the US both to avoid their regulatory aggression, but also because the US is pretty much the only place in the world with climate change deniers in 2021 lol.
I believe that if we are ready to significantly increase the budgets of the core unit bureaucracy to also include structures for self-optimizing checks and balances, we will be able to launch massive marketing campaigns that are both aligned when it comes to brand and messaging, but are parallelizable and highly scalable all thanks to the potential of the Core Unit bureaucracy that the community has bootstrapped.
The case for the Ocean Economy! Expected to grow to $3Trillion by 2030: Ocean Economy
From Alt-seafood to Marine-Renewable Energy. After all, the Ocean makes up more than 70% of the planet’s surface
There is definitely a lot to unpack. Coming from the social impact community, I think it is really difficult for one community to move the needle on the Climate Change cause. However, taking the essence of what’s proposed, the real impact and needle for change this community can push is to lay the financial infrastructure for a system that’s more aligned with sustainability of the planet. The real impact here is the systemic change of this community and an influence on how people within this community make decision to support things beyond their own finance. Maybe also lowering the barrier for people to support other projects outside the crypto ecosystem and relevant to social goods.
Much more on the way from us as well: solar development pipeline of more than 1 Gigawatt, industrial real estate (i.e. warehouses) solar retrofitting, single family homes renewable retrofitting (reduces electricity bills up to 100% + increases home values), and climate impact/carbon offset tokens.
The US Department of Energy estimates that approximately 39 percent of the total energy consumed in the United States comes from the residential and commercial real estate sectors. The aforementioned is just a part of our plan to combat climate change via multiple investment strategies and initiatives. We appreciate Maker’s support in all that we are doing.
“The amount of sunlight that strikes the earth’s surface in 1.5 hours is enough to handle the entire world’s energy consumption for a full year.” - U.S. Department of Energy
I’m really excited about what I read, I learned, Rune, you are a great man!
thanks for that lol at the end, i deserved it xD , but im sorry, im going to be more respectful from now on
List of periods and events in climate history - Wikipedia : i dont believe that any amount of money could have stopped these events from happening
i have always thought that everything is cyclical, in our lives, in nature, the universe, etc. nothing works the same way forever, things change, for balance i guess
i shouldnt have used that list of events to support my thesis, because i dont believe that there is a
way to accurately tell what the temperature was 200+ years ago, and the further into the past we go, the more it becomes a guessing game
is there irrefutable evidence that can prove that the world is warming up at a pace never seen before?
i doubt it
so i do believe that climate is changing, but i doubt that theres anything that we can do to stop it, its just this planet’s cycle happening before our eyes, and we are nervous about it, and we believe that theres something that we should do about it
why do we belive that we have to do something about it? i guess that we are afraid, we dont want our current living conditions to change, what i believe is going to happen is that we are going to adapt to these changes in temperature, but the timespans are going to be so wide, that no one is going to notice that the living conditions are changing
that said, i do belive that humanity (not earth) needs to be saved from things like air and water pollution this kind of things need to be worked on because this is the kind of stuff that is already killing us, and that is already killing millions of animals every year, the problem is that we can not profit out of this, so i dont know why did i bring this up xD
so yes, i dont believe that this planet needs to be saved, but i do believe that marketing MAKER as a “green organization” will make DAI one of the most beloved currencies in the world, and therefore a resillient currency and organization
Irrefutable evidence is a poor metric in practical situations but there is very reasonable evidence. The most succinct and convincing is probably xkcd: Earth Temperature Timeline
I think the vision is great , but product market fit is unclear , and opposite the new tokenomics because too complex and may not works . the tokenomis part I replyed in: Sagittarius Engine - #9 by dalin
just my point view on the Clean Money Vision:
- It is big market opportunity , will big part of the 1T Dai roadmap .
- at the product market fit part , Maker’s competitive strength is low lending rate , it is the primary force to grow in high interest crypto world . so the unclear part is what’s the competitors and how to win . The real word interest is very low in developed countries , what is the competitive edge of Maker set up .
- the missing part is how to level up the competitive strength in crypto world . crypto world is Maker’s primary market , need more product innovations . imagine if Maker swap the 3B usdc to ETH under protocol control , that will be great business model : deposit eth loan dai → buy dai with eth . it is more like central bank works .
I was planning to read back a bit more but when I thought about this from a conceptual point of view. While Maker can try to accomplish the goals of this vision even if Maker grew to 1T it would not have enough oomph to carry it out.
Literally global warming - or as I personally like to reframe the entire question - GLOBAL SUSTAINABILITY on all fronts (from energy, to mass, to species/life) is the real issue. There are a lot of contributors to this but in the end it is a sheer lack of ability for people via governments to agree about anything, and corporations which have for the most part free reign to ‘profit’ however they see fit without any concern for the planet and the life upon it. Do I honestly see Maker doing better here? Not yet. It is one of many DAOs scraping for income to survive much less thrive and achieve.
I feel like if Maker could do ONE thing to improve the situation it would be to focus on a long game of financial sustainability, achieve the goal somewhat put forward as a statement of systemic failure of the current financial system by S. Nakimoto in the Bitcoin genesis block that started blockchain technology:
"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"
Let this settle in for a while.
To date Maker in its desire to grow is basically being forced to take on the mantle of the old financial system - so it can interface with ‘the world’ vs. creating a new better world within crypto that the rest of the world has to come to.
Global warming? Honestly If there was one thing I would like to see Maker take on is DAI and the Maker system being focused on becoming the most sound and solid financial instrument on the planet, used for all transactions big and small on all networks. If we can once and for all solve the problem posed by S. Nakimoto with the statement in his genesis block then perhaps we can finally begin to approach some of the larger issues like global sustainability from earth to sky and everything in between.
I really don’t want to get into a climate change debate because I honestly don’t see that a solution to global warming is going to change the fact that the decline in species is pretty much on par with the last extinction event. The earth too will survive all of these things like it has done in the past, the question is whether people will or not. What I have found of interest is that no-one talks about isn’t whether global warming will tip the climate cycle into another mode but whether even 1-2C can stave off the next ice age because as I read the geologic record the earth is fabulously good at sinking carbon once released. Hence why the glaciation record is growing longer and deeper into colder temps with interglacials. When people talk about this they tend to focus on the sustainability (or lack thereof) of what we are doing now and focus exclusively on ‘climate change’ when in reality the long view here is that higher earth temps would be good, but probably are not sustainable with increased carbon emissions (unless we can sustain those). Higher carbon in the atmosphere also has ancillary benefit of faster plant growth. Anyone who reads back to the 1600’s knows that the sun going blank for 80 or so years caused massive crop failures due to the shortened growing season due to lower earth temps (correlation or causation?). Surely these points will still be something people disagree on but the reports are pretty clear - cold earth meant famine. Just like whether what humans are doing in total is sustainable long term. In almost every country, and even in this chat we will see our own divisions regarding fact leading to opinion are divided. I personally look to what can be practically achieved or being achievable, others want a vision even if it isn’t practically achievable to drive them. Yet another will have a different view.
The hardest thing to do is to nurture consensus, the easiest thing is for one person to do is to destroy the consensus of many.
My opinion is that almost all of human kinds endeavors are likely on a unsustainable trajectories. There are many things I would like to see, but a planet covered in ice and one that is a desert isn’t really what I was hoping for. For quite some time I considered the greatest threat to humanity wasn’t global warming but something (Perhaps in the sun) changes so the earth begins to cool again and there will be nothing we can do about this except bundle up and learn how to live in the ice. By then we probably will have to have our other sustainability issues figured out one way or another or we would just go back to old ways with our technology buried while we live as caveman for someone in the next interglacial to discover and wonder about how we could lose so much so quickly.
If I had a simple vision for Maker it would be:
“DAI and the Maker system being focused on becoming the most sound and solid financial instrument on the planet, used for all transactions big and small on all networks.”
Lets start there. I am all for entertaining any and all proposals that support the above. I would even support a CU visionary team to discuss long term vision for Maker that includes global sustainability as a core goal.
Sustainability and Stakeholder recognition in every endeavor are core components of my own delegate platform.
BTW: If there is any doubt the earth is cooling over the past 5M years.
I don’t have much time tonight so just want to say thanks for the comments, and just add a few points:
Can we do anything about climate change? Man made climate change is absolutely certain. The 30k scientists in the IPCC + all the 200 national governments in the world (including oil countries like saudi arabia) + all oil companies in the world all agree on this and agree with the trajectories spelled out by the extremely well researched IPCC assesments.
Can we do anything to stop it? No probably not. I think at this point we are past “saving the world” and at the “saving what’s left” stage
Let me repost this picture from above:
Some of the most pessimistic estimates that both consider our current trajectory (which is exceeding RCP 8.5) and then consider extreme exponential feedback loops (like methane clathrates etc) say that 4 degrees by 2060 isn’t impossible. If that’s the case then yes, there is nothing we can do. Even 1 trillion tomorrow wouldn’t be able to stop an irreversible change of the world, only change how bad it gets. Personally, I don’t think it will get that bad but I do think it will get very, very bad, and the world as we know it will basically collapse.
So with that in mind, if we assume that there is a high likelihood that the climate change has already crossed the point of no return in terms of being catastrophic, this is where the climate alpha comes in. We need to create a currency that is backed by real estate and business activity in the green areas on that map, because that will be the type of currency the future will demand. (Obviously im not advocating literally using that map to guide our collateral strategy but in practice it is possible to find strong research about which areas will be resilient in a climate collapse, such as the recent paper referenced here https://www.theweek.co.uk/climate-change/953660/best-places-to-survive-collapse-of-society
It’s kind of a hedging strategy to both do sustainability AND resilience. If we succeed with sustainability and the world is saved, maker will have played a part of saving the world and through this will have earned us a political right to exist.
If the world doesn’t succeed so well, and there is partial collapse, then we end up as the only currency that is backed by a diversified basket of the few good areas that remain. Just using NZD or CAD won’t be as good, because you never know which of these areas will get wiped out by war. You need diversified exposure, and that’s what we can provide and market to people.
Initially people will probably care more about the sustainability because they are more looking for hope. Then over time, as things get more serious, people will instead be looking for resilience. By beginning to do both in parallel now, we will have something that is incredibly congruent with any of the possible trajectories the world will take.
Encouraged to see some skepticism amongst an avalanche of rosiness. For some credible balance to this ill-informed green idealism please see books by climate activists Stephen Koonin Michael Shellenberger and others. There is much more to the story than what is told by the fear inducing powers that be. Only if we are all clearly informed by the facts will there be any chance of a positive response to global warming.