Vault Compensation Plan Proposal

Hi All,

Thanks very much for everyone’s patience while we worked on getting this plan together. I have copied the plan document below and attached a google doc version. @MakerMan and I will be presenting on next week’s Governance and Risk meeting to go over it, and I’ll try to answer any questions people have in this post as well.

For status updates, refer to this thread.

Any vault specific info can be posted here.

Without further ado:

Compensation Plan

Pursuant to the on-chain “Vault Compensation poll” 62k yes to 33k no that passed 4/6/2020, we hereby submit a compensation plan for approval by MKR holders.

MKR Holder Declaration

This compensation plan constitutes a proposal for a compromise and settlement of claims from vault owners in respect of the circumstances underlying the vault compensation poll referenced above. No action taken by the persons drafting or implementing this compensation plan, either previously or in connection with this compensation plan shall be deemed or construed to be: (a) an admission of the truth or falsity of any claims heretofore made or (b) an acknowledgment or admission by any such persons of any fault or liability whatsoever to vault owners or to any third party. The present loss compensation plan is without prejudice to any rights or interests of the individuals drafting or executing this compensation plan and any position that any such person may take in legal or administrative proceedings and addresses certain specific circumstances where MKR holders may volunteer to provide certain compensation to vault holders. The persons drafting or implementing this compensation plan maintain that MKR holders have no obligation to issue any compensation for losses, and volunteer to implement this plan solely at their discretion.

Goals and principles

  • Completeness - Ideally this process should address all outstanding claims for compensation.
  • Fairness - Similarly situated users should receive similar levels of compensation.
  • Consensus - Giving MKR voters the ability to choose key parameters will help ensure that the final executive vote has the support necessary to pass.

Overview of compensation process

Vaults that were liquidated at auction or self-liquidated their positions between 3/12/2020 12:00 UTC and 3/13/2020 13:40 UTC will be considered for compensation; liquidations falling outside of this time period do not qualify. Compensation amounts for ETH vaults that were liquidated at auction shall be determined based upon the compensation method and price selected by governance in poll (2). Once the compensation amount is determined, a smart contract will be created to administer the funds transfers. Vault owners not included in the initial compensation class (BAT vaults liquidated at auction and ETH or BAT vaults that self-liquidated) will have the opportunity to provide documentation to substantiate their claim, and receive compensation at the rate from governance poll (2). Vault holders shall be required to issue a transaction to withdraw compensation to their account, and compensation will only be made available to the address associated with the vault.

Proposed Stages

Each period lists deliverables (what needs to happen before moving to the next step), polling or voting cadence, and reasoning for why these steps are necessary or why this proposed order may work well.

Phase 0:

Governance poll:

  1. Approval for vault compensation plan
    a. Approve
    b. Decline

Reasoning: Poll (1) ensures that there is general alignment behind the proposed plan of action before beginning further MKR polling. If MKR holders vote to decline the initial plan, additional feedback can be gathered to determine what parts of the plan are controversial and then create an alternate plan that addresses these issues. This will likely require MKR polls for some of the items/questions listed in the Icebox section below, and may require additional vault analysis depending on outcomes.

Deliverables:

  • Working group agrees on plan document
  • Plan document posted to forum for discussion and presented on governance call
  • Need to confirm exact verbiage for on chain poll (1) and for the following week’s poll (2)
  • Gain MKR governance approval for plan via governance poll (1)

Phase 1:

Governance poll:

  1. What compensation method and price should we choose for paying claims? (forum thread) (github pull request)
    a. Collateral using nominal collateral return percentage and price on 3/13
    b. Collateral using nominal collateral return percentage and price on day before compensation is awarded (approximating paying claims in ETH/BAT)
    c. Collateral using nominal collateral return percentage and average price of a+b
    d. Tab change in relation to collateral change (using same collateral return percentage and collateral deficit percentage but applied to the DAI TAB.)

Reasoning: Compensation is a necessary prerequisite to determining the total DAI values for compensation tiers, so determining this at the beginning should help enable comprehension of future polls.

Deliverables:

  • Obtain MKR vote for (2)
  • Obtain quotes for work necessary for compensation disbursement:
    • Smart contract development and audit
    • Vault compensation analysis audit
    • Payment for working group time up to this point
    • Estimated cost for vault claims review and future working group time
  • Need exact verbiage of on chain polls for week 2 (3, 4, and 5) as well as executive vote
    • Calculate ETH-A liquidation compensation amounts, as well as total claim contract funding amount (150% of ETH-A liquidations) for each percentage option in poll (3) to ensure voter comprehension

Phase 2

Governance polls:

(3) Vault compensation percentage poll

(4) Poll for including a funding request for building and auditing smart contract and payment for working group expenses into next executive (forum thread) (github repository)

Executive vote:

(5) Approve funding for smart contract work, audits for compensation contract, plan writing, project management, any other work involved in setting up claim

Reasoning: Poll (3) allows MKR holders to decide what they view as a fair level of compensation. The polls for reference price/compensation method will already have been completed, so this should allow MKR holders to have a close estimate of the final DAI amount to be repaid for each percentage option. Poll (4) and the executive vote are necessary for the protocol to fund development and auditing work to put the approved compensation plan into action.

Deliverables:

  • Obtain poll results for (3) and (4) as well as executive vote (5) for funding
  • Confirm verbiage for final governance poll and executive vote
  • Ensure that the compensation contract and audits are on track
  • Manage invoicing and payment of devs/auditors
  • Develop procedure for reviewing claims from BAT and self-liquidated vaults

Phase 3:

Governance poll:

(6) Poll to include funding the compensation contract into next executive (Yes/No)

Executive vote:

(7) Approve funding compensation contract (similar to the Protocol DAI Transfer but without the frozen period)

Reasoning: The governance poll (6) and executive vote are necessary to gain final approval from MKR holders for the compensation package specified in polls (1) through (3). The poll provides an opportunity for MKR holders to formally decide whether the compensation contract is ready to deploy. To provide compensation to vaults outside of the initial compensation class, 150% of the decided DAI amount will be allocated with the extra amount set aside for claimants that step forward and provide adequate documentation.

Deliverables:

  • Gain approval for governance poll (6) and final executive vote (7)
  • Ensure broad communication of compensation package and claims procedures to affected vaults and wider Maker community, including any terms of accepting offer, deadlines, or other restrictions
    • Create and distribute a press release explaining the claims process for vault owners: vaults with collateral available to claim in Oasis, Black Thursday ETH auctions, Black Thursday BAT auctions and self-liquidated vaults
    • Coordinate comms with Maker community messaging team
    • Work with Maker UI providers to communicate claims process (Oasis, DefiSaver, etc)

During the compensation period:

Claimants outside the initial compensation class can submit data to FORUM THREAD to substantiate their claim. For example, these claimants include

  • Vaults that self-liquidated
  • BAT vaults

The compensation review team (i.e., Maker_man, felix, jpritikin, monetsupply, befitsandpiper, and any additional members) will review these data. If the claim checks out then the compensation team will add the claimant to the compensation smart contract to permit funds disbursement. The compensation team reserves the right to unilaterally decide whether a claim is valid or invalid. Claims posted more than 30 days from the beginning of the compensation period will not be considered. No appeals shall be entertained. All decisions are final and at the discretion of the compensation team.

Phase 4:

Executive vote:

(8) Return unclaimed funds from the compensation contract back to the surplus account.

Reasoning: Compensation should be claimed within approximately 90 days. We cannot extend the time window indefinitely because lawsuits may be in the works and vault holders need to decide promptly whether they will receive compensation and waive the right to sue, or join a suit.

END.

Disclaimer / Limit of liability:

The contents of this compensation plan document and any supporting information (“the Plan”) do not constitute financial, investment, legal, or tax advice. Information contained in the Plan is provided for general informational purposes only. Individuals involved in drafting or executing the Plan (“We”, “Us”) make no representation or warranty of any kind, express or implied, regarding the accuracy, reliability, validity, availability, or completeness of any information contained in the Plan.

To the maximum extent permitted by applicable law, We shall not be liable for damages of any kind resulting from any party’s use of or reliance on the Plan, or any actions or omissions of the Maker Ecosystem Growth Foundation and affiliates, the Dai Foundation and affiliates, the MakerDAO governance community, or any other third parties. By accepting the Plan, MKR holders agree to indemnify Us against any legal claims or torts resulting from actions taken to develop or execute the Plan such as assessment of individual vault claims.

Appendix: Icebox

Potential options for Maker governance not included in proposed governance plan.

In the event that the initial MKR poll to approve the compensation plan is rejected, the Maker community can signal which parts of the plan were contentious and potentially revisit some of the questions below.

  • Poll to confirm payment of compensation in DAI or ETH/BAT
    • A poll was developed to decide this question. However, during the drafting of this poll, it became clear that it is much simpler to compensate in DAI.
    • Proposing to move forward with compensation in DAI because Maker does not currently have the ability to acquire collateral assets. Maker voters can instead use a different reference price for ETH/DAI and BAT/DAI to approximate compensation with ETH or BAT
    • Deciding to compensate with ETH/BAT will likely add substantial delays to the compensation process.
  • Poll to determine/confirm the time bounds (start and end time) for vault auctions or self liquidations that will be covered by compensation plan
    • Proposing to move forward with vault inclusion criteria and start/end times from original Liquidation Report as discussed in the forums
    • Based on initial analysis, it looks like the Black Thursday period (3/12/2020 12:00 to 3/13/2020 13:40, ETH auctions 763-4324) covers the vast majority of users who lost funds, and covers substantially all of the zero bid auctions as well as the worst of the Black Thursday price falls and gas spikes
    • Possible counterargument: first and last 0% collateral return auctions near Black Thursday occurred at 3/12/20 8:00 UTC and 3/14/20 0:00 UTC, and last 0% collateral return auctions before auction freeze module and USDC were added occured by 3/16/20 13:00 UTC
    • Alternative time bounds would require additional analytical work, delaying issuance of compensation
    • Additional auction selection criterion:
      • < N% tab recovered,
      • Auction fetched < % some market price (only have OSM, uniswap markets, anything else need data which will delay compensation)
      • Collateral returned was < some chosen nominal %
  • Some process to select or approve the compensation review team
    • To speed up the process, we propose that the team will be formed by the same people who drafted the plan.
    • Some process can be added to the plan if the community feels like this is needed.
  • Appeal process for compensation review team decisions
    • To keep things simple, compensation review decisions shall be final and non-negotiable.
    • If the community feels like there is need for an appeal process, this can be added but will increase complexity, time, and cost required to administer the plan.
  • Poll to approve compensating vaults that self-liquidated
    • Proposing to move forward with “yes”, based on principles of fairness and completeness above
    • Users who took action to avoid liquidation likely saved MKR holders from additional bad debt, so it would seem unfair if these users ended up worse of than similar vault owners who allowed their positions to be liquidated
  • Poll to confirm using the same time bounds, reference price parameters, and compensation framework for self-liquidating vaults as for vaults that were liquidated by the system
    • Proposing to move forward with “yes” based on principle of equality
    • If poll resolves to “no”, follow up work/polling may be required to set reference price and time bounds for these vaults or identify alternative compensation heuristics
  • Poll to confirm mechanics of compensation for vaults that were liquidated at auction
    • Option 1: Uniform minimum collateral return percentage for vaults within time bounds (1) - topping up any vaults that received less than agreed standard (current compensation analysis covers this)
    • Option 2: Uniform premium/discount percentage versus VWAP of ETH/DAI or BAT/DAI
      • Need to determine the time used for valuing vault collateral (auctions don’t settle instantly)
      • Need to perform additional vault compensation analysis to determine overall and vault-by-vault compensation levels
      • If we do any compensation that has a time element to determine some value then someone will need to choose what this means for compensation. Example liquidations happen in phases (tend, dent, deal) and these phases usually happen in different blocks. Someone will have to define what time we use to define a market price for this case so a time based value choice can be applied to existing data.
    • Option 3: Tab based compensation. Apply the nominal collateral return to determine a collateral return deficit to multiply the tab in DAI to determine DAI compensation. This option is by far easiest to calculate over all possible claimants but it fails to compensate directly for collateral value (option 1)
    • Options 1 and 3 from this section have been incorporated into poll (2) to determine compensation method and price
  • Whether to suck the maximum possible compensation in a single executive or to spread it out over multiple executives
    • Spreading out the fund raising over multiple executives puts less pressure on the price of MKR from FLOP auctions. However, this approach has the danger that later tranches of funding may not be approved. Compensation funds could be exhausted and some otherwise eligible vault owners might not be compensated.
    • Therefore, we will suck enough DAI in a single executive to pay all potential claims. Surplus DAI will be returned to the protocol after a suitable waiting period.
  • Whether to wait until the surplus account can fully fund this compensation plan to avoid FLOP auctions.

Appendix: Smart Contract Specification

See https://github.com/jpritikin/BlackThurs

Appendix: Q&A

Q: Can we determine the asset reference price/compensation method and the auction refund percentage simultaneously?

A: This would be unwise. These polls are mutually dependent. Intermediate vote results on one poll would change the probabilities on the other poll.

Q: Could the compensation amount polls be run in the opposite order?

A: Yes, but the proposed order seems easier for MKR holders to decide. It may be hard to decide the auction refund percentage without knowing the reference price.

Q: Why wasn’t the asset reference price poll initiated on May 11?

A: Rich pointed out that signaling guidelines were not followed. Rich requested that more attention be put toward building consensus. For example, we should map out a complete plan before we run more polls.

Q: Why do we need a smart contract to convey compensation?

A: How else can it be done? Compensation will involve 100s of token transfers. It is not possible to batch all of these transfers into a single executive spell. A natural person could be nominated to issue the transactions, but what assurance do we have that the tokens will be transferred correctly? The total amount could be large. Who do we trust to handle that kind of cash?

Q: Is requiring users accept a release to claim compensation useful or legally valid?

A: We will draft the language as if it has legal force, but whether or not it has legal force is not important. The agreement is important because it educates that vault holders can either claim compensation or join as plaintiff in a legal action, but not both.

Q: Will vault holders be able to interact directly with the smart contract as well or will interactions need to take place through the GUI?

A: It is always possible to interact directly with a smart contract, but we will encourage invoking claim() from our static webpage that informs the claimant that claiming compensation causes them to waive the right to sue.

Q: What benefits do we obtain from using a smart contract and asking vault holders to claim compensation?

A: By requiring the vault holder to claim compensation, we ensure that they currently have an active wallet (that is, private key is not lost). In addition, we can stipulate that the act of claiming compensation waives the possibility of future litigation.

Q: How do we handle the final executive vote to fund compensation contract if MKR voters decide to use a reference price based on when the compensation is issued? Depending on how long vote takes to pass, there is the potential for the market price drifting away from the intended reference price.

A: The last opportunity to set the reference price is when the contract is created and address recorded for approval in the executive spell. That’s why particular language is used in the reference price poll.

Q: Where will the GUI to claim compensation be hosted?

A: On github as a static web page. If we can get a domainname like march13claim.makerdao.com to point to our static web page, that will be great, but it’s not required.

Q: What is the Tab compensation plan (option 2d)?

A: While going through claimants both within the BT plan proper and those who might be outside of the plan (self liquidators like vault 2288) we found that for most cases looking at the collateral change vs. the borrowed debt (TAB) change that it was easiest to value the damage in terms of the debt change as the Liquidation Ratio set by the borrower effectively determined the collateral value. In the loosest sense it makes more sense to value the compensation based on the amount borrowed since liquidation would occur based on the changing value of the collateral. The only change here is that we use the collateral return deficit to multiply the TAB change to determine compensation in DAI.

Q: Define the collateral return deficit?

A: If governance decides that compensation should be determined based on how much collateral was returned then one can uniformly apply this ‘nominal collateral return’ to the ‘actual collateral returned’ to create:

Collateral return deficit = nominal collateral return (chosen by governance) - collateral returned

Typically we look at this as a percentage because the theoretical return percentage is defined by the LR for the collateral type.

Q: Can you give examples of application of options in poll #2 (a-d) to some vaults.

A: Yes. Using a nominal collateral return of 18% as a working example and value for poll option 2a at 100DAI/ETH, 2b at 240DAI/ETH, 2c = 170DAI/ETH

Example 1: Self liquidator

Vault 2288

Before 5005ETH
After 585.18ETH
Collret 11.69%

Tab 423835.88

Colldef 18 - 11.69% = 6.31%
(.18 - .1169) * 5005 = 315.8155 ETH

2a(DAI) 315.8155 * 100 DAI / ETH = 31581.55DAI
2b(DAI) 315.8155 * 240 DAI / ETH = 75795.72DAI
2c(DAI) 315.8155 * 170 DAI / ETH = 53688.64DAI
2d(DAI) (.18 - 1169) * 423835.88 DAI = 26744.04DAI

Example 2: 0-bid liquidated

Vault 3834

Before 100.1 ETH
After 0 ETH
Collret 0%

Tab 9049.466

Colldef 18%
.18 * 100.1 = 18.018 ETH

2a(DAI) 18.018 * 100 DAI / ETH = 1801.8DAI
2b(DAI) 18.018 * 240 DAI / ETH = 4324.32DAI
2c(DAI) 18.018 * 170 DAI / ETH = 3063.06DAI
2d(DAI) .18 * 9049.466 DAI = 1628.90DAI

Appendix: Working Group Payment

Rate of pay: TBD, possibly 50 DAI per hour

Hours worked as of 6/15/2020:

  • Joshua Pritikin – 40
  • Monet Supply – 24
  • Maker Man – 30
  • Felix – 4
  • Befitsandpiper –

Total outstanding working group time as of 6/15/2020: 98 hours

Total outstanding working group payment as of 6/15/2020: 4900 DAI

Future tasks requiring compensation:

  • Additional writing, analysis, and project management (working group)
    • Cost estimate: TBD
  • Create compensation smart contract (outside developer)
    • Cost estimate: TBD
  • Audit compensation smart contract (outside auditor)
    • Cost estimate: TBD
  • Review and process claims from BAT auctions and self-liquidated vaults (working group)
    • Cost estimate: TBD
13 Likes

I’d encourage people to read over at least the main body of this doc (excluding appendices) to get some idea of what the plan is before it is presented on Thursday. This would put people in a good place to ask questions after the presentation.

3 Likes

My apologies, but some of this is over my head and maybe someone could easily answer my main question:

In the above plan, how much is being compensated to those who were returned 0%?
For example, if I had 400 ETH locked as collateral with around 33k DAI borrowed and my liquidation price floating around $135.
Much thanks for any help so I can give my best feedback to this plan :slight_smile:

1 Like

The plan doesn’t select a level of compensation. How the plan relates to your question is that the plan, if accepted, will pose two on-chain polls that will determine compensation. In Phase 1, the compensation method is decided. In Phase 2, the compensation percentage poll is decided. These two polls are sufficient to determine the level of compensation offered to vault holders.

There is an example of the compensation calculation for each method at the end of the Q&A section, just prior to the first Appendix.

3 Likes

Thank you so much for putting this together.

Good morning everyone.

The above is pretty much the summary statement regarding moving forward.

MKR holders have no obligation to issue any compensation to any one for any thing.

Everyone knows I tend to look at the bigger picture here. This Compensaion Plan(CP) above is pretty much the best measure of how to move forward on the subject from my perspective in the compensation group as well as the data guy atm. See Phases 0, 1, 2.

From a Maker and a Vault Holder perspective it is a take it or leave it proposal. Governance could balk on the above CP and simply say no leave it to courts whatever. If governance says yes to the CP they are also saying they ‘still’ are not obligated to actually ‘do’ anything, The same is true from vault holder perspective: IF governance DOES anything, they still gets to say yes, or no, to whatever offer governance lays on the table for each of them here by simply not acting, they opt out.

We did the best job and presented two different methods in Phase 2 to spead compensation across a class of vaults to catch the most affected based on a number of governance controlled criterion. We chose to pick up any straggling vaults making claims as we go along in this process as governance progresses and discussion and polling ensues in Phase 3.

The details ultimately - to be discussed/polled on Phases 0-4.

One thing I want people to pay attention to. We don’t expect the vault class to 100% accept this deal.
We want it to be clear by being forced to ‘opt in’, not doing anything means opting out! While I would hope a deal would be accepted 100%. I personally don’t expect this. If even 50% of the class to opt in I think the CP would be a success to some extent.

Hence whatever pricetag is placed on this CP by governance realize perhaps > 50% of it won’t be claimed.

Beyond this there is some challenge to hammer out the details. Particularly when we come to poll 2 - compensation method but once we hurdle that the rest should be pretty easy.

I want vault holders to know that anyone that falls outside of the class proper however this is decided you guys aren’t forgotten. It is a general hope (see icebox) that governance takes into account how to settle up any secondary claims via discussion but imho think the group doen’t feel like we can unilaterally address this, governance has to speak to certain issues, and we as the group then are guided by governance. Our job is to frame this so the community and governance can speak.

Our group goal as the CP creator was simply to try to put some kind of plan together that can be acted on by governance however we may personally side here.

The CP is our best shot where MKR holders can realistically offer a good gesture hand to vault holders who feel like they got hammered on BT to settle the issue and move forward.

Honestly if someone, any one has a better idea or a great reason to stop this feel free to speak up because so far a lot of work has been put into this, it is time to $DAI or get off the pot. The CP above as presented is our best shot here.

As always submitted for public comment and debate.

4 Likes

Hi All,

Here’s the slide deck @MakerMan and I presented for today’s governance and risk call. Audio/video should be available shortly.

5 Likes

If MKR holders have no obligation,do vault holders have rights?

This wasn’t intended to be a dig against vault holders, or to prejudice the governance process towards providing less compensation. The main purpose of stating this is to try to avoid legal problems with the current situation and set expectations that compensation will not be provided for any events that might occur in the future.

Vault owners have rights and responsibilities which are written into Maker’s source code and described in the docs (e.g. vault owners can withdraw collateral over their required liquidation ratio at any time, but they are also responsible for maintaining sufficient collateral). However, if vaults are liquidated, there is no guarantee made of receiving any collateral back as this depends on the auction price.

The liquidation process may not have been understood by some users, but MakerDAO and MKR holders only control the core protocol and not any user interfaces. Without control, they can’t take on responsibility for disclosures on websites that offer vault creation.

6 Likes

I can’t say if there is obligation or not from MKR holders to move forward into issuing such a compensation. What there is for sure is a commitment as the on-chain “Vault Compensation poll” 62k yes to 33k no that passed 4/6/2020 clearly states.

(that such a governance mandate is an obbligation or not, is something that would’t worth to tackle IMHO)

BTW, I understand the reasoning of the following:

my understanding is that the outcome wouldn’t be binding at all (as per the just mentioned governance mandate), I see this as a way to signal intentions/perception from MKR holders about their sympathy with the proposal and find things to be improved. correct?

1 Like

Yeah if the first on-chain poll didn’t pass this would all be moot.

The second Phase 0: Poll #1 is basically to determine if governance is ok with the plan as it stands or not.

I am hoping we have a forum poll but I am going to leave that up to governance facilitators to decide. I think everyone is just waiting for some discussion phase. Everyone has an opinion regarding whether there is an obligation for compensation. Even vault 2288 who is on the team pretty much agreed there was no obligation but we all on the team felt since governance signalled the intention to compensate we should be clear about what this process means. Our concern is that we start this, everyone thinks they will get something and then it fails or gets stuck for some reason and governance simply refuses to go further (i.e. funding compensation for example).

I think part of the plan was coming together on a general statement regarding the issue and then simply put together the pieces of a plan governance will have to approve/execute in steps so there is a start to end process and reasonably well defined governance and other steps to execute the plan. Governance in the end gets to choose the qualification criterion, compensation method, then the amount. Then vault holders elidgible get to make their choice whether to reject or accept the offer.

2 Likes

Hello all,

Thank you to the working group for putting this together. I am in favor of the compensation proposal process described above, and I’m looking forward to being able to vote on the governance polls that you outlined.

If you need a developer to create the compensation smart contract, I am at the disposal of the working group to help out.

Cheers

8 Likes

One consideration, with regards to the Surplus Buffer, is that if the compensation amount exceeds 500k, then MKR governance needs to increase the buffer to even be able to house the Dai that would be allocated to the compensation contract.

This dependency means one additional Executive Vote to expand the buffer, and then giving the protocol time to collect the needed Dai.

3 Likes

Are you assuming that we need to avoid triggering FLOP auctions? At least in the current draft, we do not try to avoid FLOP auctions. If the total compensation amount exceeds the surplus then we transfer the total amount anyway and allow the surplus to go negative.

Yea, my comment assumes a plan that tries to avoid flop auctions being triggered.

I guess it depends on the preference of MKR voters. If chosen to wait until the amount is present in the surplus buffer, it would take longer to get compensation out there and ETH/BAT price risk would continue to be borne by MKR holders.

Without Flops

  • Longer wait for compensation disbursement.
  • Price risk is carried and may cost MKR voters more in the long run if prices appreciate, less if prices drop.
  • No MKR minting

With Flops

  • No extra delay in disbursing compensation.
  • End exposure to price risk sooner.
  • MKR gets minted.

disclaimer:
I have no particular opinion now, just trying to outline the facts for consideration.

Interesting relevant piece of convo from the gov call here:

5 Likes

Whether the price risk is carried will be determined by poll #2, which determines how compensation is calculated,

  1. Collateral using nominal collateral return percentage and price on 3/13 – No price risk
  2. Collateral using nominal collateral return percentage and price on day before compensation is awarded (approximating paying claims in ETH/BAT) – Price risk
  3. Collateral using nominal collateral return percentage and average price of a+b – Some price risk, a compromise
  4. Tab change in relation to collateral change (using same collateral return percentage and collateral deficit percentage but applied to the DAI TAB.) – No price risk

Hope this makes sense!

4 Likes