---
# System prepended metadata

title: 'Episode 196: June 23rd, 2022'
tags: [G&R]

---

---
tags: G&R
---

# Episode 196: June 23rd, 2022

## Agenda

- [00:00](https://youtu.be/ysP-orYyapk): Introduction
- [02:30](https://www.youtube.com/watch?v=ysP-orYyapk&t=150s): Votes and Polls
- [04:20](https://www.youtube.com/watch?v=ysP-orYyapk&t=260s): MIPs Update
- [10:39](https://www.youtube.com/watch?v=ysP-orYyapk&t=639s): Forum at a Glance
- [18:45](https://www.youtube.com/watch?v=ysP-orYyapk&t=1095s): Initiatives Update: Cashflow Forecast
- [49:40](https://www.youtube.com/watch?v=ysP-orYyapk&t=2980s): Discussion: Prioritization Poll
- [1:04:54](https://youtu.be/ysP-orYyapk?t=3894): Conclusion

## Video

[Link](https://www.youtube.com/watch?v=ysP-orYyapk)

## Introduction 

### Agenda and Preamble

#### Payton Rose

[00:00](https://youtu.be/ysP-orYyapk)

- Hello, everyone. Welcome. My name is Payton; I go by Prose11 online. I am pleased to host the 196th Governance and Risk call at MakerDAO. Today is Thursday, June 22, 2022. On our weekly call, we discuss what is going on in the Protocol, the risks, and the challenges we face.
    - A group of awesome people who care about Maker, work in the ecosystem, or are interested in what we do are joining us today.
- We are recording this meeting. Try not to speak over one another. If someone is talking and you wish to speak after they finish, you can use the _raise hand_ function in Zoom, found under _reactions_; Thomas and I will put you in the queue. Otherwise, if you are unable or unwilling to hop on the mic, you can leave your comments or questions in the chat, and we will try to address them when appropriate.
    - This is an open meeting. Be respectful of each other. Nevertheless, we want you to ask questions, comment, and engage if you please.
- That covers the ground rules. Let us go ahead and get into the agenda for today.

## General Updates

### Votes

#### Payton Rose

*Polls:*
- Ongoing Ratification Polls - Covered in MIPs segment 
- Priority Polls - Covered in Discussion Section 
- 2 Concluded Greenlights - Deferred 
    - [**KREDIKA** (Kredika LTD)](https://vote.makerdao.com/polling/QmWTfWad)
    - [**XSGD** (StraitsX)](https://vote.makerdao.com/polling/Qmd4RbRq)

*Executive:*
- Yesterday's [**Executive**](https://vote.makerdao.com/executive/template-executive-vote-mkr-vesting-transfers-june-22-2022#proposal-detail) | 22,500 MKR supporting
    - CU MKR - [**DEC0**](https://mips.makerdao.com/mips/details/MIP40c3SP36#sentence-summary) + [**RWF**](https://mips.makerdao.com/mips/details/MIP40c3SP38#sentence-summary)
- Next Week's Executive 
    - Risk CU MKR Transfer
    - Active Liquidations (Step 2) on Collateral Offboarding
    - Contract Housekeeping

### MIPs

#### Gala

[04:20](https://www.youtube.com/watch?v=ysP-orYyapk&t=260s)

[Weekly MIPs Update #92](https://forum.makerdao.com/t/weekly-mips-update-92/15933)

![Calendar](https://i.imgur.com/0EYiMwN.png)

![MIPs](https://i.imgur.com/aEOpU0i.png)

![Ratification Polls](https://i.imgur.com/K2lqLHJ.png)

#### **_Ratification Polls_**

- These Ratification Polls are in their second and last week. We will look at the **results from around 30' before this call.**

![Top-Level MIPs](https://i.imgur.com/tamAL4F.png)


##### [_**Top-Level MIPs**_:](https://youtu.be/ysP-orYyapk?t=269)

[MIP74: Permissionless Open Market Operations](https://forum.makerdao.com/t/mip74-permissionless-open-market-operations/15095) -- _Leading option:_ **No**
<details>
  <summary>Summary</summary>
  
  _"MIP74 defines the process used to agree and action permissionless open market operations with funds controlled by MakerDAO."_
- [Vote Breakdown](https://vote.makerdao.com/polling/QmaivXCv)
</details>

- Artem will review the [signal request](https://forum.makerdao.com/t/signal-request-repeal-poll-id-827-deployment-of-a-permissionless-open-market-operation-trial/15945) seeking to revoke the trial run of using MIP74, but it is crucial to highlight that the DssKiln module is a general module, which usage is for sapping tokens over time, and does not necessarily entail MKR burning.

---

[MIP75: Task Forces](https://forum.makerdao.com/t/mip75-task-forces/15093) -- _Leading option:_ **No**
<details>
  <summary>Summary</summary>
  
  _"MIP75 proposes the formalization of Task Forces. These groups will be responsible for coordinating high-level business decisions on behalf of the DAO. They may work with an associated discretionary fund to realize business objectives."_
- [Vote Breakdown](https://vote.makerdao.com/polling/QmTRtpp3#vote-breakdown)
</details>

---

[MIP75c3-SP1: Onboard Task Force - Growth Task Force](https://forum.makerdao.com/t/mip75c3-sp1-onboard-task-force-growth-task-force/15094) -- _Leading option:_ **Reject**
<details>
  <summary>Summary</summary>
  
  _"The Growth Task Force aims to grow the Maker ecosystem as fast as possible. We believe that we are in a nascent stage of crypto, and controlling as much future market share as possible is critical for the survival of this project."_
- [Vote Breakdown](https://vote.makerdao.com/polling/Qmbs5Kx5#vote-breakdown)
</details>

---
![](https://i.imgur.com/auKnYND.png)

##### [_**Core Unit Budgets**_:](https://youtu.be/ysP-orYyapk?t=332)

[MIP40c3-SP70: Modify Growth Core Unit Budget (GRO-001) (1.30m DAI)](https://forum.makerdao.com/t/mip40c3-sp70-modify-growth-core-unit-budget-gro-001/15102) -- _Leading option:_ **Approve increased budget (BearMarket)**
<details>
  <summary>Summary</summary>
  
  _"MIP40c3-SP70 requests a 12-month budget of 5,085,157.11 DAI for the Growth Core Unit starting from July 2022."_
- [Vote Breakdown](https://vote.makerdao.com/polling/QmdMkg2N)
</details>

- This option includes the funding of the Brand team.

---

[MIP40c3-SP69: Modify Core Unit Budget - Strategic Finance (SF-001) (5.08m DAI / 4.21m DAI)](https://forum.makerdao.com/t/mip40c3-sp69-modify-core-unit-budget-strategic-finance-sf-001/15090) -- _Leading option:_ **Approve existing budget only**
<details>
  <summary>Summary</summary>
  
  _"MIP40c3-SP69 modifies the DAI budget for Core Unit SF-001: Strategic Finance."_
- [Vote Breakdown](https://vote.makerdao.com/polling/QmVMc78Z)
</details>

---
![Core Unit Facilitator Onboardings](https://i.imgur.com/JPB5k1B.png)

##### [_**Core Unit Facilitator Onboardings**_:](https://youtu.be/ysP-orYyapk?t=364)§

[MIP41c4-SP34: Immunefi Security Core Unit Facilitator Onboarding - IS-001](https://forum.makerdao.com/t/mip41c4-sp34-immunefi-security-core-unit-facilitator-onboarding-is-001/14610) -- _Leading option:_ **Yes**
<details>
  <summary>Summary</summary>
  
  _"Add [@psychonaut](https://forum.makerdao.com/u/psychonaut) (Jpritikin Industries, Inc) as a co-Facilitator for Core Unit IS-001: Immunefi Security."_
- [Vote Breakdown](https://vote.makerdao.com/polling/QmaR6q4L)
</details>

---

[MIP41c4-SP35: Facilitator Onboarding (DIN-001)](https://forum.makerdao.com/t/mip41c4-sp35-facilitator-onboarding-din-001/14948) -- _Leading option:_ **Yes**
<details>
  <summary>Summary</summary>
  
  _"This sub proposal adds [@tadeo](https://forum.makerdao.com/u/tadeo) as the Facilitator for the Data Insights Core Unit."_
- [Vote Breakdown](https://vote.makerdao.com/polling/QmWhsLCU)
</details>

---

##### [_**Core Unit Onboardings**_:](https://youtu.be/ysP-orYyapk?t=394)

![CU Onboardings](https://i.imgur.com/vmyyW2J.png)

[MIP39c2-SP33: Adding Lending Oversight Core Unit (LOVE-001)](https://forum.makerdao.com/t/mip39c2-sp33-adding-lending-oversight-core-unit-love-001/15098) -- _Leading option:_ **Yes**
<details>
  <summary>Summary</summary>
  
  _"LOVE-001 intends to support the DAO in its evolution towards becoming the central pillar of DeFi by facilitating the sustainable onboarding of tens (or hundreds) of billions of more complex use cases."_
- [Vote Breakdown](https://vote.makerdao.com/polling/QmWYajMq#vote-breakdown)
</details>

---

![Others](https://i.imgur.com/8Z44hZo.png)

##### [_**Others**_:](https://youtu.be/ysP-orYyapk?t=406)

[MIP55c3-SP4: Adding a Special Purpose Fund - Makershire Hathaway](https://forum.makerdao.com/t/mip55c3-sp4-adding-a-special-purpose-fund-makershire-hathaway/14643) -- _Leading option:_ **No**
<details>
  <summary>Summary</summary>
  
  _"The Makershire Hathaway Special Purpose Fund will be a 10M pool managed by Strategic Finance CU under the supervision of Risk
CU and prospective Lending Oversight CU to experiment with yield generation strategies and support DAI liquidity/utility."_
- [Vote Breakdown](https://vote.makerdao.com/polling/QmZjU2pG)
</details>

---

[MIP4c2-SP20: MIP16 Amendments](https://forum.makerdao.com/t/mip4c2-sp20-mip16-amendments/14980) -- _Leading option:_ **Yes**
<details>
  <summary>Summary</summary>
  
  _"MIP4c2-SP20 amends [MIP16](https://mips.makerdao.com/mips/details/MIP16) to reflect the changes to the weekly Executive Vote cadence proposed by the Protocol Engineering Core Unit [here](https://forum.makerdao.com/t/governance-cadence-improvement/14972)."_
- [Vote Breakdown](https://vote.makerdao.com/polling/Qmerh2xJ)
</details>

---

[MIP63c4-SP4: Amend Keeper Network (Keep3r)](https://forum.makerdao.com/t/mip63c4-sp4-onboard-amend-keeper-network-keep3r-network/14321) -- _Leading option:_ **Yes**
<details>
  <summary>Summary</summary>
  
  _"This is a budget amendment application for Keep3r Network: a decentralized and permissionless keeper network."_
- [Vote Breakdown](https://vote.makerdao.com/polling/QmXbgVGz)
</details>

---
![Proposals in RFC](https://i.imgur.com/muuQ9Xw.png)


#### [_**Proposals in RFC**_:](https://youtu.be/ysP-orYyapk?t=437)

![Special Purpose Funds](https://i.imgur.com/epRPcQq.png)

[MIP55c3-SP5: Interim Chief Legal Officer](https://forum.makerdao.com/t/mip55c3-sp5-interim-chief-legal-officer/15981)
<details>
  <summary>Summary</summary>
  
  _"The MakerDAO Interim Chief Legal Officer Special Purpose Fund will pay legal fees and expenses to retain Kianga Daverington, Esq. through [@DaveringtonPLLC](https://forum.makerdao.com/u/daveringtonpllc) as full-time Interim Chief Legal Officer of MakerDAO for a period of six months."_
</details>

---
![CU Offboarding](https://i.imgur.com/yNdySd3.png)


[MIP40c3-SP72: Modify Core Unit Budget (EVENTS-001)](https://forum.makerdao.com/t/mip40c3-sp72-modify-core-unit-budget-events-001/15991)
<details>
  <summary>Summary</summary>
  
  _"MIP40c3-SP72 removes all and any active budgets for the Events Core Unit—Dai or MKR."_
</details>

---

[MIP41c5-SP8: Facilitator Offboarding (EVENTS-001)](https://forum.makerdao.com/t/mip41c5-sp8-facilitator-offboarding-events-001/15992)
<details>
  <summary>Summary</summary>
  
  _"I'm sure these are nice people, but this core unit is not needed, and [severance has been proposed](https://forum.makerdao.com/t/mip40c3-spxx-modify-core-unit-budget-for-events-001/15991)."_
</details>

---

![Top-Level MIPs](https://i.imgur.com/DZVkFaG.png)

[MIP72: Delegated Collateral Attachment - RWA Arranger Application - 6s Capital ](https://forum.makerdao.com/t/mip72-delegated-collateral-attachment-rwa-arranger-application-6s-capital/14482)
<details>
  <summary>Summary</summary>
  
  _"MIP72 authorizes 6s Capital as a Real World Asset Arranger for MakerDAO to cause commerce by assembling commercial senior-secured transactions based on the authorization #001 outlined herein."_
</details>

---

![Facilitator Onboardings](https://i.imgur.com/HPoq4rD.png)

[MIP41c4-SP37: Governance Facilitator Onboarding (GOV-001)](https://forum.makerdao.com/t/mip41c4-sp37-governance-facilitator-onboarding-gov-001/15284)
<details>
  <summary>Summary</summary>
  
  _"*This sub proposal onboards [@Patrick_J](https://forum.makerdao.com/u/patrick_j) as a Facilitator for the GovAlpha (GOV-001) Core Unit.*"_
</details>

---

![Amendments](https://i.imgur.com/sED98je.png)

[MIP4c2-SP15: Core Unit Offboarding Process Amendments](https://forum.makerdao.com/t/mip4c2-sp15-core-unit-offboarding-process-amendments/12920)
<details>
  <summary>Summary</summary>
  
  _"Recent events have shown the process for involuntarily offboarding facilitators and core units could be improved. These changes attempt to make the process more transparent, orderly, and conducive to the substantive discussion surrounding an offboarding proposal before a vote."_
</details>

---

[MIP4c2-SP21: Add Retrospection Process to prune unused MIPs](https://forum.makerdao.com/t/mip4c2-sp21-add-retrospection-process-to-prune-unused-mips/15142)
<details>
  <summary>Summary</summary>
  
  _"Bureaucracy tends to grow without active pruning. The Retrospection Process aims to surface a process to help prune unused or low-utility MIPs. This process also helps introduce and familiarize the broader community with MIPs that continue to be used."_
</details>

---

### Forum at a Glance

#### Artem

Post: [Forum at a Glance: June 16th - 22nd, 2022](https://forum.makerdao.com/t/forum-at-a-glance-june-16-22-2022/15999)

Video: [Forum at a Glance](https://youtu.be/ysP-orYyapk?t=639)

- [_**News & Announcements:**_](https://youtu.be/ysP-orYyapk?t=664)
    - [Decentralized Voter Committees: Endgame Party calls. Everyone welcome](https://forum.makerdao.com/t/decentralized-voter-committees-endgame-party-calls-everyone-welcome/15977)
    - [Self Insurance Fund - Update ](https://forum.makerdao.com/t/self-insurance-fund-update/15943)
    - [Deimos Delegation Platform](https://forum.makerdao.com/t/deimos-delegation-platform/15860)

- [_**Discussions:**_](https://youtu.be/ysP-orYyapk?t=771)
    - [The Endgame Party delegate signup](https://forum.makerdao.com/t/the-endgame-party-delegate-signup/15852)
    - [The cryptobank metaplatform political party](https://forum.makerdao.com/t/the-cryptobank-thinktank-for-scientific-governance/15838) -- _The cryptobank thinktank - For scientific governance_ (Renamed)
    - [[KICKOFF] Governance from First Principles: Building a Resilient, Decentralized and Uncensorable Stablecoin](https://forum.makerdao.com/t/kickoff-governance-from-first-principles-building-a-resilient-decentralized-and-uncensorable-stablecoin/15978)
    - [Modeling DAI maturity](https://forum.makerdao.com/t/modeling-dai-maturity/15961)

- [_**Signal Requests:**_](https://youtu.be/ysP-orYyapk?t=899)
    - [[Signal Request] Weather-Proofing Existing RWA Vaults Against Market Conditions](https://forum.makerdao.com/t/signal-request-weather-proofing-existing-rwa-vaults-against-market-conditions/15859)
    - [Signal Request: Asset Allocation of MIP65/Clydesdale](https://forum.makerdao.com/t/signal-request-asset-allocation-of-mip65-clydesdale/15922)
    - [[Signal Request] REPEAL Poll ID-827 Deployment of a Permissionless Open Market Operation Trial](https://forum.makerdao.com/t/signal-request-repeal-poll-id-827-deployment-of-a-permissionless-open-market-operation-trial/15945)
    - [Signal Request: LP our AAVE and ENS with ETH on Uniswap v3 ](https://forum.makerdao.com/t/signal-request-lp-our-aave-and-ens-with-eth-on-uniswap-v3/15863)

## Initiatives Update

### Cashflow Forecast

![Cashflow Forecast](https://i.imgur.com/FueF8RE.jpg)

#### Mark

[18:15](https://www.youtube.com/watch?v=ysP-orYyapk&t=1095s)

- Payton Rose: We will try something new today. I will do a pre-call and a post-call to gauge this presentation's impact on people's understanding or knowledge.
    - While the Strategic Finance team gets ready for their cashflow presentation, if you do not mind, answer the questions on your screen, or do so post-call after the talk.
- Mark: This is Mark, also known as Aes in the forums. I will be walking everyone through the cash flow as of June 6, 2022.

<details>
  <summary>Disclaimer</summary>
  
  ![Disclaimer](https://i.imgur.com/tYEPZSG.png)
</details>

- To start: this report is for informational purposes only. It does not constitute financial investment, legal, regulatory, or tax advice.

![Cash Flow Update](https://i.imgur.com/bPqHOmv.png)

- There has been confusion and mischaracterizations around Maker's financial position over the past few weeks. 
    - The key takeaway I would like everyone to have from this is that compared to the broader crypto markets, especially C5 services, MakerDAO's financial discipline has left it in a position of relative strength, with nearly 100 million of Dai equity between the surplus buffer and operating reserves.
- The decrease in recurring net protocol income, which we call _rNPI_ for short, necessitates an evaluation of our cash flow runway. 
    - The table on the left-hand side shows the last six months of our income statement, with December on the far left and through May on the right. 
        - As a reminder, our CU expenses and financial statements are measured as _Core Unit wallet outflows._ This is equivalent to cash-based accounting.
        - We also request the CUs self-report their expenses and consolidate them manually to report more accurately the real monthly burn rate of CU expenses.
        - Using this methodology for tracking expenses, our rNPI has fallen from 9.2 million in December to 1.6 million in May. 
    - Highlighted in green, we estimated the main expenses. We were still collecting outstanding expenses from CUs.
        - If we look at the approved CU's budgets and modeled out rNPI, assuming they spent the max budget, we would have gone from 8.5 million rNPI in December to breaking even in May.
    - On the right side of the table, we broke out the income statement of three different scenarios based on the current run rate as of yesterday.
        - A bear market scenario is ETH at around $500 per token.
        - A giga-bearish scenario is with ETH at around $290 per token.
    
    - On the far right side, we annualized these scenarios' entire runway in years under each stem scenario.
        - Importantly, this forecast does not include any incremental revenue streams.

[22:13](https://youtu.be/ysP-orYyapk?t=1333)

![Cash Flow Update - Cash Burn](https://i.imgur.com/T5L1Tr8.png)

- As many here are aware, Seb has been working on making investing in PSM assets into short-term treasuries and corporate bonds a reality since his days in the RWF CU. Today we are working with Alan from Monetalis to bring this to fruition. 
- For clarity: by the end of Q3, we are targeting 500 million dollars of deployments into these assets.

![Cash Flow Update - Call for action](https://i.imgur.com/xeDKA8h.png)

- Despite our position of financial strength, StratFi CU calls for action and recommends the following steps to strengthen our position, not only to survive in the bear market but to thrive.
- We recommend a surgical approach to our current spending budgets over a broad-based cut. 
    - The reason we recommend this is because if you look at the DAO's revenue over the past year, this business is cyclical and tied to the cyclicality of the cryptomarkets. We went from a high of 200 million dollars and annualized revenue down to around 26 million in the past six months.
        - We need to reassess these budgets holistically for the new market realities.
- With that said, we will take any questions.

[26:01](https://youtu.be/ysP-orYyapk?t=1561)

- Robert: Going back to the last slide, it makes sense to look at the individual performance of the CUs. 
- My question is to the community: since we talked about doing something surgical, it is fair to say that it is a subjective conversation when we talk about performance. What I would like to understand when we do option three, if we do it, is how exactly we will measure the CUs based upon performance. 
- There is common knowledge of strategic objectives inside of the DAO. There have been some focus objectives that, for example, Rune has posted to the community. There are a variety of other ones that happen as a result of individual mandates. I would like to understand how we measure the CUs as a community.
    - Mark: Ultimately, we want to create a framework to help guide this discussion. It is not different from a traditional corporate performance review, function, or negotiation for one's budget. 
    - When some budgets pass, sometimes they pass with operating margins over 70%, or 80%. Some are even higher. We want to reallocate capital to where we need it most. We have to go through a process like this, despite the challenges that are part of it.
    - We will have an extremely inefficient capital allocation if we do not have any performance reviews. Frankly, it is not sustainable. I am more concerned about going through the process rather than striving for it to be perfect. And we have to start somewhere, and somewhere is better than nowhere.
- Robert: I would agree with you, Mark. But you said something specific. There are multiple ways to do evaluations; you mentioned one that I am familiar with. To be as objective as possible is the key to deciding how we would measure CU performance.
    - Mark: It will be up to the Delegates and MKR holders to decide the terms of what makes it on any framework. 
    - In my perspective, it is on the Facilitator to argue why they should have a certain amount of capital allocated for the business and what value they are delivering. It is on them to explain to MKR holders and Delegates what value they are creating for the Protocol.
    - The design is solely on the framework and just checking off boxes. It will be on each Facilitator to make their case for why they deserve to have their budgets, whether they deserve expansion or, if they do not, how much their budget should be set up.
- Robert: I hear you, and again, I have to go back to the fact that value is a subjective measure. 
- If we have strategic objectives defined, it would be a simple exercise. The only thing we have to go on for each of the CUs is how well we achieved our mandates as we have them listed for CUs. 
- I have been through many of these cycles before. I have experienced both bull and bear markets with many companies. When done correctly, it can be a fruitful exercise. Although, I rarely have experienced that. That is my concern.

[30:35](https://youtu.be/ysP-orYyapk?t=1835)

- Luca Prosperi: Yes. It is hard to assess performance, needs, or CUs from the outside. We might suffer the risk of what sometimes happens in a DAO, benefiting those that are better lobbyists than executors. 
- One idea was to suggest several budget reductions across the board and have the CU's Facilitator decide how to allocate them. Given that everyone can have a different view on how to do that.
    - Mark: There is some merit in such an approach. But frankly, some CUs have plenty more room to cut than others. Broadly, CUs that requested much more than they needed have been effectively rewarded by governance over those that forecasted what they needed. 
    - Now that many CUs are in a part of the cycle where they question the next phase of their budget, those who are under-promised and then delivered are held accountable for people that spent or requested far in excess of what they needed.
    - Robert: Mark, that is a different exercise. At least in my opinion, because of what we are asking CUs to do. 
    - My CU has been ratified since October. I have much more data now than I had before. We could use our best efforts to update our initial forecast; that is a reasonable request for any CU. It is also a simple process to go through. That alone might yield enough results for us to stop there. 
    - I am not saying we have to. I am saying that there are probably other steps that we can take that are non-invasive, easy, and realistic for us because they require very little or no oversight. Every CUs would be responsible for the process, and if they feel it is not aggressive enough or still thinks there is more to trim, potentially, they could step into a much deeper process. 
    - I would like to see this happen. Baby steps because we do have a runway. And I am not saying we should leave fat in the budgets. I am saying we should be smart about the way we go about this.
- Luca Prosperi: I agree both with Mark and Robert. But, in general, it is hard. We should also try to understand what kind of behaviors some procedures incentivize. 
- If CUs start fighting, trying to demonstrate who has more fat to cut or who needs more money, we might have to spend our time lobbying and in politics within the DAO, even more than we currently are. 
- Instead, if we are going for a more homogeneous request of _best effort_, we might find ourselves in a position where all the CUs start a negotiation between MKR holders about the number they would have to stick to.
- I know this is imperfect, but we should consider the ramifications of behavior that some mechanisms might trigger within the DAO.

[34:48](https://youtu.be/ysP-orYyapk?t=2088)

- Chris: The surgical approach will be an intractable political mess if we try to do that across the entire DAO. Although, there might be a good hybrid approach. 
- Suppose MKR holders say they would like to reclaim 10% across all CUs. You could either find that 10% and send it back or decide on the surgical approach. CUs could have a say in what is viable for them with this hybrid approach. Thus, not having to be bogged down in politics and micromanagement--which are things that the DAO does not do well--.
- If any given CU believes they have done a considerable amount of optimization or have a very aggressive roadmap, they could consider taking the surgical approach, where they would be required to justify their budget or make a valid argument to keep it, and MKR holders can vote on that.
- That is all I wanted to add. Maybe we do not have to choose option one or option three. We can do both.
    - Mark: I believe we should do the right thing, regardless of how hard it is.
- The process one would typically follow in a regular corporation is better dictated by hierarchy. In that hierarchy, top executive teams make the hard choices. Then, those hard choices trickle down through the organization. 
- Given the structure of a DAO and how decentralized it is, we would need an approach where the garden weeds itself. It would be better to have a target and everyone behind that trying their best. And if we cannot, we will have to go through a hierarchical approach. 
- Today, at our scale, maybe we could pull off the more complicated option. But I do not see it possibly working when the DAO is widely spread and has either CUs or meta-DAOs all over the place following their incentives. We will not be able to operate the DAO this way. 
- We might want to innovate on how to do this. Like I said: find an approach for the garden to weed itself, where the incentives are set so that CUs are already optimizing for their budget. 


[38:14](https://youtu.be/ysP-orYyapk?t=2294)

- Nadia Alvarez: I do not know if I will call it CU performance because that gives the sense of hierarchy; it is a little weird in the DAO; we need CU feedback because the only time I receive feedback is when I post about a proposal. That is too late. We may need quarterly reviews where other CU delegates, Maker holders to the community, can give CU feedback. Feedback will also help us reorganize priorities and initiatives inside the CU; with that in mind, we could cut expenses.
- I will use my CU as an example; when I was thinking about the new budget proposal, I proposed different budgets based on the initiatives that I would be able to run with each one of these budgets. If Maker holders wanted growth to do branding and marketing, then this is the budget we need. This is the part I need if it is business as usual without marketing, 
- Moreover, if it is like we have to go crazy with marketing, that is a priority: this is the budget that I need. All CUs - we have to go through that exercise by understanding where the DAO is going, what the priorities are, and the pining, the initiatives that we want to do with our budget, and then let them make our holders decide. We all should be able to do that; with this budget, I will be able to do one, two, and three. With this one, I could add this foreign initiative, and Maker holders decide if a bear market is a good moment to do that or not.
- Just cutting 10% of all budgets is possible; that is the easiest solution. It will be a good exercise for all of us to start thinking about our budget for these initiatives. Is this the right moment to do that? Or maybe we should wait a couple of months and redefine the budget and initiatives. I would like all of us to start thinking about a feedback framework and communicate; what are the budgeted initiatives to help us plan and execute?
    - Chris Blec: Just one comment I had was as kind of fresh eyes on all this. It does not seem to me, and correct me if I am wrong, that each CU does not have what I have seen; maybe it exists; maybe it does not like a metric that governance, the community expects it to achieve over any specific period. When each CU is created, it should not have some goal that it needs to achieve; whether it is the return on investment or some other KPI that it needs to hit to be measured against because the idea I gave in chat just now as if we had each CU present its proposed metrics that it needs to aim for and try to satisfy. Then those are voted on by governance individually. What does it need to achieve as opposed to whether this should exist? There will be push-pull on how far out hard we should push each CU, but then it would give us something to measure performance by but just based on like, this idea of just delegates, reviewing subjectively, it does not seem to match up with reality as far as what I might expect from like RWF versus what somebody else might expect from RWF. There are no hardcore metrics that I feel I could use. I want to throw that one idea out there, I see in the comments that there might be some metrics we could use for that, but that is not something I have seen consistently.

[42:54](https://youtu.be/ysP-orYyapk?t=2574)

- Robert: Chris, one of the things I will respond to with that is that yes, that is the goal. One of the challenges that we have, and I will use something very simple. For example, we unveiled a new piece of collateral; as collateral engineering services, we have a key role in that, but we are dependent upon many other CU. People are most likely to have touched that deal before coming into the pipeline. As it moves through the system, certain specific or granular metrics can be set, for example, throughput, but again, yet dependent upon many other CU. In the early stages of the current US form, CU created a tremendous amount of dependencies just because that is the way it was because of the bifurcation of responsibilities. In the context of a CU, performing well also has to look and ladder up to; yes, they have the mandate to perform certain activities, but did they achieve goals based upon what was Dai generation the key objective for the DAO? Was diversification the critical objective? What was the key objective? How did we each ladder into that? And we are missing that.
    - Chris Blec: I would want to add to what you just said, in a traditional company, from my experience, when you have departments of a company that do not have their responsibilities, independent of other departments, it is a pretty clear indication that that department should not exist independently. There are independent metrics that throughput and things like that. If there is no way to separate that from other units, then it is an organizational problem, but you are correct in that reviews of a unit that cannot control its throughput, its results would be counterproductive, as opposed to looking organizationally at whether that unit is positioned correctly.
- Robert: We will see. Now, what you are talking about redundancy, if each CU was truly independent, which I think is the direction - that a lot of the proposals that would like with MetaDAOs, and other things that I think will be proposed, is to have autonomy and independence, not autonomy truly. We can do whatever we want to do; it is obvious what this CU does, so here are the inputs and the expected outputs. That is where I have been building my CU to be more and more independent, not independent from the community, but the ability to execute, which is critically important. If you look around the ecosystem we have created by CU, find one CU that can execute independently and hold those metrics, and it would be hard to, it would be hard to find one. Maybe there is one, I do not know, but that is an organizational design we have due to the Dao being the Dao, at least currently. I am not saying it should stay that way. I would love to have specific objectives and goals and share how I delivered those goals with my CU.
    - Chris Blec: It seems like MetaDAOs would worsen this. If everybody is expected to act independently on their own, I do not see how; if they cannot do it now, how will they do it in that structure? That is a side chat, I guess.

[46:59](https://youtu.be/ysP-orYyapk?t=2819)

- Payton Rose: Awesome. There is a lot of good chat here. There is a lot more to cover on this topic. Rather than just cash flow effects and how decisions are being made. A forum is a great place to take a lot of these conversations that are going on. We will have a new signal request related to the presentation you just saw; I encourage everyone to get to the forum and write their thoughts down in a more long-lasting manner.
- Mark says that more delegates wish to weigh in on this topic. We did hear from Chris. I will show you the results of this poll. I was unsure if I should share the first one because I did not want to distract the presentation. I think that is about as many people participated in the first one. I will end it there and share the results. As far as the Delta, we can go into that later. However, it moved up the understanding ladder a bit, which is nice. We might be doing these more targeted in the future. I just wanted to test it out today to go as far as engagement and feedback for us as presenters.

## Discussion

### Prioritization Poll

#### Payton Rose

[49:39](https://youtu.be/ysP-orYyapk?t=2979)

![Key Points from last week](https://i.imgur.com/0lszwkc.png)

![Technical Resource Deployment - Priority Sentiment Update](https://i.imgur.com/eXvx8AW.png)


- We pointed out last week that limited options are being rated by voters, which was good feedback because that means we should only prioritize a few items rather than trying to plan up a longer list of them. On the technical side, Compound D3M was a clear leader, and core crypto collateral, if I can get that tongue twister app was a strong leader in the collateral class sentiment poll. We also saw Maker teleport rank pretty highly as a technical resource and noted that reward assets were absent from many votes in the class sentiment poll. Let us look at what is changed from last week to this week. Number one, we have this awesome tool that you will get to see a little more from data insights that can show if we run the right choice simulation out to the very end rather than stopping, and 50%, you can see all the options stack up there. You will notice abstain crept into there; there was a good post by Kianga from Maker Invest about why they were abstaining and the feeling that delegates should not be making these decisions. I recommend checking that out; that is valuable feedback for us and the CU.
- We saw quite our onboarding, still very highly ranked, even though it is in fourth there. That is because the rank choice format prioritizes the top option, so it is worth calling out that it is still people's and their top three for many voters due to how ranked-choice works. As I said, you only get down the ladder of your list as your first choice becomes removed from voting, which does not happen if your first choice happens to be the most popular. We saw more participation, mainly in line with what we reported last week, but still good to get more voters' inputs, and still, most people are ranking very few options. Overall, I would say that on the technical resource side, not much has changed.

![Collateral Class - Priority Sentiment Update](https://i.imgur.com/bTFyf2I.jpg)

- Let us go for the Collateral Class - Priority Sentiment Update. We saw some more voters here, perhaps even a response to my call last week that RWA was missing from many of the top voter's rankings. We also had some delegates and regular voters come in weighing RWA. You notice they are still down in fifth due to the bias I discussed earlier. The other item that did pop up in a few people's lists but may not reflect on the outcome is the Alternative Ethereum-based Crypto Collateral, featured in several votes in the top five. Again, because it did not capture the top one or two for most of the large voters, those results were not very impactful at the end of the IRV simulation.
- Again, more participation, but we saw a difference here: we want to highlight how the votes are going. The people here in the call and on the forums may disagree with how that votes; we can voice their sentiment or change the rankings if they have been convinced based on our discourse. That does it for my rundown. I want to make sure today has plenty of time to share this tool they developed. It is worth noting that this was made with the priority polls in mind, but it will work for all IRV votes as well, which is great because obviously, the voting poll wants to show which option is winning, and the valuable information sometimes is how other options are ranked and how close those rankings become, which is not always super apparent if you are looking at the list of submissions on the portal there. Again, this is no criticism of DUXs because their job is to display the winner. Whereas if you are into the data or the changing sentiment, you want to dig deeper into how people's rankings are going. I will ask Thomas to stop sharing your screen that way, Tadeo can take it over and show us this tool that they designed over data insights.

[54:40](https://youtu.be/ysP-orYyapk?t=3283)

- Tadeo: As Peter mentioned, the intention was to help with the sentiment polls, but the same application can help with any other rank poll. We have left the scope open, but we will be happy to separate the applications if they are further requirements or just for sentiment polls. When you enter the page - [ranked-polls.herokuapp.com](https://ranked-polls.herokuapp.com), you can select the poll, and here I will just use one of the actual sentiment polls to demonstrate what this little simulation tool can do. I hope everyone around here knows that with instant runoff voting, every voter orders their options in preference. Those provinces get some jobs, and then in every round or cycle, we eliminate the option with the least amount of support. We do that to be really up to the point where we get the winning option; as mentioned previously, there are two sub-conditions. One is whether there is a single option remaining, which is what we see here on the right-hand side. The other is that the simulation should stop once an option has gotten more than 50% of the votes.
- In our case, to show you the full work there, we let it run, which means that in some cases, some of the options down the list might flip a bit up and down. However, again, the winning option will always remain the same. For example, Peter mentioned that Compound D3M was initially selected with 27,000 MKR sports. Then the next up was Maker Teleport with 7000. As we can see, offer the rounds, these options at the bottom start disappearing to the point where we arrived here where the Maker Teleport is only up with the Compound D3M. Then finally, in the final round, this Maker teleport disappears into the discarded votes, especially mentioned described votes. This is nothing negative; we want to show people whenever they order preferences, and maybe let us say they only add to preferences. On the third, when the second preference disappears, your votes essentially are, in a way, discarded. While if you add more preferences, you get a voice in other options. I see the lovely thing about this is that you cannot only see this, but you can also stimulate your thoughts. If you click here, we load your preferences; you can select them, and in this case, I will say that I want this as my first option, then the Teleport, and finally, the Compound D3M, and just for a sec here, you can put any amount of MKR, I will put 5000 just to show you a little example, I have already tried to remove a bit around them the routes.
- As you can see, the only big differences are my votes coming in here, and this is clean, which stays in the running up and round six, where it disappears because it is the least favorite option. My votes get transferred to Maker Teleport, which remains there, and to the last round where Compound D3M wins, and Maker Teleport loses. In this case, because I added the Compound D3M, my vote gets transferred into Compound D3M, but then there is another vote, for example, here that they chose Maker Teleport solely. This vote essentially goes down into the discarded votes. Then here, we just have a summary of what we have seen. Various people mentioned that separate from the official implementation, have we considered staying as part of the simulation? So quite correct, we should be just ignoring them altogether. However, we thought it was useful to have it just to see how it pulls against other options. So the app is live. Happy to have everyone play around with it and have some feedback.
- If you are finding that you need something else that might be useful, something that we neglected to add but to be interesting, it has the final MKR support count here. Anything they might think of here, we will pass it back to Payton.

[59:53](https://youtu.be/ysP-orYyapk?t=3593)

- Payton Rose: This stuff is cool because I wanted a way to talk about people voting for priority sentiment polls accurately. However, those insights iterated on that and were able to offer much more, and the stimulate feature is particularly interesting, especially if you are a delegate or large MKR holder. You can plug in and see how you are voting or changing your votes, even if you were to shift priorities that would affect the overall poll results. That is cool for prioritization sentiment if you are trying to send a strong signal, but it is also even cooler when real life is, the votes come down, and you are trying to decide: do I support the current budget or the current budget with an increase? Like, does it make a difference? If I put one of those first and the other ones second? Now, you can answer those questions for yourself. Thanks for being willing to showcase that. I think it will be a helpful governance tool for people. 
- Watching the chat is mainly about performance reviews and other things; I will give a chance to anyone who wants to ask either about the data visualization tool or prioritization polling. We will start there if there are any questions or comments. Then, we will probably circle back for an open discussion on some of the previous topics.
- I saw much tech continuing around performance reviews, MetaDAOs, and others. Typically, at the end of the call or scheduled for another 20 minutes or so here, we tend to open up to discussion, there is a lot of chat, so it would be kind of hard for me to pick one item to go to so if you feel strongly that something should be highlighted. Please do speak up now. Happy to propose something. If you think I picked the wrong thing. Welcome to stick in; tell me otherwise. There is a conflict between deciding on the overall strategy and what we do with the budgets first? That seems to be a pretty potent conversation in terms of decision-making. Which decisions do we make first, and how do they influence each other?

## Conclusion

### Payton Rose

[1:04:51](https://youtu.be/ysP-orYyapk?t=3891)

- Thanks for joining. Please continue on the forum. A reminder that next week's call will be later. That is our second trial run of running these last GNR hours of the month at a later time. We will see how that goes with our demographic polling. Excellent. It looks like the calendar might still need to be updated there. Next week, if you are joining us, it will be at 2100 UTC. Again, this is an effort to make calls later and ensure that other people can access calls. We will see how it goes. We will run our demographic polls and let that inform our decisions for the future. With that said, thank you again for coming out.

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## Credits

- Andrea Suarez produced this summary.
- Constanza produced this summary.
- Kunfu-po produced this summary.
- Everyone who spoke and presented on the call.