---
# System prepended metadata

title: 'Episode 156: August 26, 2021'
tags: [G&R]

---

---
tags: G&R
---

# Episode 156: August 26, 2021

## Agenda

- [00:00](https://youtu.be/qoqY96z6fFU): Introduction
- [01:35](https://youtu.be/qoqY96z6fFU?t=95): Governance
- [05:06](https://youtu.be/qoqY96z6fFU?t=306): Forum at a Glance
- [09:52](https://youtu.be/qoqY96z6fFU?t=592): GovAlpha Update
- [12:38](https://youtu.be/qoqY96z6fFU?t=758): Protocol Engineering Team Update
- [21:04](https://youtu.be/qoqY96z6fFU?t=1264): Oracles Team Update
- [29:40](https://youtu.be/qoqY96z6fFU?t=1780): Risk Team Update
- [34:12](https://youtu.be/qoqY96z6fFU?t=2052): Real World Finance Update
- [43:38](https://youtu.be/qoqY96z6fFU?t=2618): Growth Core Unit Update
- [51:58](https://youtu.be/qoqY96z6fFU?t=3118): Sustainable Ecosystem Scaling Update
- [59:30](https://youtu.be/qoqY96z6fFU?t=3570): MIPs Update

## Video

<https://youtu.be/qoqY96z6fFU>

## Introduction

### Agenda and Preamble

#### Payton Rose

[00:00](https://www.youtube.com/watch?v=WwPjQ9qTOzo)

- Hello everyone, and welcome to the MakerDAO Scientific Governance and Risk meeting number 156, taking place on Thursday, August 26, 2021, at 17:00 UTC. My name is Payton Rose; I go by `@Prose11` in the forum and chat. I am one of the Governance Facilitators at MakerDAO.
- We like people to get involved and ask questions or comments, so please, do not be shy if you have something to say.

## Weekly Updates

### Governance

#### Payton Rose
 
[1:35](https://youtu.be/qoqY96z6fFU?t=95)

- Three community greenlight polls are live, end on Monday, August 30, 16:00 UTC. https://vote.makerdao.com/polling?network=mainnet
    - Reminder: For the governance process, part of the ranking on how we do the green lights is based on the vote differential between the "yes" votes and the "no" votes.
- Ratification Polls for Monthly Governance Poll wrapped up on Monday, August 23. 
-  Executive Vote passed - [Vault Onboarding, 6s Updates, and Reducing Vault Liquidations](https://vote.makerdao.com/executive/template-executive-vote-vault-onboarding-6s-updates-and-reducing-vault-liquidation-ratios-august-20-2021?network=mainnet#proposal-detail)
-  Spoke with mandated actors; we will not be putting an Executive Proposal on Friday, August 27th. 

### Forum at a Glance

#### Artem Gordon

[5:06](https://youtu.be/qoqY96z6fFU?t=306)

[Forum at a Glance for Aug 20 - Aug 26](https://forum.makerdao.com/t/forum-at-a-glance-august-20-26/10032)

### GovAlpha Core Unit update

#### Payton Rose

[09:52](https://youtu.be/qoqY96z6fFU?t=592)

[GovAlpha Weekly Update](https://forum.makerdao.com/t/govalpha-weekly-update-2021-08-26/10034)

- Governance facilitator, `@LongforWisdom,` on vacation
- Met with DUX Proposed Core Unit, going over how GovAlpha uses the Voter Portal and what tools and additions could help GovAlpha.
- `@Sebix` has worked on forum tags, forum plug-ins, optimize forum organization, easier to navigate. Looking to implement plug-ins soon, will provide broader updates in the future. 
- Delegation - Yesterday was [Meet Your Delegate #04](https://hackmd.io/n5Ua9odyRFmifHQgoJQuBQ?view)
- Over 55K MKR delegated to Recognized Delegates, a quicker turnaround in comparison to 1-2 weeks ago.

### Protocol Engineering Team Update

#### Derek

[12:38](https://youtu.be/qoqY96z6fFU?t=758)

- Last week's Executive will be available tomorrow, adding MATIC and PAX-PSM.
- This week, we had a team review of the GUNI Oracle. Ari from Gelato Team joined us. We've added some tests, and UNI is now ready for next week's executive. We will probably set the debt ceiling from 1 to 3 million, so `@Prose11`, we can set the polls for that one for next week. 
- There were some questions around staking ETH. The Protocol Engineering work on this one is done. We are targeting mid to end September, depending on the Oracle sprint that's going to come. 
- We are starting to line up the next couple set of executives.
- There are conversations regarding a StETH-CRV Pool. We have conversations with Nik and Sam on how to use CropJoin to integrate with such a pool, so keep an eye out for that.
- Last week, we mentioned AAVE had completed a review. We created one outstanding PR, which we still want to merge. I am looking for a formal audit; I'm looking for different entities to get that to happen. 
- In terms of the forum, we had the [Collateral Onboarding Risk Assessment](https://forum.makerdao.com/t/solar-x-collateral-onboarding-risk-assessment/9977), which Ryan completed on SolarX. 
- We also had `@Talbaneth` post the [DssCharter](https://forum.makerdao.com/t/mip59-dsscharter/10028) today, in support of institutional vaults.
- There's been lots of good conversation about fixed-rate solutions. We will take some time in the next few weeks to review all these alternative options.
- On the Layer 2 side, we did a high-level review with the team on Arbitrum. The Arbitrum team confirmed they are planning to launch next week. However, they are planning to have an audit completed slightly after their launch date. We have some reviews to do on our side, and as part of our deep dive, we will be putting forth a document about the risk trade-off, the options, alternatives, and our role in it with the DAI bridge. There hasn't been much focus on Optimism because we've been focused on Arbitrum.
- On Monday, there was a mention that the PAX token name will be changing from PAX-USD to USDP, so there'll be some work for us to update that. However, I think the PAX PSM will remain unless we create a whole new type of statistic. 

#### Discussion

- Q: Is it still viable for the team to work on the Optimism because protocols like HOP are coming into the picture?
- A: We are talking to Chris from HOP; Chris on the L2 Team and Sam were having a conversation about engagement with their platform and the cross-chain transfers on the platform.
- A: Hop Protocol is going to introduce DAI support, but their solution is not perfect. They have various capital constraints. They need different actors in the system in order to work properly. It will be much more expensive for end-users to move their DAI between chains. With Maker, we can make it very cheap, with infinite liquidity. Secondly, having to stack allows us to do advanced actions, including Maker deployments between other chains. It's great that these protocols exist, but HOP requires over 300% collateralization ratio for 1 DAI, whereas Maker does not require that.

### Oracles Team Update

#### Nik Kunkel

[21:04](https://youtu.be/qoqY96z6fFU?t=1264)

- Last week, we delivered the MATIC oracle, and the Executive has passed since then.
- A new sprint began yesterday. The primary goal for that sprint is Staked ETH (StETH) onboarding with our pricing tools, Gopher and Setzer. Hopefully, we have a release candidate fairly soon. 
- StETH-ETH balancer pool is now available. Lido is giving liquidity mining rewards, in addition to the ones on Curve. That is good news because there would be two prices sources to query from, instead of only one, eliminating one of our risk factors leading to our initial avoidance from the feed-based oracle approach for Staked ETH. 
- Adding Staked ETH to ETH (StETH-ETH) LP Token in Curve
    - In its brainstorming phase.
    - Integration with the CropJoin adapter. 
    - Originally, CropJoin started farming the UNI rewards on UNISwap, but those ended. Then, we planned to use CropJoin for the SUSHI rewards on SushiSwap, but they were upgrading too fast.
    - Now, we hope to use CropJoin for the Lido rewards and potentially Curve rewards as well. You get the StETH yield, the Curve trading yield, and the Lido token yield.
    - One of the issues is that we don't get the Curve boosting, but the Curve yield is very minimal compared to the Lido yield and the staking yield. It does not play a major role; it's 0.25% to 0.35%, so you are only losing 0.10% or so. 
    - Project is at an early stage; there are no obvious blockers, the Oracle piece is still up in the air. 
    - Curve has a flash loan proof function that lets you query the price of an LP token. If that's the case, it should be very simple but requires further investigation.
- In conclusion, we've had some discussions about the Oracle Core Unit regarding product expansion and new products we want to do.
- Primary focus for the next couple of months is to get on other L1s and L2s. Nothing is blocking this, and it's a matter of committing resources. We are looking at chains like Optimism, StarkWare, and we want to be on Arbitrum. We want to be on some of the L1s like Solana and AVAX. The chains that are EVM-compatible will be much easier for us to do. Non-EVM compatible chains like Solana will require some type of short-term contracting or speak with the teams to discuss using their resources and support our oracle contracts. There is a potential for collaboration there. That's it in terms of the expansion of oracles themselves.
- In terms of bridges, we were tasked with the Optimism fast DAI withdrawal bridge. There needs to be an oracle to work, but the mechanism is about the same for every chain. You're utilizing the consensus mechanism that you have for the oracles but now using the consensus to say, "Did you see a transaction on the source chain? Oh, yeah, great, send a verification or signature on the destination chain." This will be great because you can have routers or message handlers on every chain. You create a standard, then have these message handlers on every chain. 
- Rather than specifically creating a bridge, such as from ETH to Optimism, you can create a bridge from ETH to anywhere else that supports this standard. Conceivably, you can have Solana send messages to Avalance, not just ETH to that or ETH, but across chains. That's very preliminary, and we are starting to hash out the details, and it looks like we will be in a cross-chain kind of world. Bridges are going to be a great product going forward.
- The economics of the bridges would be better than price oracles. With price oracles, you have to run them continuously and keep pushing prices, whether or not anyone is using them. With Bridges, as long as you run a margin on top of the transaction cost, it's a guaranteed profit instead of price oracles, which require more care and higher risk.

### Risk Team Update

#### Primoz Kordez

[29:40](https://youtu.be/qoqY96z6fFU?t=1780)

- [Maker Vault Debt Liquidation Protection Metrics](https://forum.makerdao.com/t/maker-vault-liquidation-protection-analysis/10026) - Analysis of the number of users and the debt protected against liquidations with various protection protocols. We are planning to automate these metrics, assign users a risk score. With the tools developed, we'll track vault protection, DAI utilization activity, and the assignment of risk scores. 
- Finalized terms and parameters for a 100 million Polygon treasury loan. The terms are similar for the next institutional Vault: origination fee, collateral ratio maintenance requirements, and fixed rate. It has more conservative risk parameters, MATIC is far less liquid than ETH or Bitcoin. We will see if they agree to proceed forward.
- Potential framework for this institutional or treasure-type offerings because the process is currently ad-hoc, and standardization is needed. 
- Progress on NEXO institutional vault risk assessment. Awaiting feedback on initial parameters, but recent analysis shows that parameters are not in Maker's favor. A signal poll is being prepared to address this.
- Finally, exact parameters changes and timeframe will be posted for offboarding KNC type vault as well as offboarding other collaterals. 

### Real-World Finance Team Update

#### Sébastien Derivaux

[34:12](https://youtu.be/qoqY96z6fFU?t=2052)

- The big thing you just saw is that the 6S executive has passed. 
	-  Matthew Rabinowitz: 
		-  With the deepest humility and on behalf of the entire 6S Capital Team, I would like to express gratitude to those that voted in favor of the executive and granted the debt ceiling, for those that voted the entire proposal, and to countless stakeholders along the way. It has been a long haul. A special shout out to Greg at RWA Company and to all the Maker representatives, specifically Martin. He has been behind the scenes and spent countless hours with Legal Compliance for the Cayman structure. It would not have been possible without him. I cannot also forget those that helped along the way and the encouragement and support everybody gave. Thank you so much. 
		-  Since some of these discussions started back in the first half of 2019, the Senior Secured structure represents a huge milestone not only for 6S but the DAO as a whole. We are thrilled to be able to do this milestone together. We are committed on this end to always be an ever-present community member, as one of those that will choose to pay it forward. As a community, we build this entire ecosystem. 6S team is humbled by the trust the community placed in our hands. Even if it is more of a political and reputational nature, we will work tirelessly to ensure the judgment to allocate that trust and that risk of capital, but relationships matter. I closed with gratitude with Optimism, which started down a path of tapping into the existing credit system with a secured structure, and we did it together. We have only scratched the surface of what we can accomplish with the Delaware Statutory Trust. The journey on this is only beginning. 
		-  As far as the next steps, we will be doing as small of a test transaction as possible. Moving an as small amount of money as we can, probably by the end of next week, to send it to the Trust structure and send it back. Then, document every single step along the way. Document all the money that moved, whether or not it is an Ethereum transaction or with the bank itself, the Trust account itself.  So that we can put together a report so that the community can feel comfortable that the entire circuit is well established. Complete the crawl-walk-run model. As far as when we will be able to use this structure, as any Senior Lender will tell you, you cannot rely on a structure until you have it, and until we had it, we did not have it. There is going to be a time where we have a structure in place. Until we test this circuit, it is not battle-tested, and until it is battle-tested, I would not rely on it, and I would not rely on it for the DAO's money. There might be five to six weeks before we can route our first deal to it; I hope it's less. Crawl-walk-run, but for now, I probably need a vacation. 
- We have published a Risk Assessment of SolarX, thanks to Christian. The Governance Poll is expected on Monday; everyone can vote next week. 
- On the finance side, Mark has published the financial analysis of the institutional Vault. We are losing an opportunity to make a lot of money if we do it, but there might be some strategic reason to do it. I will let you see the details, and there will be a tool for the community to voice their opinion. 
- We have had some discussions inside the team about what decentralization is and what it means. We are using the word a lot, and actually, when we go into detail, we do not know what the word means. There are so many things that can be meant as decentralized or not. For instance, in my view, if MakerDAO makes a decision, it is decentralized because MakerDAO is decentralized. Still, for other people, if MakerDAO makes a decision, it is centralized because MakerDAO did make a decision. It is always decentralized and centralized on what scale, and there are many dimensions to assess. 
- We are looking to expand the team significantly on many forms. Now that we have a lot of RWA staff on MakerDAO, we can reach new people and people working in finance and not in crypto. Before, people in finance were not super interested in joining a crypto project, especially one that did not have any RWA.
- We have opened a partnership with GST Capital. Suppose the only thing we get from this partnership is for me to pick the brain of RAI, which is knowledgeable in securitization. In that case, that is more than enough for me. There is not much to see in this partnership; maybe we get more. If we do not, it is not the end of the world.
- Lucas will join to work on an audit on Fortunafi. He is not able to join full-time, but he will work on it a little bit. Again, he is super knowledgeable on securitization; he worked for many years in London for Hedge Fund. He is ready to do some securitization. 
- Many people know a lot about securitization in the firm currently, and that is because we are looking for people to join. There is still one full-time position to be onboarded, which should be done soon because we have some candidates. 

#### Questions 
    
- Payton Rose: You mentioned that audit for Fortunafi. I know we have the other Centrifuge people on the call here. Do we have any timeline on when we might see some utilization of the recently approved Centrifuge facilities? I think we have three new DROP Vaults that still have not been used yet.
    - On ConsoleFreight, this will take a little time because we are doing some other stuff. Many changes to the middleware, so it is better. For Harbor Trade Credit, Will is working on it. Fortunafi, we are doing a deal with Vipe that will drive most of the flow. We have been speaking with Vipe for about two months. Opening the polls was delayed, so it will take a bit of time. 
	- Lucas: Now that they are in place, there is a lot of prep work to do to start using them, which should come soon. This will happen as fast as these asset originators have assets that they believe are good and should be financed. We do not want to rush it because that would mean the DAO would take the wrong kind of assets, and none of us would like that. 

### Growth Core Unit Update

#### Nadia Alvarez

[43:38](https://youtu.be/qoqY96z6fFU?t=2618)

[Growth CU weekly update](https://forum.makerdao.com/t/growth-cu-weekly-update-august-20-26/10029)

- We are in conversation with Bankless DAO to see how we can work together with them. We will help them to create a proposal which we have just started working on. They will help the protocol in spreading the message. Also, they will help us find out what message we want to communicate mainly to the crypto world, which I think we have a debt with. The idea is to use these Bankless DAO for different things like creating Alphas, posting Twitter, have a crypto Twitter army, sheet posting, memes, and that kind of things but around a message. This is what is powerful. We all saw what they did with ETH's money, so we want to show the community that Maker has been there, Maker is still there, and we are continuously creating new things. We are one of the first big protocols that are completely decentralized. We are working as a real DAO without a Foundation in the middle, and no one is talking about that. We want to start using this Bankless DAO to talk about this and communicate it. It will be a nice experiment. It will be like how things will be in the future, where we will see a lot of DAOs working with DAOs and providing services between DAOs. 
- We are also maintaining conversations with the projects that we thought we should offboard because of the utilization. We talked with Loopring and discovered that they are using the Vault. Probably they are the only user of the Vault. They are working with a product called ETHPort that will help the composability between L2 and L1. When they launch it during Q4, LRC holders - ETH, USDC, and WBTC holders - will be able to, through Loopring, open a Maker Port using that composability between L2 and L1. We are making suggestions to the community. We should onboard them because they are creating an interesting use case, so LRC holders will want to use Maker Vaults when they release this product.
- We started working closer with the DUX Team to help them talk with the main custodial solutions to integrate the Voting Delegation System. This is great for both of the teams. We are helping them with all the admin tasks of convincing someone to integrate something. For us, it is another conversation point to have with these custodial solutions.
- In the updates you will find in the forum, I did not include what we are doing with the institutional Vaults. We are in conversations with Polygon. Tomorrow, I will review the terms that the Risk Team created. In case they accept it, the idea is to convince them to use part of the loan they will ask to deploy Dai in Polygon. We want to use that Dai to increase Dai adoption between the deployed projects in Polygons. We will have that conversation tomorrow, and I will share the updates next week. 
- As Primoz and Sébastien mentioned, we are working on a signal request. After reviewing the answers we got from the community regarding the financial analysis Mark did for the institutional Vaults, we will present different options for this Nexo institutional Vault to the community. One of the options will be to wait for one of these fixed-term solutions that we saw in the forum. But we think that an institutional Vault is different from a long-term Vault. We think that institutional Vaults will be something that we will do just for some institutions, like those that will bring a lot of Dai into the market and institutions that understand and manage in a very safe way their Vaults. We see the long-term Vaults or these fixed-term solutions as a fixed-term solution for everyone who wants to open up a Vault and have access to these terms. It is a good first step towards having these kinds of solutions. These solutions that others are creating: Aave with Aave ARC and Compound with the institutional solution. We are going to present the signal request to the community and see how it goes. 
- The star of the week! An Indonesian exchange that is going to integrate Dai next week. In the Tweet of the week, we talk about how the Maker community decides to include new Collaterals into the system. 

### Sustainable Ecosystem Scaling Update

#### Juan Guillén

[51:58](https://youtu.be/qoqY96z6fFU?t=3118)

![](https://i.imgur.com/2MINCvQ.png)

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

![](https://i.imgur.com/Vl0qxj6.png)

![](https://i.imgur.com/QSJUf0M.png)

### MIPs Update

#### Pablo

[59:30](https://youtu.be/qoqY96z6fFU?t=3570)

[Weekly MIPs Update](https://forum.makerdao.com/t/weekly-mips-update-50/9992)

![](https://i.imgur.com/TkCoL5A.png)

![](https://i.imgur.com/VT8ZxuK.png)

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

![](https://i.imgur.com/v2nY3xM.png)

![](https://i.imgur.com/o7wdTnj.png)

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

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

![](https://i.imgur.com/dI3d9Jh.png)

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

![](https://i.imgur.com/S9TBQxA.png)

- I forgot to add Monkey Irish's facilitator onboarding for Collateral Engineering. It is on the weekly MIPs update that I posted on Monday on the forum. 

[Suggestion Box](https://app.suggestionox.com/r/GovCallQs)

## Common Abbreviated Terms

`CR`: Collateralization Ratio

`DC`: Debt Ceiling

`ES`: Emergency Shutdown

`SF`: Stability Fee

`DSR`: Dai Savings Rate

`MIP`: Maker Improvement Proposal

`OSM`: Oracle Security Module

`LR`: Liquidation Ratio

`RWA`: Real-World Asset

`RWF`: Real-World Finance

`SC`: Smart Contracts

`Liq`: Liquidations

`CU`: Core Unit

## Credits

- Artem Gordon produced this summary.
- David Utrobin produced this summary.
- Gala produced this summary.
- Zainab Nisa produced this summary.
- Kunfu-po produced this summary.
- Everyone who spoke and presented on the call, listed in the headers.​