Episode #200: July 21st, 2022 | Editorial Summary
Agenda
00:02: Introduction
03:06: Votes and Polls
04:11: MIPs Update
8:30: Weekly Forum Recap
13:00: Discussion: AAVE Stablecoin GHO Implications
43:03: Discussion: MKR Token Decentralization Views
1:22:47: Conclusion
Video
Link

General Updates
Votes
Payton Rose
Polls: – 3:13
Executive Votes: – 3:37

MIPs
Pablo
4:10

Weekly MIPs Update #97

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July’s Formal Submissions – 4:36
Proposals in RFC – 4:52
Special Purpose Fund – 5:31
Core Unit Budgets – 5:47
Core Unit Offboarding – 6:19
Facilitator Onboarding–6:58
Amendments – 7:10
:mag_right: Ratification Polls 2nd week is drawing close. Four days until they close on Monday, July 25st.

Weekly Forum Recap
Artem Gordon
8:30

Post: Weekly Forum Recap July 14st - 20st, 2022

News & Announcements:

Delegate Migration
Call for Grant Applications
Signal Requests:

Reset Delegation Metrics for Hasu
Discussion
AAVE Stablecoin GHO Implications
Payton Rose
13:00

Payton: AAVE will launch its stablecoin, which could be a competitor to Dai. Their setup is going to be different with designated mentors they call facilitators. It won’t be as permissionless as the Maker system. However, there are several scenarios with similarities.
14:30

Raphael: I reached out to the guy who wrote the proposal at AAVE and asked them to present because they want to do a lot of bridge building with Maker. He said the relationship developer would come but turned in sick. He’s waiting to come on for another week if we still want that.
16:08

monet-supply: AAVE is the clear leader in liquidity markets across, not just in Ethereum but in most of the other EVM chains. Depending on how they set up their parameters, they could favor their stablecoin versus others. Dai has great support from AAVE right now, which has been helpful in Dai’s adoption across all these chains. We will need to consider the options if Dai starts to get iced out.
17:55

Tim: AAVE is committed to using Chainlink as their main Oracle. It’s one of the most compelling reasons I would not touch GHO, as opposed to Dai, which I use.
UltraSchuppi: We should all relax. USDC announced it launched at Consensus New York in 2018. At first, I was scared. However, if USDC did not launch, we would have difficulty defending the software or the hardware. We benefited from that centralized stablecoin. GHO will either be irrelevant or grow alongside us. We are not in a consolidation phase for stablecoins yet. This will take a couple of years until we will have real competition on that end. We should not be fearful.
21:19

Kianga: From a narrative standpoint, some people are reading this as maybe a weakness of MakerDAO. Other parties may see an opportunity to take market share or dominate. I have seen some sentiment on Twitter and indirect conversations that just the optics of it feel like a challenge. Does it reflect us losing our footing or struggling in certain areas that have been well publicized?
David: This is the business world; people are out for our market share. Dai is our core product. The level of alertness coming from the community is not overstated. The cross-chain L2 future that Maker and AAVE are pointing towards already operates on certain other layer twos and side chains. The GHO token could very easily be integrated into all their cross-chain activities. It can end up leading the way where Dai might not be leading.
25:00

Payton: How does Dai’s scaling tend to go with or against the general stablecoin market?..
27:56

Lucas: The main advantages I’ve seen in terms of how GHO can get market share are…
37:20

David: Back in the Foundation, the use case for Dai was manifesting well in South American markets. People liked using Dai when it was relatively cheaper to transact on layer one. People liked using it because it was a currency their government couldn’t arbitrarily just shut down. They were a little bit more sovereign. They could access financial services, like collateralized borrowing at a “risk-free rate” in the form of the DSR, on their smartphone.
Then, the vision was to get people globally to financial tools digitally. Once L1 fees started going up, the entire retail market got priced out on both the usage and borrower side. Our product was completely blown up by layer one gas costs; that is why there’s such a huge emphasis on the multi-chain world. One of the truest uses for Dai lies within retail, emerging markets, and access to financial services that normally require an intermediary. Until we see a popular layer two networks emerge with much retail and organic user growth, we should be heads down building.
Discussion
MKR Token Decentralization Views
Lyt
43:24

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MKR Token Decentralization: Wallets – 44:42
MKR Token Decentralization: Token Distribution – 58:41
Forum Post – MKR Token Decentralization Views
Q&A
45:59

Payton: Given the number of wallets comprising the top 20% of MKR tokens, it seems like without convincing a portion of the big holders to sell, it would be hard to get this number to increase. How do we impact this number?
47:21

Kianga: Did you analyze where all the supply is? Large holders might want to keep their MKR in a custodian instead of what is required to vote. Do we know what percentage is held by third-party custodians–such as Coinbase, that requires a technical fix in terms of participation–? Do we have the big picture of this subset relevant to the whole ecosystem of wallets held in institutions?
48:30

Kianga: Someone commented on the Forum or Discord that Coinbase said that by Q4, they would start working towards enabling custody MKR to participate in governance. Has anyone on this call been part of those conversations? Can anyone comment on the details?
1:00:42

Slide – MKR Token Distribution
Kianga: Can anybody else share how they are interpreting this data and its significance? I look at this, and I can see what it is saying to me, but I am trying to make an association with what it means.
Kianga previously referred–57:37–to the reading of data and the importance of the spoken word when understanding the nuances of these graphic charts.
1:02:03

Raphael: Voter behavior is more interesting to me, and I did not see it addressed in this analysis. There will always be power laws in everything that can be traded financially; that is unavoidable, but how does it affect governance? In terms of decentralization, that is where the rubber meets the road.
1:03:47

Kianga: We keep ruminating on the same questions: How do we get more governance participation? In what ways? What are the limitations of that, and how can we address them? Analyzing the data is key, as well as defining our limit.
1:07:13

Raphael: There is no easy answer to this, but the fundamental question is: how do you incentivize participation? Maybe you have to pay for voting, but that patch could open up a new world of problems. I think it is something that we definitely should think about and experiment with. Also: I believe the way we do things at the moment is not set in stone.
1:12:00

Speakers: Continue to talk about different approaches to incentivizing participation.
1:14:27

Chris: There seems to be a pattern with the G&R Calls: at the time of Episode 100th, we struggled with this insatiable DAI demand. We did not have a PSM yet, or any way of dealing with this. At the end of that call, I said: “This is a great problem to have. Many startups would die to have this level of demand. This is an opportunity or a problem that is an opportunity”. And now we are in the same situation, only a 100 episodes later, two years after.
1:17:18

Chris: Continues to talk about the crisis in governance and the future of MakerDAO in the next two years.
1:21:41

MakerMan: Continues to talk about the crisis in governance and the future of MakerDAO in the next two years.
Conclusion
Payton Rose
1:22:47

Happy 200th G&R Meeting, everyone, and happy birthday, @MakerMan! :confetti_ball:

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Credits
@Sol_Invictus produced this summary.
@Larryag produced this summary.
Artem Gordon produced this summary.
Everyone who spoke and presented on the call.