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# System prepended metadata

title: 'G&R #163 Snippet'
tags: [Snippets]

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tags: Snippets
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# G&R #163 Snippet

This `snippet` includes Governance, MIPs, forum updates, and Core Unit team discussions from the MakerDAO Governance and Risk Call #163. 

## General Updates

### Votes

*Executive:*
- October 8th: Offboarding Vaults, MKR Vesting, and Core Unit Budget Distribution - Passed & Executed
- There will NOT be an executive proposal up for vote tomorrow.
- Only one polled item ready for action
- Much of the Exec team traveling to Lisbon

*Polls:*
- 4 Weekly Polls Passed
    - Add stETH (Lido Staked ETH) as a new Vault Type
    - Nexo Institutional Vault Onboarding 
    - Add the Aave Direct Deposit DAI Module (D3M) 
    - Increase the GUNIV3DAIUSDC1-A Debt Ceiling 
- 1 Weekly Poll was Rejected 
    - PaperImperium Supplemental Compensation
- 6 Ratification Polls ongoing (end October 25)
- 1 Greenlight Polls active (voting ends Mon. Oct. 18th)
    - [CurveLP-stETH-ETH (Curve stETH-ETH LP Token)](https://vote.makerdao.com/polling/Qmd1qpHU?network=mainnet#poll-detail)

### MIPs

[Weekly MIPs Update #57](https://forum.makerdao.com/t/weekly-mips-update-57/10921)

- The Ratification Polls for October’s Governance Cycle will be running until Monday, October 25th.

### Forum at a Glance

[Forum at a Glance: October 7th - October 14th](https://forum.makerdao.com/t/forum-at-a-glance-october-7th-october-14th/11003)

## Team-led Discussions

### Dai Par - PSM Parameters 

#### RWF, PECU and Risk

[Signal Request: Set PSM Fees to 0](https://forum.makerdao.com/t/signal-request-set-psm-fees-to-0/10894)

- SebVentures: The idea is to put at a peg where 1 DAI is always equal to 1 USD.
    - Most people still want to use USD as their unit of currency, which we should accept and allow to create this fixed peg.
    - We are currently making users pay for the benefit of using DAI, which is not nice.
- This should be fine and is not a technical issue from the PECU side.
- A conversation in this should be market participants moving to and treating DAI as Par.
    - While this is helpful for Maker, it introduces risk to other protocols.
- PECU has spent a lot of time trying to reduce USDC exposure. This signal completely shifts that direction. 
- There are many open-ended implications from setting the in/out to 0%. 
    - The band is very tight; maybe we can set it a little higher. 
    - Is it worth fixing such a potentially detrimental issue when we can try to utilize it as a benefit instead?
- In terms of the Clean Money initiative, we can convert the USDC into ESG bonds that are liquid enough to invest in Clean Money projects.
- Avoiding this or showing the public that we are not trying to show this is bad for MakerDAO PR.
    - USDC may undergo regulatory risk, which can create collateral damage to Maker.
- We can externalize the risks here by using LP pools. However, there may be a small fee involved when converting to USD.

### Governance Security and Flexibility: ESM + Delay parameters 

#### Rune, Protocol Engineering, and Risk

[Restarted poll [Signal Request] Raise the ESM threshold to 15% and increase the Governance Delay to 4 days](https://forum.makerdao.com/t/restarted-poll-signal-request-raise-the-esm-threshold-to-15-and-increase-the-governance-delay-to-4-days/10896)

ESM:

- Emergency Shutdown Module is a game theory mechanism that exists as a minority threat protection.
    - Used if a majority of MKR holders vote for something without popular consensus.
    - Used during a malicious governance attack.
- 150,000 MKR seems like a large number considering how much MKR is being used now in governance.
- We do have an unknowable threshold considering empty or lost MKR.
    - If we set the ESM threshold too high, we lose the ability to trigger ES quickly enough.
- LongForWisdom believes that 150,000 MKR may be a bit too high.
- There is potential for a profitable financial incentive to put MKR into ES if shorting MKR.
    - Or DAI can be bought at a discount below Par.
- A very, very significant amount of capital would be required to complete and ES successfully.
    - Requires buying, borrowing, and accumulation of ETH.
- Governance decisions should use MKR required to be in a wallet over a certain period of time.

GSM:

- Governance Security Module delay gives more time to governance for solutions before pressing the 'Nuke' button of the ES.
- Response time to critical issues is usually within 24 hours.
    - a 2-day GSM is good enough already, if not too long. 
    - A 4-day GSM should still allow for a weekly governance cycle.
    - We can propose a 3-day GSM to meet the middle-ground with everyone's opinions.
- However, during a significant event like a market crash, 4 days is way too long.
- We should analyze and report some risks for the GSM comparing various days.
