# Episode 194: June 9th, 2022 | Semi-transcription Summary

## Agenda

- [00:00](https://youtu.be/ZMuA4wxjeec?t=1): Introduction
- [01:30](https://youtu.be/ZMuA4wxjeec?t=91): Votes and Polls
- [05:05](https://youtu.be/ZMuA4wxjeec?t=305): MIPs Update
- [09:30](https://youtu.be/ZMuA4wxjeec?t=570): Forum at a Glance
- [18:25](https://youtu.be/ZMuA4wxjeec?t=1105): Initiatives Update: Brand Team by Growth Core Unit
- [32:40](https://youtu.be/ZMuA4wxjeec?t=1960): Initiatives Update: [Makershire Hathaway](https://forum.makerdao.com/t/mip55c3-sp4-adding-a-special-purpose-fund-makershire-hathaway/14643)
- [1:00:20](https://youtu.be/ZMuA4wxjeec?t=3620): Discussion: Open Mic
- [1:15:55](https://youtu.be/ZMuA4wxjeec?t=4555): Conclusion

## [Video](https://youtu.be/ZMuA4wxjeec)

## Introduction

### Agenda and Preamble

#### Payton

[00:00](https://youtu.be/ZMuA4wxjeec?t=1)

- Hello, everyone. Welcome to the 194th MakerDAO weekly Governance & Risk meeting. My name is Payton; I go by Prose11 online. I am a Governance Facilitator at MakerDAO. Today is Thursday, June 9th, 2022.
- I want to thank everyone on this call. We have a couple of unit members, delegates, and other interested parties, people who are curious about how Maker is doing, as well as the issues we are grappling with as a DAO.
- As always, this is a recorded meeting--_Hello,_ if you are watching on YouTube!--. Attending to that, let us try not to speak over each other. There are a couple of facilitation tools I would appreciate you using if you can.
- If there is something you would like to add after the current speaker finished talking, you can use the _raise hand_ feature on Zoom under _reactions._
- If you are unable or unwilling to hop on the mic, you can leave your comment in the chat, and we will be happy to go through it once it is conversationally appropriate.
- That, more or less, settles it for rules. Let us kick things off with our agenda.
## General Updates

### [Votes](https://youtu.be/ZMuA4wxjeec?t=91)

#### Payton

*Polls:*
- No Concluded Weekly Polls
- 2 Ongoing Greenlights - Voting Ends Monday, June 20th
- [**KREDIKA** (Kredika LTD)](https://vote.makerdao.com/polling/QmWTfWad)
- [**XSGD** (StraitsX)](https://vote.makerdao.com/polling/Qmd4RbRq)

*Executive:*
- [**Last Executive**](https://vote.makerdao.com/executive/template-executive-vote-parameter-changes-starknet-bridge-limit-and-authority-changes-recognized-delegate-compensation-sh-001-budget-distribution-june-08-2022#proposal-detail) - Passed, pending execution:
- SH-001 Budget Distribution and Streams
- Recognized Delegate Compensation
- Parameter changes from MOMC
- Step 1 for Vault Offboarding
- Starknet Bridge Limit and Authority Changes
- Next Week - _No planned Executive_

### [MIPs](https://youtu.be/ZMuA4wxjeec?t=305)

#### Pablo

[Weekly MIPs 90](https://forum.makerdao.com/t/weekly-mips-update-90/15648)


#### [_**Junes's Formal Submissions**_:](https://youtu.be/ZMuA4wxjeec?t=315)

##### [_**Top-Level MIPs**_:](https://youtu.be/ZMuA4wxjeec?t=315)

[MIP74: Permissionless Open Market Operations](https://forum.makerdao.com/t/mip74-permissionless-open-market-operations/15095)
<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>

---

[MIP75: Task Forces](https://forum.makerdao.com/t/mip75-task-forces/15093)
<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)
<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>

---

##### [_**Core Unit Budgets**_:](https://youtu.be/ZMuA4wxjeec?t=343)

[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)
<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>

---

[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)
<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>

---

[MIP63c4-SP4: Onboard/Amend Keeper Network - Keep3r Network](https://forum.makerdao.com/t/mip63c4-sp4-onboard-amend-keeper-network-keep3r-network/14321)
<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>

---

##### [_**Core Unit Facilitator Onboardings**_:](https://youtu.be/ZMuA4wxjeec?t=387)

[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)
<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)
<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/ZMuA4wxjeec?t=400)

[MIP39c2-SP33: Adding Lending Oversight Core Unit (LOVE-001)](https://forum.makerdao.com/t/mip39c2-sp33-adding-lending-oversight-core-unit-love-001/15098)
<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://youtu.be/ZMuA4wxjeec?t=429)

[MIP55c3-SP4: Adding a Special Purpose Fund - Makershire Hathaway](https://forum.makerdao.com/t/mip55c3-sp4-adding-a-special-purpose-fund-makershire-hathaway/14643)
<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 various 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)
<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>

---

#### [_**Proposals in RFC**_:](https://youtu.be/ZMuA4wxjeec?t=466)

[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>

---

[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>

---

[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>

###### :mag_right: _**The Ratification Polls for these proposals will go up on Monday 13 and run for two weeks until Monday 27.**_

### [Forum at a Glance](https://youtu.be/ZMuA4wxjeec?t=570)

#### Artem

Post: [Forum at a Glance: June 2nd - June 8th, 2022](https://forum.makerdao.com/t/forum-at-a-glance-june-02-08-2022/15703)

Video: [Forum at a Glance](https://youtu.be/ZMuA4wxjeec?t=570)

- [_**News & Announcements:**_](https://youtu.be/ZMuA4wxjeec?t=589)
- [Chris Blec Delegate Platform](https://forum.makerdao.com/t/chris-blec-delegate-platform/15544)
- [Meet Your Delegate #14 - Chris Blec](https://forum.makerdao.com/t/meet-your-delegate-14-chris-blec/15585)
- [Missed Proposal Post-Mortem](https://forum.makerdao.com/t/missed-proposal-post-mortem/15644)
- [[Jun8 '22] Post-Mortem for IRV poll issues](https://forum.makerdao.com/t/jun8-22-post-mortem-for-irv-poll-issues/15671)
- [Quarterly Strategy Review - Q1 2022 - (Public Call on Tuesday, 6/7/22, 3:00PM UTC)](https://forum.makerdao.com/t/quarterly-strategy-review-q1-2022-public-call-on-tuesday-6-7-22-3-00pm-utc/15563)

- [_**Discussions:**_](https://youtu.be/ZMuA4wxjeec?t=688)
- [Embedding legal analysis on new governance proposals](https://forum.makerdao.com/t/embedding-legal-analysis-on-new-governance-proposals/15581)
- [[Discussion] Is GFX's Interest Protocol a Direct Challenge to Maker?](https://forum.makerdao.com/t/discussion-is-gfxs-interest-protocol-a-direct-challenge-to-maker/15577)
- [Towards web3-native intelligence: tools for protocol comprehension and stewardship](https://forum.makerdao.com/t/towards-web3-native-intelligence-tools-for-protocol-comprehension-and-stewardship/15642)

- [_**Signal Requests:**_](https://youtu.be/ZMuA4wxjeec?t=811)
- [Deploy a Trial Permissionless Open Market Operation & Resurrect the Burn](https://forum.makerdao.com/t/signal-request-deploy-a-trial-permissionless-open-market-operation-resurrect-the-burn/15381)
- [Incoming Velodrome Airdrop on Optimism - $VELO veNFT](https://forum.makerdao.com/t/poll-incoming-velodrome-airdrop-on-optimism-velo-venft/15371)
- [Update dust limit analysis](https://forum.makerdao.com/t/signal-request-update-dust-limit-analysis/15547)

## Initiatives Update

### Brand Team by Growth Core Unit

#### Mariano

[18:25](https://www.youtube.com/watch?v=ZMuA4wxjeec&t=1105s)


- This is a brief update for the Maker Brand Team, a team incubated inside of Maker Growth. Here is what we have been doing so far.



- These are some of the metrics. Consider that the last tweet of the Foundation times was around August 2021. We started tweeting near February, and you can see the impact.
- We remained silent on Twitter for too long. We lost a lot of the engagement we had in the past, and we have surpassed the number of followers by other accounts.
- Still, we are working hard to provide good content and generate a high engagement rate.
- These metrics are simplistic. We are working on another set of metrics and OKRs for social media, and we will be sharing that with you soon.


- This is how we manage the Twitter account.
- We have a public [Announcements Table](https://makergrowth.notion.site/MakerDAO-Announcement-Table-d0b985e511f34b0392741e4f3d1cd406). We believe that transparency is fundamental for our DAO.
- For each of these announcements, there is Content Creation. If you click on any, you will see them treated as projects.
- We then share that with our PR and Comms agencies and strive to extend the message to other media outlets as we keep improving it before posting it on Twitter.

[22:00](https://youtu.be/ZMuA4wxjeec?t=1320)


- Regarding PR & Opportunities, we did a brand analysis to gauge how are MakerDAO and DAI received in the media.
- We are crafting stories, currently working on one called _DAI, a different Stablecoin._
- We commissioned research and academic articles around MakerDAO to start having different content.
- We provide support in events. We have been doing something neat in Permissionless.
- After the Terra fiasco, we pushed to have Sam there. Since Do-Kwon was not going to attend, we got that slot for free.
- We set up plenty of interviews for Luca Prosperi, Sam, and others.



- With the [Nature Initiative](https://nature.makerdao.com/), Vaults can claim a [POAP](https://poap.xyz/). In doing so, said POAP will plant ten trees.
- Since [launching](https://forum.makerdao.com/t/intangible-asset-agreed-modification-of-management-2022-05-24/15348) the initiative, 36 Vaults opened, and we planted 116 trees.
- We will soon be posting a dashboard showing updates such as how and where the trees were planted or how many km² we reforested with this initiative.
- Special initiatives keep the conversation going on about MakerDAO. This is a neat, inexpensive, and fun thing for the whole scene. Stay tuned for our next big project!


- If Growth's budget is approved with the Brand option, we believe we should do brand research and start implementing the findings on our website.


- We want to develop a visual system for all of these assets to be accordingly represented, have their logo, and standardize how we talk about these things.


<details>
<summary>Video design: Nature Initiative</summary>

</details>

<details>
<summary>Video design: Maker Teleport</summary>

</details>

- These are old explorations, things we play around with the agencies we hire, which have yet to reach their final form.
- Everything needs to be done in the context of branding research, defining a holistic visual concept and message for the protocol.


- After the branding research, we need to work on visibility for our assets.
- If you go to our website right now, you will notice things are not up to date and lack proper guidelines.


- Once our website is updated, we would like to explore what traditional and digital advertising can achieve for us in terms of cost and results and gauge the impact those can have on DAI circulation.


- Those were the updates of the Brand Team. If you have any questions, go ahead.

[29:05](https://youtu.be/ZMuA4wxjeec?t=1745)

- **Payton:** I did see one from David in the chat. He wondered about the Brand Team and how it plays into the broader CU structure.
- **Nadia:** Growth is the Core Unit. Inside Growth, we have two teams: Business Development and Brand.
- We decided to incubate Brand inside Growth to provide a solution for the lack of a branding narrative for our Twitter account.
- The long-term goal is to incubate them as Core Units, but for the time being, we believe it is better to nest these two teams inside Growth.
- **Payton:** Appreciate that, Nadia. It seems like we have a question from Max.
- **Max:** That was a marvelous presentation. You are doing an incredible job! I am excited to see the results of all of your fantastic work. Would it be appropriate to bring up the deal and set of terms worked out between Growth and [Glass Entertainment Group](https://forum.makerdao.com/t/informal-poll-fund-a-professional-media-production-company-as-a-core-unit-that-will-produce-content-for-the-benefit-of-makerdao-e-g-content-marketing-to-grow-dai-supply-and-expand-makerdao-s-fanbase/14641)? Maybe we can let some people know that that might be in the pipeline.
- **Mariano:** Last time I talked with GEG, we were waiting for the contract draft.
- **Max:** Yes. We have been trying to clean it up and make it a good agreement for everybody.
- **Nadia:** We also must remember that our budget proposal is currently up for voting. Depending on what MKR Holders decide, we might not be able to continue with the Brand incubation efforts.
- **Max:** I hope MKR Holders see the value in everything you do and support your budget. Thanks for taking my question.

### Makershire Hathaway

#### Mark

[32:40](https://youtu.be/ZMuA4wxjeec?t=1960)


- Mark here, also known as Aes from Strategic Finance. Since we are close to our voting period next week, I want to do a brief update on the Makershire Hathaway SPF and embrace the opportunity to discuss the proposal in more detail.

<details>
<summary>Disclaimer</summary>

</details>

- This report is for informational purposes only. It does not constitute financial, investment, legal, regulatory, or tax advice.
- I will kick things over to Adrian to walk you through our balance sheet status.


- **Adrian:** We discussed managing Maker's balance sheet more productively on several occasions. Particularly in an environment with rising interest rates.
- In the real world, when interest rates are zero all around, this becomes less urgent, but structurally, it is still necessary.
- The framework shown in this slide is a conceptualization of Maker's business model, which is essential and akin to a bank.
- We tried to divide the assets we are holding into two big blocks: Stablecoin Collateral and Surpulss Buffer. In _Makerspeak_ it is just an accounting difference. Nevertheless, it still represents the equity of the protocol.
- There is a third block we are not showing here: all the collateral locked away on top of the DAI issued. But that is beyond the scope of, probably, Maker altogether, and we decided not to get into that.
- There are several proposals on the forums about managing the stablecoin collateral.
- Since we prepared this slide, [MIP65](https://forum.makerdao.com/t/mip65-monetalis-clydesdale-liquid-bond-strategy-execution/13148) has been approved. We are glad to see that. There is intense work to deliver a return on this and manage the net interest spread between what we earn on our assets and what we due on a liability.
- This presentation will focus on the surplus buffer and the equity side.
- Makershire is willing to, in the first step, provide a proof-of-concept by looking for low-risk strategies that do not compromise the principle invested but aim to generate some amount of conservative return on the equity. It will seek to eventually roll out all of the permission aspects to turn it into a fully permissionless system.

[36:46](https://youtu.be/ZMuA4wxjeec?t=2206)



[41:14](https://youtu.be/ZMuA4wxjeec?t=2474)


- **Jun:** Our focus for the Networks we will be operating on will be primarily on mainnet, L2s, and sidechains already proved safe. Other chains can provide asymmetric returns at times. We will evaluate them per chain, with less significant positions relative to mainnet and L2s.
- Security is an utmost priority for us. We will be only going into protocols considered DeFi blue chips, have transparent teams, a good community reputation, and are fully audited by top auditing firms.
- Thank you all for coming. We would like to open the floor up for questions.
- **Kianga:** There are three topics on which I have some thoughts, but I would like to hear your opinion as a team.
- Regarding the use of these other protocols: what enhanced capability should we have, or do you foresee we would have to engage, participate, or follow along within their DAOs as part of our risk management?
- How would we manage to receive governance tokens as a result of any of these strategies?
- How do you envision meta-governance combining with the overall treasury management approach?

[44:40](https://youtu.be/ZMuA4wxjeec?t=2680)

- **Mark:** In terms of Makershire, any unrelated tokens to the ones approved through this proposal--ETH, MRK, and, primarily, stablecoins--will be sold and reinvested into the strategy.
- Some bridges will provide their native token as well as protocol fees. A few LPs will have boosts for liquidity mining incentives. Those will be sold and compounded to maximize yield.
- Suppose a particular asset that the DAO thinks is worth acquiring and accumulating. In that case, we can have a signal request to evaluate that possibility rather than sell it and reinvest it in the yield strategy.
- Although, from a risk perspective, it is more conservative to sell those tokens and not consider their valuation; therefore, making a bet that said token would appreciate relative to the Dollar.
- Meta-DAOs is something I have spent plenty of time thinking about.
- When we got the ENS airdrop, I initially thought we should dump it because, at the moment, it was spiking, and I did not know anything about the business of ENS or how their tokenomics work. I assumed most MKR Holders were in the same boat.
- If there is a cross-DAO type of entity that manages those sets of relationships able to help us do partnerships and figure out different ways we can collaborate, if it is beneficial for Maker, we should pursue that.
- If a protocol that we own tokens of is helping with, for example, DAI liquidity or if they are willing to integrate Maker Vaults or somehow leverage them through their treasuries, that could be attractive for MKR Holders. Nevertheless, it is a complex and relatively new issue for DAOs as opposed to traditional companies.
- I see MakerMan saying _"invest in LP airdrops"._
- We have thought about putting a proposal into LP ENS: If we are not going to sell it, we might as well earn some yield on it. Despite this, we still have not done the math to gauge how attractive that opportunity is. Although, it is something that we can research.

[47:48](https://youtu.be/ZMuA4wxjeec?t=2868)

- **Payton:** Do ask what happens if there are any losses due to these operations.
- **Mark:** We are exposed to ETH and MKR's price. Even so, we believe historical yields are exceedingly attractive compared to the risk of unfavorable fluctuations. We also get the benefit of providing liquidity for DAI and MKR.
- I will reiterate that the goal is to earn yield and provide liquidity for DAI, especially as we are seeing more traction on L2s.
- If you check L2s at the [bit.com](https://www.bit.com/) website, you will see that more and more ETH and assets are moving to L2s over time.
- If you look at DAI's liquidity and Optimism relative to Arbitrum, you will see we have little usage and liquidity there. One of the things that Makershire aims to do is help bootstrap liquidity in areas where DAI is not present.
- From that perspective, we will trade off yield for liquidity to get DAI bootstrapped in some situations.
- **Payton:** There is some debate around what we should do if we receive or become eligible for airdrops.
- **Mark:** MakerMan's idea of LPing the airdrop, as long as it is with ETH or DAI, could be attractive. Especially with DAI. But it depends on Maker's strategic interest.
- But let's think that selling will remove Maker from future airdrops lists. We should consider making that decision as something that could become of strategic importance for DAI beyond the financial perspective.
- **Payton:** Someone asks if you have considered integrating with [makerburn](https://makerburn.com/#/) or [daistats](https://daistats.com/) so the community can keep track of these assets.
- **Mark:** 100%. We would like to have this on [makerburn](https://makerburn.com/#/). He has been great to work with, helping us with different things. We will build a Dune dashboard to monitor all the positions until that is up and running. You can check on it just like you can our financials and see it in real-time.

[51:28](https://youtu.be/ZMuA4wxjeec?t=3088)

- **Payton:** I see Tim raising his hand. Tim?
- **Tim:** How does the chain of custody look after using the surplus? Other folks emphasized this as well. I guess you could phrase it as checks and balances. For the call, Strategic Finance could set an example for transparency, but if you want to talk about making sure that you will be accountable, that would be helpful.
- **Mark:** The first step will be modeling and assessing the various position options we have. We started building a framework we hope to share with the community. Some people might have seen a draft release that leaked ahead of time in the Strat-Fin Discord.
- After we build the allocation for the initial deployment, Risk and Lending Oversight will evaluate each position. Everything will kick off once we understand and assess the risk and return.
- The only eligible positions will be those on networks and protocols in which we have extremely high confidence. Blue chips like Uniswap, Curve, Gelato, etcetera.
- The primary checks and balances will be Risk and Lending Oversight. The community can also decide to change the allocation if there is something they consider too risky.
- In terms of deploying the positions, there is the 5-of-7 multi-sig using [MIP47](https://forum.makerdao.com/t/mip47-makerdao-multisignature-wallet-management/6338).

[53:39](https://youtu.be/ZMuA4wxjeec?t=3219)

- **Payton:** Another question in the chat was about the potential time risk for locking and unlocking on L2s and having the funds unavailable for a frozen period if anything were to happen and we needed those funds.
- **Mark:** Maker Teleport will soon be deploying. There are several bridges that we could move across to return funds from L2 as well.
- Generally, these will be long-term, passive positions that will require little active management. It could be months, even a year, that we could LP into a USDC/DAI LP and hold it for the entire iteration of the SPF.
- In the long run, we see many traditional financial instruments moved on-chain. We see DeFi growing tremendously over the next 5+ years. Ergo, we can leverage some of these innovations that automate these positions.
- I can see a future where we have a master treasury framework that allocates the surplus buffer into predetermined percentages based on several factors driven by risk and our asset-liability management, such as the lending book portfolio.
- Then, processes can be fully automated using DssKiln and these other intelligent contracts.
- Even if we are stepping in early and do not necessarily have the resources to prioritize this level of automation today, I have spoken with our engineers, and we feel this is possible.
- **Payton:** David is _physically_ raising his hand, as I can see on camera. David?
- **David:** Quick question regarding the 10 million Dollar fund to do all of this: how do gas costs eat into the yield? If you have too many strategies and conditions that require you to adjust positions, do you foresee gas as a frequent cost to maintaining this, or is it more passive in practice?
- **Mark:** It is passive in practice. Since we will be holding positions longer-term--especially in crypto terms--and not looking to rebalance, the gas cost will be insignificant, even more on L2s.
- If you think about the Uniswap V3 positions, particularly in these volatile pairs, we will be setting conservative ranges to avoid that.
- At the same time, we need to fully understand the yield and the permanent loss trade-off that comes with setting those positions.
- There are several models that you can use to quantify that. Even so, crypto markets can be unpredictable. I would not have thought that ETH would be where it is today, a couple of months from the merge.

[57:47](https://youtu.be/ZMuA4wxjeec?t=3467)

- **Payton:** I am thinking of a similar question as we asked the Brand Team: how does this play into the CU structure? Will this be entirely overseen by Strategic Finance?
- **Mark:** It will be a partnership between Strategic Finance, Risk, and Lending Oversight. Nevertheless, we want to source community input on the LPs.
- If an attractive opportunity comes up and someone mentions it--MakerMan, for example, who has plenty of experience with LPs and has thought deeply about protocol on liquidity--and the community shows interest, we will hear them. We are looking for this to be a community-owned type of project. That being said, we will be strongly biased towards safer positions.
- **Payton:** In the short-term, does that mean an increase in full-time hires for any of these groups, or will it be managed under existing...?
- **Mark:** No increase. Just management of the existing team.
- **Payton:** This seems to generate a lively chat, some of it related to the topic and some of it, perhaps, branching into other areas. It might be a good time to cue it off for a more open discussion.
- **Mark:** To close out: if anyone has further questions, feel free to message us publicly in our Discord channel and make it official or, otherwise, send us a DM. We will happily talk through these questions. Thanks.

## Discussion

### Open Mic

#### David

[1:00:20](https://youtu.be/ZMuA4wxjeec?t=3620)


- We set up this Open Mic because we realized that having a dedicated topic every week can get exhausting and feel forced, especially if the theme is unclear. There is no well-structured conversation around it.
- Today, we are giving the community a break, even though we spent plenty of time talking through the initiative updates--which I loved--.
- Today's Open Mic is loosely centered around initiatives at Maker. Period.
- If you are curious about any specific initiative, you can ask. If the lead is here, they will gladly give you a brief update.
- If you have burning questions about specific initiatives, now is the time to discuss them.
- **Payton:** The chat keeps bringing up different LPs and DAI liquidity. I do not know if we would like to explore those topics, but if you have a question, comment, or update, you would like to give…
- **David:** I am interested in hearing an update about the [self-insurance fund](https://forum.makerdao.com/t/self-insurance-fund/10563) proposed a while ago by layerzero. Layer, are you willing to give a quick update on how that has been going?

[1:02:15](https://youtu.be/ZMuA4wxjeec?t=3735)

- **layerzero:** Sure. As you probably recall, one of the flagship projects for SES is setting up a self-insurance fund. We want to achieve something similar to D&O insurance in the traditional corporate world.
- D&O is for top-level managers, legal counsels, etcetera.
- This insurance reimburses managers or employees subject to a personal lawsuit.
- At DAOs, we are much more exposed. We lack a legal entity. The biggest threat for us as an organization is to be considered a general partnership, which implies unlimited liability.
- Simply put: anybody can get sued. Not only because of one's actions but because of the actions of others as well.
- Since I see this as the highest legal risk for us as a DAO, I have decided to make this project my top priority. It is inadmissible for us, people who are spending our energy and time and pouring heart and soul into the organization, to bear such a risk while working on this project.
- We hired an insurance broker and a risk management company out of our grant budget. They are elaborating on a feasibility study for us.
- The first phase is crucial. We are assessing the overall legal risk exposure for MakerDAO.
- We are going to conduct interviews with CU Facilitators and Delegates.
- In this phase, we will cover the legal cost of defense for around 130 permanent contributors we have in our workforce and the Recognized Delegates.
- These are the first steps of a long-term risk management strategy for MakerDAO. Later on, once we have the fund set up in place, we can extend it. We can go to the insurance market and place some risks there.
- In later stages, we can consider developing this fund to cover other areas such as, for example, claims from third parties. Traditional companies have captive insurance, which works as an insurance company owned by the organization. We could develop that as well.
- The idea is to provide a comprehensive risk transfer strategy for MakerDAO, and the self-insurance fund is the first phase.
- We are currently preparing a survey which we will start conducting by the second half of next week.
- We have prepared a questionnaire to understand which are perceived risks, as well as real risks for contributors and Recognized Delegates.
- Probably, some of these contributors and delegates already have liability insurance, protection, or even D&O. That is why we want to assess the overall risk exposure.
- The next milestone would be to determine the legal vehicle or structure.
- It could be trusted. Nevertheless, part of the feasibility includes legal analysis to gauge the best course of action to carry this on and determine how large this fund should be.
- Please, stay tuned. I will start contacting you by the second half of next week. I am at your disposal if you have further questions.

[1:08:37](https://youtu.be/ZMuA4wxjeec?t=4117)

- **Payton:** Last week, we talked about the prioritization framework that is now up on the portal. We got feedback from delegates saying it is somewhat confusing or overwhelming. I am curious if anyone has had a chance to look over the descriptions--they are helpful--. Is there any feedback or questions on that initiative?
- **David:** My question about that initiative is what has been the most poignant, negative criticism for it? Now that you had one run of it--even if it was not entirely successful due to technical difficulties--, what is the biggest problem with it?
- **Payton:** The worst issue would be if it did not push us in any further direction. Some of the feedback stated that, perhaps, the options were too specific on direct and technical work.
- In terms of the most poignant criticism, it is just the idea that we are adding more complexity. Another vote is to take place. Another thing for CUs to consider. Does this push us towards our goals, or does it just give us more to talk about rather than do? To me, that is the most poignant criticism. _"The system is not working. Let us add another element to the system and see if that helps"._
- Whether or not we get something worthwhile out of this initiative remains to be seen.
- **David:** Did you receive any positive feedback? Did you see any excitement or people thinking how it might create impact or make a case for that?
- **Payton:** I hear the problem repeatedly in some of our CU coordination calls.
- We are all independent CUs. What do we spend our time working on? How do we do that without becoming a smoky back-room, where a group of stakeholders is making all the decisions? That is the opposite of the core value of the DAO.
- The hope is that having this transparent, free-flowing snapshot of where MKR Holders are sitting will make it easier for us to align resources and to have purpose-driven meetings rather than syncing up over anything that two CUs can have in common.
- With priority input in place, we can determine the most important things to strive for and start working together to achieve them.
- That is the hope and the vision, and it seems like it is much needed. The question is if this is the right tool to help us get there or not.

[1:12:36](https://youtu.be/ZMuA4wxjeec?t=4356)

- **Payton:** Do you feel the same way, David? I do not want to monopolize the talking time.
- **David:** This might be helpful. I prepared these draft slides to spark a conversation if people are willing. They explore different levels you can find at MakerDAO.


- We have 20 different Core Units working on various products and initiatives.


- This is the product level of the DAO. It is incomplete because L2 is much deeper than just L2. There are nuances to all of this.


- I have been struggling to understand the initiative level. People also seem to have different opinions about initiatives and how they group.


- Also incomplete, here are some of our main initiatives. It is something to look up if any questions get inspired.
- Many of us have been exhausted from the number of calls today. It might be worth it to end the call early today and give people back some time and let them enjoy the Thursday.
- **Payton:** Seems reasonable.

## Conclusion

### Payton

[1:15:55](https://youtu.be/ZMuA4wxjeec?t=4555)

- Appreciate the lively discussion around Makershire and the update of the Brand Team. Thank you for joining us live, and if you are watching the recording, excellent job getting to the end!
- There are threads for everything we discussed today in the forums. We are thankful for you taking the time to put your thoughts up somewhere where they will persist rather than being forgotten in just a minute. Please remember to keep the conversation fun.
- We will be here same time, same place, next week. Thank you! See you next Thursday!

[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

- @Sol_Invictus produced this summary.
- Everyone who spoke and presented on the call.​