---
# System prepended metadata

title: 'Episode 154: August 12, 2021'
tags: [G&R]

---

---
tags: G&R
---

# Episode 154: August 12, 2021

## Agenda

- [00:05](https://youtu.be/QK4hjBi1_CI?t=5): Introduction
- [03:40](https://youtu.be/QK4hjBi1_CI?t=220): Governance and GovAlpha Update
- [07:05](https://youtu.be/QK4hjBi1_CI?t=425): Forum at a Glance
- [14:15](https://youtu.be/QK4hjBi1_CI?t=855): Protocol Engineering Team Update
- [24:32](https://youtu.be/QK4hjBi1_CI?t=1472): Risk Team Update
- [30:35](https://youtu.be/QK4hjBi1_CI?t=1835): Oracles Team Update
- [33:47](https://youtu.be/QK4hjBi1_CI?t=2027): Real World Finance Update
- [41:36](https://youtu.be/QK4hjBi1_CI?t=2496): Growth Core Unit Update
- [47:24](https://youtu.be/QK4hjBi1_CI?t=2844): Sustainable Ecosystem Scaling Update
- [56:00](https://youtu.be/QK4hjBi1_CI?t=3368): MIPs Update
- [1:03:35](https://youtu.be/QK4hjBi1_CI?t=3815): Open Discussion

## Video

<https://youtu.be/QK4hjBi1_CI>

## Introduction

### Agenda and Preamble

#### LongForWisdom

[00:05](https://youtu.be/QK4hjBi1_CI?t=5)

- Hello everyone, and welcome to the MakerDAO Scientific Governance and Risk meeting number 154, taking place on Thursday, August 12th at 17:00 UTC. My name is Payton Rose. 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
 
[01:53](https://youtu.be/QK4hjBi1_CI?t=113)
 
[Weekly Executive Vote](https://vote.makerdao.com/executive/template-executive-vote-momc-proposal-august-core-unit-budgets-housekeeping-august-6-2021?network=mainnet#proposal-detail)
- [Current executive](https://vote.makerdao.com/executive/template-executive-vote-momc-proposal-august-core-unit-budgets-housekeeping-august-6-2021?network=mainnet#proposal-detail)
- We have one executive ongoing involving three things; a rate change distribution of our August core unit budgets, housekeeping matters, and parameter changes. Take a look at that and consider voting. 
- Three ratification polls are currently live:
    - [Declaration of Intent - Onboarding a new collateral type backed by B.Protocol v2](https://vote.makerdao.com/polling/QmYzt3ub?network=mainnet#poll-detail)
    - [DAI Foundation Core Unit](https://vote.makerdao.com/polling/QmVZ2rcG?network=mainnet)
    - [Growth Core Unit MKR Budget](https://vote.makerdao.com/polling/QmSAsT8S?network=mainnet)
- One community greenlight poll is live: [https://vote.makerdao.com/polling/Qmch87Tw?network=mainnet#poll-detail](https://vote.makerdao.com/polling/Qmch87Tw?network=mainnet#poll-detail) ends on August 16th.
- Real-world assets type facility, you got three more days to signal the community if we should be putting in our time to onboard that as collateral. 
- We will be [skipping the executive vote](https://forum.makerdao.com/t/no-new-executive-proposal-2021-08-13/9841) this Friday and will batch it with next week's executive.

### GovAlpha Core Unit update

#### Payton Rose

[03:40](https://youtu.be/QK4hjBi1_CI?t=220)

[GovAlpha Weekly Update](https://forum.makerdao.com/t/govalpha-weekly-update-2021-08-12/9825)

- The [3rd Meet Your Delegate Call](https://www.youtube.com/watch?v=PbdUe4diPjg) recording is now up on YouTube.
- Currently have six public delegates.
- Goals: map out the participation and communication tracking of metric tracking for participating recognized delegates. Following Monday, we will do the first round and make sure everything works. We are going to continue to push for integrations of the delegate contracts with custody providers. Our larger holders can vote and delegate securely.
- Next [budget proposal](https://forum.makerdao.com/t/mip40c3-sp29-govalpha-core-unit-budget-q4-2021-to-q1-2022-gov-001/9799) is now up on the forum, covering six months from Q4 2021 and Q1 2022. We will try and move towards longer budgets to get a better idea of how much the CU costs to run and figure out our goals. We are hoping for the next one to be 12 months; this one is for 6 months.
- Working on launching documentation for Governance to launch through the Maker Operational Manual via Gitbook. Gala is helping us, organizing and managing that project; looking forward to getting it launched and removing critical information. 
- Pablo is now a full MIP editor!

### Forum at a Glance

#### Artem Gordon

[07:05](https://youtu.be/QK4hjBi1_CI?t=425)

[Forum at a Glance for August 6th - 12th](https://forum.makerdao.com/t/forum-at-a-glance-august-6th-12th/9823)

### Protocol Engineering Team Update

#### Christopher Mooney

[14:20](https://youtu.be/QK4hjBi1_CI?t=860)

*Available for next week's spell:*
- The MATIC OSM and Medianizer are now ready. MATIC is ready for onboarding. 
- DssVest has Completed FV specs. It is a v1, which helps to pay teams. We hope to get that out before we have to do the next round of Core Unit payments to establish the vesting next time around. That is only for payments to teams, not MKR investing.
- We are looking at creating a PSM for PAX. 
- For the 6S RWA, there is a broker-dealer address. The output conduit will end up sending DAI funds to that address with Gemini. I have validated that address is a Gemini-controlled address. that change will also go in there now that there is no increase in the debt ceiling. We had one of our deployer addresses test that facility, and we will yank our deployer address from there.

*Other Priorities:*
- GUNI has ongoing team reviews and audits. We recently found something in the Oracle for that; We are still iterating on that.
- D3M is getting a review from the AAVE Team. There are ongoing discussions to determine debt ceilings and whatnot with stETH. We will also try and put together a list of milestones that we want to hit, maybe just Maker milestones between Risk and PE, to set hard limits on where we think the debt ceiling should be and add pressure for them to move their roadmap to a more decentralized and safe place. 
- StETH has ongoing discussions to determine debt ceilings.

*Maintenance work:*
- Changelog updates since previous RWA spells have passed.
- Adding a CalcFactory to improve collateral onboarding.
- Formal Verification proofs/rules for CropJoin.
- Enhancing RWA DC tests in our spells, something that came out of a postmortem we had. 
- The flip to EIP 1559 has messed up the tooling space a little bit; a lot of us spun our wheels on tooling over the last week or so. It looks like DAPtools is up to date, which is one of our big pieces of tooling.

*L2 updates:*
- Kris is doing e2e tests for Arbitrum.
    - Kris: Refactor all typescript helpers and reuse them between Arbitrum and Optimism bridges (in progress).

#### Questions

- ElProgreso: Regarding the Starknet engineering CU, I wondered if PE has been thinking about how to incentivize folks to go over once it's up and running right. If you look at dYdX, they have done it brilliantly. They released it via StarkEx regarding the scalability, the engine, and there are incentives. Has your team had the chance to skill mill with Starkware regarding incentivizing folks to go over once it is up and running, six months from now or a year?
	- Derek: We have not spoken about how folks would move over from our team to the Starknet team after it gets up and running. Their proposal is to initially focus on an initial six-month road map. Have some key deliverables that get their solution to deliver. Then, explore how it impacts liquidation or how other modules can move over into the ZK roll-up space. We have not focused on that or discussed it much, just trying to see how this space will evolve. One of the comments I had with Planet_X earlier this week is that we are not picking a winner; we do not know where the liquidity will go for DAI, whether it is Optimism uptrend or ZK or Staknet etc. We're making sure we have our bases covered, and we have these opportunities here, how that will evolve over time. We will discuss it as their solutions become more solidified regarding the opportunity they present to the existing protocol and where we see liquidity and DAI moving in these spaces. 
- ElProgreso: Is there a metric that we are keeping as far as if Optimism has been having success? I have heard rumors that they are having a hard time getting some TVL, right. I wonder if you have ideas. How do you keep up with how much money is moving over there to these L2s?
    - Derek: I do not have a specific metric yet. We reference one Kris has built a way to view where we are seeing the total value of assets locked. I think it is just something we need to keep an open mind to see where liquidity is flowing. We should start to incorporate in our risk framework because it is not just about risk but also about the reward and revenue that these different opportunities present, and at some point, we will have an evolution where we need to consider off-boarding certain protocols if they are not performing or are not delivering value. We are not there yet in due course, but it will be considered just like we have done with other collateral types.

### Risk Team Update

#### Primoz Kordez

[24:32](https://youtu.be/QK4hjBi1_CI?t=1472)

- Today, we published [proposed liquidation ratio changes](https://forum.makerdao.com/t/agenda-discussion-scientific-governance-and-risk-154-thursday-august-12-17-00-utc/9793/3) that are in line with risk evaluation from last week; please have a look at proposed changes; we plan to include them in an on-chain poll next week. We decided this after we did not see any objections to our proposal.
- Mark posted [analysis](https://forum.makerdao.com/t/maker-vault-activity-metrics/9568) that shows how Makerbots are making vault users use their DAI. We identified about 30% of Italian words with various farming activities. I suggest you read this post.
- The recalculated net yield from paying stability field Maker and opportunity costs on its deposits, so the calculated yield is around 9%.
- The plan is to connect Maker vaults with other farming activities and track this in real-time. This helps us because we can identify whether these users are net long or short DAI. 
- This gives us a better picture of how they can react when it comes to liquidations. The other analysis that is currently in progress is to identify how these users are protecting their worlds if they use automated strategies and to keep it short. The end goal of what we are currently doing is to know what user behavior practices but also track their own chain balances; this gives us a complete understanding of how risky every exposure is at Maker; by knowing this, we can offer better conditions through lower liquidation ratios, higher depth ceiling, slow rates and so on.
- Monet-supply made two posts this week, one regarding [`dust` levels](https://forum.makerdao.com/t/gas-and-vault-cost-from-a-user-perspective/9772/2). `Dust` levels are quite high at Maker. Usually, the evaluated appropriate `dust` levels were in liquidations; basically, look at the minimum depth amount or depth size where liquidation is still profitable and does not lead to losses.
- This time, monet-supply choose a different approach; he compared gas costs of managing a vault for different depth sizes, estimating gas costs from a user perspective. The result was that 5,000 to 10,000 is actually a pretty reasonable `dust` level because if you use certain stressed scenarios, gas costs can already be attributed to more than 5% on yearly cost levels, which is two times as much as the ETA rate currently. 
- The other post was regarding [collateral off-boarding framework](https://forum.makerdao.com/t/offboarding-unprofitable-collaterals/9785); this planner framework is still in discussion. The steps of parameter changes that need to be applied to abort these collaterals align with what we discussed with other facilitators. The only potential unknown criteria are the time frame, so whether we should be more aggressive with some collaterals such as, for instance, KNC, where there is no real economic benefit of having this collateral enabled. We need to determine how aggressive we want to be with these parameter changes that follow. 
- There is ongoing work on Institutional Vaults. We are proceeding with evaluating Nexo's current exposure and their historical track record, protecting their world with the PE team, and still discussing appropriate dev conspires.
- We are evaluating B.Protocol proposer for onboarding new collateral type, fixed-rate vaults proposal by the Deco protocol, we submitted a proposal for the Maker compensation for the team.

### Oracles Team Update

#### Marco-Andre

[30:35](https://youtu.be/QK4hjBi1_CI?t=1835)

- The MATIC oracle is now ready to go.
- We are coordinating the PSM and cleaning up some permissions once we confirm that everything is alright.
- Fees and relayers are updated; they are pushing prices. 
- Development side: we began the work for EIP 1559 for relayers, both on the new codebase and on the current Omnia software in production.
- Tools is catching up with London and the EIP 1559, which allows us to do the work on our end. Both are progressing relatively well. 
- We merged some code that will give us additional flexibility on gas price strategies for relayers.
- Regarding EIP 1559, we are assessing a good pricing strategy for transactions. It's unclear if we will develop something that will result in gas savings and safe costs for MakerDAO. We will do some calculations in this regard. 
- Software development team side: we finished the deployment of both major pieces of software in Gopher and Spire, we started doing much-needed refactoring work. The goal is to give additional deployment and configuration options to feeds and relayers.

### Real-World Finance Team Update

#### Sébastien Derivaux

[33:47](https://youtu.be/QK4hjBi1_CI?t=2027)

[Real-World Finance Core Unit Report](https://forum.makerdao.com/t/real-world-finance-core-unit-report-2021-07/9658)
[NewSilver July Update](https://forum.makerdao.com/t/new-silver-july-2021-update/9750)
[RWA July Report](https://forum.makerdao.com/t/real-world-assets-report-2021-07/9783)

- We are setting up, we have memos and articles of association. 
- You can discuss how much control you want to give to authorized signers to some committees, basically how much control you want MakerDAO to keep or give to third parties. 
- We are looking for servicers; two are operators of the Cayman Foundation.
- We are pursuing the SolarX transaction, hopefully in September.
- Discussions with people: our asset is good but small, and it is not moving the needle and not helping with the USDC; we have too much USDC in the PSM. 
- Maybe we can use the Cayman Foundation to invest in safe assets, so we can get at least a bit of yield; I shared this in a [forum poll](https://forum.makerdao.com/t/informal-poll-using-the-cayman-foundation-to-invest-in-financials-assets-at-scale/9790). 
- We decided to pause on data infrastructure regarding RWA. There were some complications. We are focusing on using Dune Analytics for deep analysis to push MakerDAO in front of the default community as a world.
- I hope with this funding, 6 - 8 million that the tool will get better. It is worthy of continuing using it and not invest too much elsewhere.
- Finance front: Aes is working on Institutional World Economic Analysis. He made a [post](https://forum.makerdao.com/t/rwf-financial-planning-analysis-roadmap/9756) asking the community regarding financial reporting.
- Working on a post regarding pushing on-chain securitization to the next step. Will publish it next week.
- New job position on the RWF team: looking for an expert in securitization. 

*6S Progress:*
- Matthew has helped close the first institutional Delaware statutory trust structure with a world-class trial, world-class trustee.
- With a world-class trustee on board, the DAO can bring on a whole suite of new trustees for success and any party that wants to step forward to deploy capital safely and to do so at an ultra-scale.

### Growth Core Unit Update

#### Nadia Alvarez

[41:36](https://youtu.be/QK4hjBi1_CI?t=2496)

[Growth CU Weekly Updates](https://forum.makerdao.com/t/growth-cu-weekly-update-august-6-12/9824)

- Working with various entities to help create a solution for Institutional Vaults. It will be a good solution to generate more DAI supply, but not all companies or entities interested in using the service are Nexo; it is an exception that is willing to use MAkerDAO to create different programs to increase their warning or earners in the Indian market. 
- The Institutional and Long-Term Vault proposal is our first step. We will then look into institutions for Dai loans.
- Hoping to use loans as the middleman between Maker and Institutions. Currently speaking with two potential entities.
- We plan to put up a weekly poll for the Paxos PSM.

*Stars of the week:*
- Bitbns, an Indian exchange, will include the DAI/INR pair and start a series of campaigns to increase Dai awareness in the Indian market.
- Skylo App, a wallet for P2P transactions with DAI from BSC, runs campaigns in Latin America, mainly in Argentina and Venezuela.
- Micah Johnson is an artist that is receiving DAI donations to support two kids.

### Sustainable Ecosystem Scaling Update

#### Juan Guillén

[47:24](https://youtu.be/QK4hjBi1_CI?t=2844)

[SES Public Drive](https://drive.google.com/drive/folders/1rjeOpHmE-kgFvkrliw2DlI810FhxPkp7)

- Created a forecasting template for Dogfooding products available in our public drive.
- Created an MKR Compensation template, which is found in our public drive.
- Looking for talent!
- Nebula presented yesterday for RWA and is up on Youtube.

![](https://i.imgur.com/GORB72M.jpg)

![](https://i.imgur.com/dn4Trk3.jpg)

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

*Upcoming:*
- Tomorrow at 14:30 UTC, Jordan and Lenkla will present their first finding for Project X-Ray.
- RWA: CapitalNow Cannabis
- KYM: RWA Foundations with @SebVentures
- CULPS: Strategic Happiness CU with Andrew Burban
- Will be at EthLisbon.

### MIPs Update

#### Pablo

[56:00](https://youtu.be/QK4hjBi1_CI?t=3368)

[Weekly MIPs Update](https://forum.makerdao.com/t/weekly-mips-update-48/9757)

![](https://i.imgur.com/Z2MF9qv.png)

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

![](https://i.imgur.com/8tQQ7yE.png)

- These proposals are now live, and you can vote on them on the portal; you can see all of them have already reached and surpassed their minimum participation, are looking very good for these proposals.

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

![](https://i.imgur.com/G13Iwz8.png)

![](https://i.imgur.com/N08Aora.png)

![](https://i.imgur.com/d5VxuJA.png)

#### Questions

- David: I have one quick question. So I know that you mentioned now that you don't have anybody helping with the enormous work workload. So my question is, are you looking for help? Are you calling out to the community for some help?
    - I will be looking for help. Once the role Is more defined, we're going to have a call part of the global team, to kind to refine what the media role Is and de want from it; once de have that down, yes, I will probably be looking for help.

## Presentations and Other Discussions

### Open Discussion

#### (Variable rates vault - Flash Loans)

[1:03:35](https://youtu.be/QK4hjBi1_CI?t=3815)

- We open it up to general discussion; earlier in the call, we have a comment from Bourbon about variable rates vault; I know there's some discussion saying that right now would not be technically possible. However, I think that's an interesting discussion to have.
    - Sam was saying it might not be technically that easy to implement right now; I think it could be a good idea down the line, if it's possible to do, one of the reasons we charge more is because these people using it are riskier but if their vaults are sitting at a regular ratio then, why should they be paying the six percent? They'd be paying a lower percentage, I don't know if you've run three different oracle oracles for this be for more, so I this you know if there are three separate oracles for something, maybe this would reduce some kind of overhead, wouldn't it just be like a sliding scale thing I don't think you'd need oracles well, I don't know exactly how it would technically work, but you know it could be easier to maintain one thing for us rather than three different vault types, so I think you guys get the idea I think it's probably not a priority, but maybe other users might see the same necessity for this and perhaps there is a lot of demand for something like this.
- The challenge is really around finding an efficient way to implement it. I mean, the sort of poor man's way to do it is like we have three ETH types already. So you could build some automation. That would move you between the three of them based on where you were keeping your collateralization ratio. The problem is that it's probably not economical from a gas perspective.
    - Yes, If the intensive gas that would come out of the vault.
- Somebody could build like an aggregator kind of thing, top of Maker where if people were all willing to say accept the same amount of exposure, you could have multiple depositors putting into it. Then you could socialize, the gas costs in some way by, you know, having some operator that does the rebalancing between different fee rates Eths and then like some there's some diversion of the profits may, you know, to that operator to compensate them for that. And so that would be like, something would be like a style thing built on top of Maker.
- Is it possible to do it within a vaults Type? But like obviously like a new vault type where it's just mapped like that whole curve is just mapped.
    - Well, They're like efficiency problems. How do you continuously update the stability fee? You probably need some sort of keeper for that. Like you could design a vault-like this, but, basically, you need something constantly poking and, taking into account each price and how much DAI people draw from their vaults. And you also need now like per vault storage because different vaults will also individually have different rates within that doesn't jive well with the way. The contracts are structured and factored in.
    - it interesting problem, but it's the short answer that you can't do it easily.
    - You can implement it but only allow users to use it using something like the Defi saver or Oasis. Yes, it's like liquidation is the risk only allowing for users. That employs a service that protects them from liquidation.
- I have another topic you might want to discuss flash Loans because we deployed the module more than one month ago, and still no one used it. So, I wonder what we missed because I think it's a great opportunity.
    - Yeah, I get the impression people are just not aware that the amount of money is not significant enough to move people. I think we would get more traction if we go to zero percent fee because dYdX is still the first option that people usually go to because it's free. 
- So. I'm here asking, Is there an easy way to compare the gas usage for like our flash loans implementation versus like dYdX has?
    - You can test this need to if you just go check transactions; they usually kind of doing a whole bunch of extra. So it's hard to just look. You probably have to rig up a test yourself.
    - I mean, the cheap way to sort of estimate if you just want to like do it by looking at contracts is just like will get how many operations there are because those tend to dominate gas and then beyond that, look at this loads to the second-biggest contribution that they can give you pretty good rough idea than just based on the gas cost of those off codes. The difference will be, But it's also easy to just write a test for it. Gas measurement is a standard depth thing to do.

[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

- Andrea Suarez produced this summary.
- Alejandro Fernandes produced this summary.
- Artem Gordon produced this summary.
- David Utrobin produced this summary.
- Everyone who spoke and presented on the call, listed in the headers.
