# Real-World Asset Collateral Scope

### Warning: This is a formatting draft with placeholder content aimed to provide a scaffolding that can be used by the community to collaborate on the language that will aim to be ready for an MKR vote at the end of Q1 2023

### The formatting draft does not represent the final result or the terms or parameters that will be relevant for counterparties of Maker Core such as MetaDAOs or Ecosystem Actors

### All community members, but in particular those with relevant specialized skills, are invited to provide feedback, clarifications, simplifications and useful changes to the language, structure or formatting of this document

1) The RWA Collateral Scope Framework covers processes and parameters for making proposals managing native PSMs and Protector Lines of Credit Types

1) The RWA Council proposes updates to the Scope Framework

2) The RWA Council initiates proposals based on elements in the Scope Framework

3) The RWA Council is responsible for searching for suitable candidates for RWA Core Units, and when a RWA Core Unit is in the place it will take over the responsibilities described in article 2

4) The RWA Council must report all of their work on the forum, and later transition to using a unified coordination toolkit

5) MetaDAO (Protector) Line of Credit type A
* a) Allocation: USD Government Bond financial products with liquidity profile of (min 50% 3 month, 25% 1 year etc), with a maximum of 30% allocated into mortgage backed ABS produts with credit enhancement of at least 15%, max variation etc. If a Protector is in breach of these requirements for more than a week, then the RWA Council must propose a penalty of 200,000 Dai taken directly from their surplus buffer

* b) Maker Core loss to market value at liquidation: up to 50% can be withdrawn at a slippage of maximum 3%, up to 100% can be withdrawn with a slippage of up to 10%. The Protector guarantees any slippage losses beyond the maximum amounts with their collateral.
* Jurisdiction requirements: US, Canada, EU, UK, AUS, NZ, Japan
* Legal structure requirements: Bankruptcy remote, protected by a regulated trustee or similar structure that can trigger liquidation based on MakerDAO or MetaDAO Governance vote

* Cost of Capital: carry with benchmark based on nominal yields. 10% carry below the benchmark, 30% carry above the benchmark. Benchmark is (US Treasury 3 month bonds - 0.3%).

* The starting split between the Line Of Credit type A of each ProtectorDAO is 50/50
* The RWA Council must propose a new split between the Lines Of Credit of each ProtectorDAO every quarter, based on realized returns. The proposal must be justified by a calculation of realized returns, and an independent attestation of compliance with the terms of the Line Of Credit type A

7) Maker Core Native PSMs
* USDC, GUSD and USDP are considered native PSMs
* USDC is a base PSM
* GUSD and USDP are income PSMs
* If more than 35% of total Dai supply is in the PSMs, the RWA Council must propose that the Lines of Credit Type A is increased by an amount of Dai equivalent to the excess of stablecoins above 30% of total Dai Supply
* If less than 25% of total Dai Supply is in stablecoins
* All PSMs can grow to infinitely high debt ceiling with an IAM of parameters: xyz
* Base Psms must contain at least 5%
* The split between GUSD and USDP is 50/50
* If an Income PSM exceeds its split and implied base PSM split, for more than 1 week, the RWA Collateral council must propose a winddown of the PSM

# Budget

* 400k DAI and 200 MKR paid to 2 full time council members at address x and y
* xyz

### For future implementation / target Q2

10) Line of Credit Type B
* Allocation: Centralized stablecoins, USD Government Bond financial products with liquidity profile of xyz, with a maximum of 10% allocated into mortgage backed ABS produts with credit enhancement of at least 15%
* Maker Core liquidity terms: up to 50% can be withdrawn at no slippage, up to 100% can be withdrawn with a slippage of up to 3%. The Protector guarantees any slippage losses beyond the maximum amounts with their collateral.
* Jurisdiction requirements: US, Canada, EU, UK, AUS, NZ, Japan
* Cost of Capital: Rev share with benchmark. 10% rev share below the benchmark, 30% rev share above the benchmark. Benchmark is (SOFR - 0.15%).