: Add the Compound V2 DAO Direct Deposit Module
Created: November 7th, 2022
Passed: Yes
70K MKR For
9K MKR Against
What does it do: This poll allows the MakerDAO governance community to signal their support or opposition for adding the Compound V2 D3M to the Maker Protocol with the parameters below:
- Maximum Debt Ceiling (line): 5M DAI to be increased to 160M DAI once the Protocol Engineering Core Unit is satisfied that it is safe.
- Target Available Debt (gap): 5M DAI to be increased to 10M DAI once the Protocol Engineering Core Unit is satisfied that it is safe to increase the Maximum Debt Ceiling.
- Ceiling Increase Cooldown (ttl): 12 hours.
- Target Borrow Rate (bar): 2%.
Why: A compound D3M will allow Maker to inject DAI liquidity into Compound V2, producing yield. As outlined in the voting portal, the mechanics of implementation and outcomes were assessed by the following core units:
- Initial Risk Core Unit
- Maker Open Market Committee (MOMC)
- Protocol Engineering Core Unit
- Collateral Engineering Services Core Unit
Takeaway: Maker and stakeholders continue to encourage the adoption of the Maker protocol through expansion and proven methods.
Poll : Liquidation parameters & Auctions activation
Created: November 14th, 2022
Passed: Yes
76K MKR For
What does it do: As outlined in this poll. Removing bad debt from the MakerDAO books is moving forward. The parameters to execute the liquidations under the following conditions:
- Enable Liquidations.
- Use Linear Decrease for Auction Price Function (calc).
- Set Liquidation Penalty (chop) to 0.
- Set Proportional Kick Incentive (chip) to 0.
- Set Flat Kick Incentive (tip) to 0.
- Set Auction Price Multiplier (buf) to 1.
- Set tau to 4,320,000 seconds (72,000 minutes, or 1,200 hours). This results in an estimated 10bps drop in price every 72 minutes, or 50 days until the price reaches 0.
- Set Max Auction Duration (tail) to 43,200 seconds (720 minutes, or 12 hours). This implies a minimum price of 0.99.
- Set Max Auction Drawdown (cusp) to 0.99.
- Individually set the Local Liquidation Limit (ilk.hole) for the vault types as follows:
- USDC-A – 20M DAI
- USDP-A – 3M DAI
- GUSD-A – 300,000 DAI
Why: The Vaults holding unbacked DAI originate from liquidation functions being disabled. Although the bad debt is no longer accruing because the stability fee was set to 0, the vaults still sit idle.
To clear the bad debt and balance the vaults, the adjustment of unbacked DAI in the amount of ~1.3M would come from the DAOs surplus buffer. The surplus buffer is the amount of DAI that accrues to the protocol from stability fee revenue before auctions are triggered. The proposal noted that the surplus buffer amounts to ~ 77.4M DAI and burning the unbacked DAO (balancing the amounts) Delta is 1.68% of the total.
Takeaway: Although this bad debt is not a priority to clear, it should be noted that sound accounting and risk management practices take precedence within the protocol.
Executive Vote : Parameter Changes for RWA-007-A (Monetalis Clydesdale), Enable rETH-A DC-IAM, Housekeeping Changes
Created: November 15th, 2022
Passed: Not yet but looking likely
75K MKR For
What does it do: The aggregated vote will execute the following:
- Update parameters for RWA-007-A (Monetalis Clydesdale)
- The Maximum Debt Ceiling (line) will be increased by 250M DAI from 250M DAI to 500M DAI.
- The Target Available Debt (gap) will be increased by 50M DAI from 50M DAI to 100M DAI.
- RETH-A Parameter Changes
- The Maximum Debt Ceiling (line) will be set to 5M DAI.
- The Target Available Debt (gap) will be set to 3M DAI.
- The Ceiling Increase Cooldown (ttl) will be set to 8 hours.
- Variable Housekeeping Updates for RWA Vaults and Chainlog Housekeeping Changes
- Update the RWA-008-A doc fromQmdfzY6p5EpkYMN8wcomF2a1GsJbhkPiRQVRYSPfS4NZtB to QmZ4heYjptvj3ovafADJpXYMFXMyY3yQjkTXpvjFPnAKcy – IPFS Link.
- Update the RWA-009-A doc from QmQx3bMtjncka2jUsGwKu7ButuPJFn9yDEEvpg9xZ71ECh to QmeRrbDF8MVPQfNe83gWf2qV48jApVigm1WyjEtDXCZ5rT – IPFS Link.
- Change RWA007_A_INPUT_CONDUIT_URN to RWA007_A_INPUT_CONDUIT.
- Change RWAXXX_A_INPUT_CONDUIT_JAR to RWAXXX_A_JAR_INPUT_CONDUIT.
Why:
- Update parameters for RWA-007-A (Monetalis Clydesdale)
- Because of market conditions, Monetalis Clydesdale is reallocating assets towards 0-1y US Treasury ishares/Blackrock ETF product
- This allocation update includes increasing the debt ceiling and pausing the previously agreed partnership to work with Bauillie Gifford.
- rETH-A Parameter Changes
- rETH was previously onboarded through governance with a debt ceiling of 0. Now that the engineering core unit has set up oracle feeds, the protocol can begin to leverage the vault.
- Variable Housekeeping Updates for RWA Vaults and Chainlog Housekeeping Changes
- Standard operating maintenance.
Takeaway: Maker is executing and updating governance actions that were previously approved. This is standard DAO operating procedure.
Created: November 7th, 2022
Passed: Yes
461K AAVE For,
What does it do: This proposal details a 12-month engagement for Chaos Labs to construct and employ risk and simulation infrastructure to assist optimizations and protect Aave v3 markets. Payment streams will begin six months following AIP approval, with two incentive-based payments after delivery. The DAO may end our contract six months before this stream’s launch.
Services rendered under this proposal include:
- Borrow & lending caps recommendations
- Collateral factors recommendations
- Interest rates recommendations
- Asset listing risk analytics & tooling
- Open-sourced agent access
- Extending the AAVE v3 Risk Analytics App
- Community Risk Calls
Why: Chaos labs is an up and coming risk monitoring firm with a track record of deep analytics and subject matter expertise. Aave’s platform deals with billions of dollars in volume and requires active risk management for parameter changes and general risk mitigation.
Takeaway: The community agrees with an on-chain vote that having dual risk monitoring firms (Gauntlet and Choas labs) is beneficial for the protocol. The final decision for moving forward with Chaos Labs was decided on-chain.
On-chain Vote: Strategic Partnership with Balancer DAO Part 2 – 100k BAL Acquisition
Created: November 13th, 2022
Passed: Yes
403K AAVE For
What does it do: Allows the acquisition of 100,000 BAL tokens on-market by deploying a Bonding Curve contract. The Bonding Curve will have a 100,000 BAL acquisition target, and be mutually beneficial for both Aave and Balancer.
Why: The Bonding Curve will allow traders to receive a small 50bps premium over the Bal.USD price when purchasing USDC/aUSDC and depositing BAL. Allowing for a capital-efficient acquisition method while boosting the use of the USD/aUSD pool on balancer. The DAO’s 100,000 BAL purchase will help the Aave ecosystem’s development. veBAL has several uses in Aave’s ecosystem. BAL emissions are expected to raise TVL and bring more users to Aave.
Takeaway: Aave is working to strengthen its relationship and connectivity with balancer. This aligns with the protocol’s strategy of leveraging boosted pools to bootstrap GHO liquidity.
On-chain Vote: Add OP to Aave V3 on Optimism
Created: November 13th, 2022
Passed: No
81K AAVE For
232K AAVE Against
What does it do: The goal of the proposal is to add the OP token to Aave V3 on Optimism as a collateral asset. The Optimism Foundation would also start the conversation around incentivizing while the initial liquidity of the pool is bootstrapped.
Why: Optimism is a dominant EMV equivalent L2 scaling solution. There is currently over 900M TVL and the platform has saved over 1B in gas fees for users. OP, the native token for the L2, is looking for more utility in the bear market.
Takeaway: The community and delegates voted no under the argument that Gauntlet had not completed a full risk analysis on the collateral token. Under current market conditions, the Aave community welcomes the proposal after completing the necessary risk analysis.
Temperature Check: Deploy Uniswap V3 to Boba Network
Created: November 14th, 2022
Passed: Yes
15M UNI For
What does it do: Temperature check to deploy Uniswap V3 on the Boba Network.
Why: Boba Network is a Layer 2 (L2) scaling solution with unique features like the Hybrid Compute platform. The network offers 40–100 times lower costs to transact and the Hybrid Compute Platform allows developers and creators to use off-chain data to finalize computations. Boba Network will also incentive the usage of the platform with 1M $BOBA tokens.
Takeaway: Uniswap continues to work towards a multi-chain future, allowing the community to vet deployments with the top L2 scaling solutions.
Proposal: SIP-286: Reduction in the Length of Council Election Periods
Created: November 3rd, 2022
Passed: Not yet but looking likely
2 SNX-SC For
0 Against
What does it do: Reduces the overall time period required for a council election by reducing the nomination and voting time periods.
Why: Currently, the election process takes over three weeks if you include preparatory work. Given that this is around a quarter of an epoch length, it is a distraction and time drain for main incumbent councillors, Core Contributors and the Synthetix community. This proposal will look to reduce it to less than two weeks.
Takeaway: A more efficient process for council elections allows for users to either concentrate their time for campaigning or to develop the protocol.
Proposal: SIP-288: 1inch Direct Integration
Created: November 3rd, 2022
Passed: Not yet but looking likely
1 SNX-SC For
0 Against
What does it do: Integrates 1inch exchange contracts to the Direct Integration Manager.
Why: The proposal looks to allow 1inch contracts to trade at these overridden parameters. The CRX <> SNX Atomics <> CRV path is guaranteed using 1inch’s path finding algorithms (an API with a discovery and routing algorithm that helps users get the best rates on swaps).
Takeaway: This proposal is pretty run of the mill and is required as per SIP-267, which state that new Direct Integrations need to be specified, including proposed integration parameters, before being approved.
Proposal: Extend Governance Epoch Duration from Three to Four Months
Created: November 3rd, 2022
Passed: Not yet and could go either way
1 SNX-SC For
1 Against
What does it do: Extends the length of the governance epoch from three to four months, thus reducing council elections to three times a year instead of four.
Why: After analysing previous results there have been concerns raised the three month epochs are too short and lead to disruption of protocol initiatives. Additionally, it aims to address vote fatigue during market downturns, which impacts participation in council elections.
Takeaway: The change looks to provide greater stability to Synthetix and its council members, allowing them to have more of an impact and for elections to be less burdensome on the community.
- Sushiswap
- Compound
- LIDO
Cryptofunds, market makers, and trading desks can interact with these DeFi protocols with MetaMask Institutional
MetaMask Institutional offers unrivaled access to the DeFi ecosystem without compromising on institution-required security, operational efficiency, or compliance requirements. We enable funds to trade, stake, borrow, lend, invest, and interact with over 17,000 DeFi protocols and applications.
Found this research useful? Connect with the ConsenSys Cryptoeconomic Research team at [email protected]
Disclaimer: ConsenSys Software Inc. is not a registered or licensed advisor or broker. This report is for general informational purposes only. It does not constitute or contain any individual investment advice and is made without any regard to the recipient’s objectives, financial situation, or means. It is not an offer to buy or sell, or a solicitation of any offer to buy, any token or other investment, nor is it intended to be used for marketing purposes to anyone in any jurisdiction. ConsenSys does not intend for any person or entity to rely on any facts, opinions, or ideas, and any financial or economic commentary expressed in this report may not be relied upon. ConsenSys makes no representations as to the accuracy, completeness, or timeliness of the information or opinions in this report and, along with its employees, does not assume any responsibility for any loss to any person or entity that may result from any act or omission based upon this report. This report is subject to correction, completion, and amendment without notice; however, ConsenSys has no obligation to do so.
