Maker Governance Review: July 2020

6 August 2020

The Maker Governance Review is a monthly recap of all Governance activity, from  Governance blog posts and polling/voting history to Governance Cycle progress. Each review is written by the Maker Improvement Proposals (MIPs) Editor to keep the Maker community informed of Governance developments.

Top Governance News

MANA Approved by Maker Governance as Collateral Type in the Maker Protocol

MKR holders have accepted MANA (Decentraland) as a new collateral asset in the Maker Protocol. Anyone can now connect a wallet to Oasis Borrow to lock the token in a Maker Vault to generate Dai.

July’s Governance Polls and Executive Votes 

Governance Cycle Updates

Key Outcomes of the Third Governance Cycle

The third Governance Cycle, which began July 6 and ended on July 31, included significant milestones for the Maker community and MakerDAO.

Five proposals, each described below, entered the Governance Cycle this month and were ratified on July 28: 

Maker Improvement Proposals (MIPs)

  1. MIP16: The Weekly Governance Cycle
    1. This proposal formalizes a Weekly Governance Cycle for the Maker Governance system. The Weekly Governance Cycle provides a predictable framework for Maker Governance decisions to be made on a weekly basis.
  2. MIP18: Meta-Parameter Adjustments
    1. This proposal outlines and formalizes the concept of Meta-Parameters in the Maker Protocol. In short, Meta-Parameters are parameters that do not correspond directly to parameters within the Maker Protocol’s smart contracts. MIP18 also contains a list of the current Meta-parameters used in Maker Governance. 
  3. MIP19: Liquidations System 1.1 Upgrade
    1. This proposal upgrades the Maker Protocol’s auction contracts to avoid “double liquidity” (the need for extra funds when a bidder modifies a bid as well as to fix the “stuck debt auctions” bug.

Subproposals

  1. MIP18c4-SP1: Subproposal for Modifying Meta-Parameter Adjustments
    1. This proposal removes the Dai Savings Rate (DSR) spread as a Meta-Parameter to reduce the Weekly Governance Cycle’s complexity. In short, the DSR spread is a Governance Meta-Parameter that sets the DSR via the Base Rate.
  2. MIP12c2-SP3: Domain Work Requirements for the Onboarding of MANA
    1. This proposal defines the work requirements for onboarding the MANA collateral type to the Protocol, explicitly highlighting the domain teams’ objectives and work requirements. The ratification of this proposal means that MKR holders accepted MANA (Decentraland) as a new collateral asset in the Maker Protocol. Now anyone can connect a wallet to Oasis Borrow to lock the token in a Maker Vault to generate Dai.

With the passing of these proposals, MakerDAO now officially has a formalized Weekly Governance Cycle, a process for adjusting meta-parameters, an upgraded liquidations system, and MANA available as a collateral type. Additionally, Maker Governance will no longer use the Dai Savings Rate (DSR) spread but instead follow the Base Rate going forward.

The weekly and monthly Governance Cycle processes, at a glance.

MIPs In Progress

Five other proposals, outlined below, are currently in the Request for Comments (RFC) phase. This means it is now time for the Maker community to provide feedback on each or request changes from the Proposal Authors. 

  1. MIP20: Target Price Adjustment Module-(Vox)
    1. This proposal defines a process for adjusting Dai’s target price according to a Governance-defined rate, allowing the institution of “negative effective interest rates,” described therein.
  2. MIP17: Weekly Actual Debt Ceiling and Actual Risk Premium Adjustments
    1. This proposal defines a process and solution for enabling weekly Debt Ceiling and utilization-based Actual Risk Premium adjustments.
    2. This proposal is currently being modified based on community feedback to only propose a solution for Debt Ceiling Adjustments. A summary of the reasoning can be found here.  
  3. MIP15: Dark Spell Mechanism
    1. This proposal suggests a process for applying critical bug fixes to the Maker Protocol.
  4. MIP14: Protocol Dai Transfer
    1. This proposal defines a generic process for transferring Dai from the Maker Protocol to a target ethereum address.
      1. The Author of this proposal is looking for a new author from the community to champion this proposal going forward. 
  5. MIP13c3-SP1: Declaration of Intent (Forward Guidance)
    1. This proposal aims to help Vault users hedge their exposure to the base rate via various derivative contracts.

Collateral Onboarding Community Greenlight Polls 

Community Greenlight Polls are Governance polls that are specific to gauging community sentiment for collateral onboarding. Specifically, Greenlight Polls allow MKR token holders to inform the Domain Teams (Risk, Smart Contracts, and Oracles) of their preferences for collateral types that have been proposed through Collateral Onboarding Applications. These polls run for a period of two weeks starting the third week of the Governance Cycle. 

While Domain Teams are free to choose their own workload, an on-chain Governance poll provides them with key insights into the community’s sentiment for each collateral type proposed. In addition to this, it is important to gather the opinions of MKR token holders before the full domain work takes place, as a matter of efficiency.

July’s Collateral Onboarding Community Polls ended on August 3, with the following results: 

What’s Ahead?

The fourth Governance Cycle began on August 3, signaling the start of the Formal Submission period for new MIPs, Subproposals, and Collateral Applications. The formal submission period ended on August 5. Proposals will be approved or denied by Governance Facilitators on the weekly (Thursday) Governance call. If approved, proposals will enter the Governance Cycle in week two of the August Cycle through Inclusion polls on August 10. 

Be sure to keep an eye out for the Weekly MIPs Update, typically posted in the Maker Forum on Sundays or Mondays. The update summarizes the most recent events in the world of MIPs, the previous week’s activity, what to expect from the current week, and what’s on the agenda for the next week. It also covers updates with respect to Governance polls and votes, collateral onboarding, and rate adjustments.

Resources

To stay current on Governance, risk, and community issues, bookmark the MakerDAO Public Events Calendar. Newcomers to Maker might want to review our series of posts on the MakerDAO Governance Risk Framework.

Also, remember to review the Maker Improvement Proposals category in the Maker Forum and visit the #mips rocket.chat channel to discuss topics related to MIPs, the Self-Sustaining MakerDAO Initiative, and long-run Governance. 

To learn more about the Governance activities that occur during the Monthly Governance Cycle, see MIP3 for a week-by-week breakdown. 

For the most current MIP-related activity, see the official MIPs Github page.

About Maker Improvement Proposals

MIPs support the organic growth that further expands MakerDAO’s self-sustainability by providing the Maker community and all stakeholders with a standard approach to proposing improvements, specifications, and process and state changes to the Maker Protocol and MakerDAO. 

6 August 2020