Show some love to our Medium account Governance Summary Votes and Polls March had less governance activity than usual, partly due to not having an executive vote on March 18. One poll that passed but has not yet been bundled into an executive vote is the Ambassadors Pilot Program governed by Kat, which has the objective of making Spanish translations of all evergreen resources available to the public. Eleven ratification polls took place in March and successfully passed. There were no Community Greenlight polls. Check out Key Outcomes below for additional details on Polls and Votes. Financials and Budgets The month started with Strategic Finance presenting their Quarterly Strategy Review of Q4 2021. Discussion on improving workforce spending vs. protocol revenue continues to gain traction, and community members provide their opinions (1, 2, and 3) on potential concerns and solutions. There was an Issue Discussion Call about the Budget Modification Process to engage public discussion, invite questions, and introduce the MIP40 Reform Proposal. Check out the video and Medium summary for more information. 397,184 Dai was transferred to two Core Units: Collateral Engineering Services and Immunefi Security. In addition, a total of 397,184 Dai was streamed to the Collateral Engineering Services, Immunefi, and Risk Core Units. Additional information on Core Unit budget activity is displayed below in the Key Outcomes section. Delegation and Compensation March includes two new Recognized Delegates. Please welcome Flipside Crypto and Hasu. End of March delegate summary: Tokenomics Discussions and tokenomic challenges within the DeFi space have sparked several proposals for improving MKR tokenomics to increase governance participation, governance security, user incentivization, and the fundamental value of the MKR token. ● monet-supply submits a proposal idea for stkMKR: Maker Staking and Tokenomics Revision. There is also a Focus On call recording with monet-supply available on YouTube. ● Porter_Smith submits a Tokenomics Proposal Overview. Collateral and RWA March saw multiple discussions take place on the forum, as well as public calls concerning strategies, clarifications, and improvements in the onboarding process for new collateral assets and real-world assets (RWAs). ● monkey.irish submitted a post clarifying the collateral onboarding process. ● Frank_Brinkkemper submitted a discussion and informal poll around actions to increase the competitiveness of ETH & stETH collateral. ● Governance and Risk Call | Ep. 181 featured an open discussion around RWA collateral management. ● roollie submits a posted exploring the RWA DeFi ecosystem beyond onboarding collateral. ● The Lending Oversight Core Unit (LOVE) posted their Core Unit overview and incubation update, which includes improved assessment and workflow for collateral applications. ● lyt from the Strategic Finance Core Unit posted a short comparison of stETH lending markets on Maker vs. Aave. Core Unit Activity The month finished with 19 active Core Units. The MakerShop Core Unit has stepped down and is discussing a potential mandate handover to Andrew Burban of the Strategic Happiness Core Unit or another team happy to take over. It has been two months since the complete offboarding of the Content Production Core Unit. GovAlpha submitted a post mortem containing a timeline of activities and recommendations for the entire offboarding process. Governance and Risk Calls Governance and Risk Calls pre-semi-transcription summaries can now be found on the GovComms Medium Channel. ● Governance and Risk | Ep. 183 ● Governance and Risk | Ep. 184 Check out ‘What’s Ahead?’ below for insights on what to expect in April! Key Outcomes All votes mentioned are assumed to have successfully passed unless otherwise noted. Initial Parameters for StarkNet Simple DAI Bridge The community supported implementing a Starknet simple bridge limit of 5 million DAI. The Starknet Engineering Core Unit will proceed with deploying the StarkNet simple bridge once the listed requirements are met. More Information The bridge limit is the maximum amount of Dai that can be in the L1 bridge contract. Hence, it is the maximum amount that users can lose. This will not include the Fast Withdrawals component, which is planned for release later this year and will be put through a separate governance process. The bridge launch will require completing all the mandatory items on the checklist. Users will use the simple bridge at their own risk; this will be mentioned on the bridge’s user interface. Authorizing ESM on DssFlash to Remove Governance Permissions The Emergency Shutdown Module was authorized on the Flash Mint Module. More Information Based on this post from the Protocol Engineering Core Unit, this change was intended to patch a vulnerability discovered in the interaction between the Emergency Shutdown Module and the Flash Mint Module. Specifically, this change prevents a malicious governance action from re-activating the DssFlash module after the FlashKiller contract disables it. Adding Support for New TUSD Implementation Support for the new TUSD implementation address was added. More Information Based on this post from the Protocol Engineering Core Unit, this addition was intended to resume collateral operations for TUSD-A, which were automatically halted after a February 24th change in which the TUSD team pointed to a new implementation address. For additional information, please consider reading this thread on the last time the TUSD contracts were modified. Mitigate Post-Shutdown Flash Loan Vulnerability On March 9th, an executive proposal passed to mitigate the post-shutdown flash loan vulnerability in the Maker Protocol, as described by the Protocol Engineering Core Unit here. More Information Changes include: ● Giving a new module flash-killer authorization over the Flash Mint Module so that anyone can permissionlessly use flash-killer to disable the Flash Mint Module in the event of an Emergency Shutdown. ● The vulnerability is not exploitable until three days (currently) after an Emergency Shutdown is triggered, meaning there is a 3-day window where any user can disable the Flash Mint Module using flash-killer before an exploit can take place. The Protocol Engineering Core Unit considers this a temporary mitigation and recommends that the issue be solved more permanently in the future via the replacement of the Flash Mint Module. The source code for the flash-killer module can be found here. The flash-killer contract address is 0x07a4BaAEFA236A649880009B5a2B862097D9a1cD. Add Rate Limiter to Flap Auctions As per two successful governance polls (1, 2), a new rate limiter was added to the flapper contract. More Information Changes include: ● Modifying the Flapper-Contract by introducing a rate limit so the protocol can control the amount of simultaneously running flap-auctions. This is achieved by limiting the amount of Dai that can be simultaneously auctioned for MKR. ● Adding a parameter, lid , that sets the total amount of DAI allowed to be sent out to surplus (flap) auctions at once. ● Set the lid parameter to 150,000 DAI Please note that this executive proposal does not include a System Surplus Buffer; the Surplus Buffer will remain at the current value of 250 million Dai. Immunefi Bug Bounty Payouts As part of the Immunefi Bug Bounty Program, a total reward amount of 2,750 DAI was transferred. More Information ● 2,500 DAI was transferred to 0x3C32F2ca11D92a7093d1F237161C1fB692F6a8eA. ● 250 DAI was transferred to 0x2BC5fFc5De1a83a9e4cDDfA138bAEd516D70414b. For further details, please see this forum thread. Amend MIP64 to clarify critical web bounty amount (MIP4c3-SP1) This governance poll passed, demonstrating support for amending MIP64 with MIP4c3-SP1 to clarify the critical web bounty amount. More Information The proposal author offered the following motivation for this amendment to MIP64c3: The reward for Critical website and application bug reports was not specified as intended. The reward was specified at 100,000 DAI “if the impact leads to a direct loss in funds or a manipulation of the votes or the voting result, as well as the modification of its display leading to a misrepresentation of the result or vote.” This part is clear. “All other impacts classified as Critical would be rewarded no more than USD 50,000.” The words no more than suggest that inequality is intended. That is, bounty <= $50k instead of bounty = $50k. We omit the words “no more than” to obtain the intended reward mechanics. Vault Management Onboarding CRVV1ETHSTETH-A As per this successful governance poll, the CRVV1ETHSTETH-A vault type was onboarded with the following parameters: Initial Collateral Parameters Parameter Rate Stability Fee 3.5% Liquidation Ratio 155% Maximum Debt Ceiling 3MM DAI Target Available Debt 3MM DAI Ceiling Increase Cooldown 8 Hours Debt Floor 25.000 DAI Liquidation Parameters Parameter Rate Auction Price Function Stairstep Exponential Decrease Price Change Multiplier 0.99 Price Change Interval 90 Seconds Auction Price Multiplier 1.30 Liquidation Penalty 13% Limits Parameter Rate Local Liquidation Limit 3MM DAI Maximum Auction Drawdown 0.4 Maximum Auction Duration 140 Minutes Breaker Price Tolerance 0.5 Incentives Parameter Rate Proportional Kick Incentive 0.1% Flat Kick Incentive 300 DAI Maker Improvement Proposals Eleven ratification polls took place in March, all of which passed: Ratification Polls Ratification Poll Discussio n Declaration of Intent - Invest in Short-Term Bonds (MIP13c3-SP12) Discussio n Facilitators Offboarding (MDS-001) (MIP41c5-SP5) Discussio n GovAlpha Budget 2022-23 (MIP40c3-SP59) Discussio n Modify Core Unit Budget - Real-World Finance (RWF-001) (MIP40c3-SP61) Discussio n Modify GovAlpha Core Unit MKR Budget (MIP40c3-SP60) Discussio n Onboard-Amend Keeper Network - Gelato Network (MIP63c4-SP3) Discussio n Onboard-Amend Keeper Network - Keep3r Network (MIP63c4-SP2) Discussio n Rapid Payment for Small Bug Bounties (MIP64, MIP40c3-SP42 Amendment) (MIP4c2-SP17) Discussio n Recognized Delegate Compensation (MIP61) Discussio n MIP62 Amendments (MIP4c3-SP2) Discussio n ETHAmsterdam Event (MIP55c3-SP3) Discussio n Parameter Management View a detailed breakdown of last month’s parameter changes proposal published by the MOMC. Maximum Debt Ceiling (line) Management Vault Type Parameter Change Previous New WSTETH-A Maximum Debt Ceiling ( line ) +100MM DAI 200M DAI 300MM DAI DIRECT-AAVEV2 -DAI Maximum Debt Ceiling ( line ) +80MM DAI 220MM DAI 300MM DAI Target Available Debt (gap) Management Vault Type Parameter Change Previous New WSTETH-A Target Available Debt ( gap ) +10MM DAI 20MM DAI 20MM DAI DIRECT-AAVEV2- DAI Target Available Debt ( gap ) +15MM DAI 50MM DAI 60MM DAI Target Borrow Rate (bar) Management Vault Type Parameter Change Previous New DIRECT-AAVEV2-DAI Target Borrow Rate ( bar ) -0.65% 3.50% 2.85% Core Unit Budget Management Core Unit Budget Transfers As per multiple successful budget proposals, a total of 397,184 Dai was transferred to multiple Core Units: Core Unit Transfer Amount Proposal Collateral Engineering Services Core Unit 259,184 DAI Proposal Immunefi Security Core Unit 138,000 DAI Proposal Core Unit Budget Streams As per multiple successful budget proposals, a total of 397,184 Dai was streamed to multiple Core Units: Core Unit Stream Amount Proposal Collateral Engineering Services Core Unit 2,780,562 DAI Proposal Risk Core Unit 2,760,000 DAI Proposal Immunefi Security Core Unit 207,000 DAI Proposal Delegate Compensation Recognized Delegate Compensation Payments: February 2022 As per two successful governance polls (1, 2) and the ongoing trial of delegate compensation, a total of 57,665 DAI was distributed to eight Recognized Delegates: DAI Transferred Delegate 12,000 DAI FlipFlopFlap Delegate LLC 12,000 DAI schuppi 12,000 DAI Feedblack Loops LLC 8,512 DAI MakerMan 6,494 DAI ACREinvest 5,072 DAI monetsupply 927 DAI JustinCase 660 DAI GFX Labs Details on the breakdown of delegate compensation for February can be found on the MakerDAO forum here. Community Greenlight Polls Greenlight Polls allow MKR token holders to signal their preferences for collateral types proposed through Collateral Onboarding Applications. Community Greenlight polls occur at fixed times each governance cycle, starting on the 1st and 3rd Mondays of the month, and run for two full weeks. March did not have any Community Greenlight Polls. Check the progress of all proposed collateral types in the Collateral Status Index. What’s Ahead? Links to both the Votes and Public Calls calendars can be found below under Resources. Here are some things to expect and look forward to in March. Votes and Polls There is currently one active signal request, ending April 5th, to onboard PAXG as collateral for multi-collateral Dai. At the time of writing, the Signal Request is successfully passing and can be expected to go on-chain later this month. Pre-MIP Discussions Take a look at the current pre-MIP discussions taking place on the forum: ● Anti-inflationary Proposal ● Auction-backed DAI ● IAM for Surplus Buffer ● Proposal Ideas on the Forum ● [Pre-MIP] Using Gyroscope to cut through Dai’s Gordian knot: its USDC dependency ● An RWA style solution to replace the PSM Delegation and Compensation The March round-up and compensation breakdown for Recognized Delegates should be released by GovAlpha sometime this week; keep an eye out for those reports. Tokenomics Discussion on Maker tokenomics continues into April. stkMKR, overall tokenomics revisions, and potentially new proposals are expected to see further discussion over several months. Keep an eye out for upcoming forum posts and public calls around this topic. Core Unit Activity The first quarter of 2022 has now ended, so some Core Units may be working on submitting their quarterly reviews and updates. These updates will be available on the forum and in the Monthly Core Unit Updates Report in a few weeks. Forum Management GovAlpha just introduced the Forum Explorer as an initiative to help improve user experience by making it easier to browse forum content through accessible filter mechanisms and configurable queries. In addition, GovAlpha introduces impact estimation tags on the forum for active governance items such as MIPs and Signal Requests. The objective is to provide delegates, Core Unit members, and the wider Maker community with an idea of how important new governance items are and how much of their limited time they may want to spend investigating them. Resources Maker Operational Manual - The GovAlpha Core Unit announces the launch of the Maker Operational Manual and invites all members and Core Units to reach out if they wish to provide any help or documentation. Public Calls Calendar Bookmark or subscribe to this calendar to be notified about upcoming Public Calls. Votes and Important Dates Calendar Bookmark or subscribe to this calendar for Votes, Polls, and important dates. Forum and Maker Chat Discuss and debate MakerDAO. Participation Tools Library of useful links for Stakeholders: Protocol analytics, Dai analytics, collateral & liquidation metrics, governance history, and auction data. Governance Portal Voting dashboard for MKR voters. Learning Portal | Technical Documentation | MIPs Portal Learn more about the Maker protocol. MIP51: Monthly Governance Cycle | MIP16: Weekly Governance Cycle Learn more about the Governance activities that occur during the Monthly and Weekly Governance Cycles. Disclaimer Disclaimer: This update does not serve as financial advice or an inducement to vote in any specific way. This update is purely for information and communication purposes only. Feedback Survey We encourage you to complete our 3-question feedback survey. Credit: @nothsa, @Artem_Gordon