Monthly Core Unit Updates: January 2022 January had 12 out of 18 existing Core Units publish some kind of update covering their recent work done. In addition to regular updates, we have a Quarterly Report by GovAlpha, Financial Report by Real World Finance, monthly update by NewSilver, and December’s Actual Expenses vs Budget by Strategic Finance. Other updates include both the Delegate’s January Compensation and Round-up published by GovAlpha, as well as two proposals published by the MakerDAO Open Market Committee. Table of Contents: Collateral Engineering Services Updates Data Insights Updates Development and UX Updates GovAlpha Updates Governance Communications Updates Growth Updates Immunifi Security Updates Real World Finance Updates StarkNet Engineering Updates Starknet Engineering Core Unit Month in Review: December 2021 Strategic Finance Updates Sustainable Ecosystem Scaling Updates Sidestream Auction Services Updates Unified Auctions UI Release v0.6.0 - January 28th 2022 Delegation Updates MakerDAO Open Market Committee Proposals Collateral Engineering Services Updates What’s up for Q1 2022 and beyond? Well, I’m glad you asked. 2022 Planning In December, CES started our 2022 Strategic Planning Process. As a result, we identified five key goals: 1. Support the ongoing onboarding needs of On Chain (crypto native) collateral. 2. Architect and implement Off Chain (real world assets) collateral solutions to aggressively onboard and scale Dai in 2022. 3. Enable a portion of prospective collateral to be onboarded using individuals, partners, and/or intermediaries. 4. Maintain and operationalize all collateral within the Maker Protocol. 5. Support the entire collateral lifecycle with Product Management best practices. The first deliverable from our planning is the CES budget for Q2 2022 - Q1 2023. This was published on Jan 12, 2022 and in accordance with the governance RFC deadline for MIPs. In the next several days, CES will post a Collateral Management Lifecycle (CML) overview to the forum which will give additional details on the deliverables from CES in 2022. There is a lot to do in 2022 and the entire CES is excited to take on the challenges. Not many truly understand the opportunity ahead of us with real world assets. Get ready as the Dai supply is going to scale! Collateral Management Lifecycle (CML) Purpose The purpose of this document is to provide the reader: ● An overview of a productization approach for Maker protocol collateral ● A description of the Collateral Management Lifecycle used within the Collateral Engineering Services (CES) Core Unit ● Background information on the current state of Maker collateral ● Details on the CES plan, approach, and delivery of high-level deliverables in the next two quarters Summary Since the inception of CES, managing Maker protocol collateral as a product became a central theme: MIP39c2-SP12, MIP39c2-SP20, and Collateral Engineering Services Product Plan. Now that we have successfully hired a team and are operational, the focus shifts to the formation and execution of the product plan. As a review, the CES mandate reads as follows: Scale the Dai supply by enabling anyone to onboard collateral in a stable and cost effective manner. To achieve this mandate, it is imperative we manage collateral as a product and introduce what I refer to as the Collateral Management Lifecycle (CML). Mandate Overview While there are many dimensions to the CES mandate, the words stable and cost-effective encompass the following attributes and qualities when managing the protocol’s collateral: ● Revenue growth ● Collateral diversification ● Managing the hard costs ● Stable Dai growth ● Sustainability of collateral ● Technical complexity ● Reducing risk ● Security implications ● Innovation in future collateral types When we reduce the CML to the basics, there are several distinct Lifecycle Initiatives that reinforce the CES mandate and continuing requirements of the Maker protocol. Lifecycle Initiatives 1. Support the ongoing onboarding needs of On Chain (crypto native) collateral. 2. Architect and implement Off Chain (real world assets) collateral solutions to aggressively onboard and scale Dai. 3. Enable a portion of prospective collateral to be onboarded using individuals, partners, and/or intermediaries. 4. Maintain and operationalize all collateral within the Maker protocol. 5. Support the entire collateral lifecycle with Product Management best practices. Based upon the graphic above, the following sections will give a bit more detail on the strategies, goals, and recommendations for the key CML components. Collateral Management (CM) Types Currently, the Maker protocol is made up of two main types of collateral. Examples include: ● On Chain ○ Crypto/Ethereum native tokens ○ DeFi tokens ○ Stablecoins ○ LP tokens ○ Yield generating tokens (aDai) ○ Future crypto native assets like cross-chain, L2, and NFTs ● Off Chain ○ Real World Assets ○ Future implementation of the Real-World Sandbox ■ Example: OFH Tokens from Societe Generale-Forge Based upon the work from the stakeholder alignment meetings, the MakerDAO Initiative Tracker outlines the two initiatives for the Maker protocol collateral and these tracks, CMON and CMOFF will be referenced as such in the CML. ● CMON - Collateral Management for OnChain, crypto-native assets ● CMOFF - Collateral Management for OffChain, real world assets It is important to note, while both types of collateral follow the same CML, there are differences in the implementation details. For example, when we look at liquidations for onchain and offchain collaterals, the approaches vary greatly. Onchain liquidations are primarily driven by price data from an Oracle. When a certain price is reached, an auction will happen within a very small amount of time to repay the Dai in the vault. With an offchain liquidation, while there might be a pricing Oracle, it is a very different concept. A liquidation is a significant and infrequent financial event in the real world. A more common scenario is the protocol dealing with a poorly performing asset. In this case, we would initiate a recourse event to custody the asset with a third party then start the price discovery process and assess the next course of action. It might be that the protocol indirectly holds the asset to maturity or engages a market maker to sell the asset. With the above in mind, we are developing the CML to encompass all collateral types while addressing the specific needs of the assets. Processes, Deliverables, and Operations It is important to point out that each of the key CML components incorporates three key areas of focus. Processes Goal: Define and manage processes, roles, and responsibilities Deliverables Goal: Identify, develop, and deliver tools and resources Operations Goal: Define, track, and communicate results The CES planning uses these focus areas as a guide to identify and breakdown the work for the Core Unit. Please note, the upfront identification and definition work is considerable due to the constructs of working within a DAO. The GovComms cross Core Unit initiative work is encouraging and addressing many of the CES planning needs relating to information gathering and collaborating across Core Units. Once the Processes have been identified and agreed upon, the Deliverables naturally materialize to support the workflow that has been developed. In many cases, the current workflow is in need of refinements and the transition into a new state requires additional work to support the old and the new until we have the ability to deprecate the old. There is also an Operations focus to ensure we set goals and communicate the results of the work delivered. This is an ongoing effort and the learnings uncovered become inputs into helping us refine the Processes. Collateral Onboarding Since Multi-Collateral Dai (MCD) launched in November 2019, the Maker protocol has been evolving its approach with onboarding collateral. Within the Maker Foundation, it was quite a bit easier to select, prioritize, and implement that collateral types to onboard into the protocol versus the processes we work with today within the DAO. As we are all aware, it is time to iterate and upgrade the collateral onboarding process to scale into the current and future needs of the protocol. Today, the protocol has a legacy of theories, philosophies, and opinions behind the collateral we see in the ecosystem. The protocol had multiple phases of collateral onboarding initiatives starting with ETH and working through ERC-20s, Stablecoins, DeFi/LP/Yield tokens and now, ETH derivatives (stETH, crvstETH, etc.) and using tools like the PSM, D3M, and institutional vaults. And now, the attention is focused on real world assets. The current situation with Maker collateral onboarding is clear: ● Processes for collateral onboarding are outdated and not serving us any more e.g., many times, strategic decisions overrule the priorities ● Bottlenecks often overrule all other priorities – for example if Oracles is too complex, that vetoes the choice ● Attempts to onboard collateral that doesn’t add value to the protocol wastes a lot of time ● Attention needs to be given to the protocol’s “quantity” collateral onboarding phase and expectations reset (Collateral Framework Official) – many Greenlight statuses with no indication of if or when the collateral will be onboarded ● Lack of clarity and a single source of information on how to onboard Maker collateral and the expected timeframes CML Component: Collateral Onboarding The first of the two key CML components is Collateral Onboarding. Enablement is a key part of the strategy and it starts with operationalizing the current collateral approach. As CES continuously learns and optimizes, we teach and enable others to onboard collateral and ensure we do not become a bottleneck. While limitations exist today, like oracle costs, future protocol advancements will enable both dimensions of quality and quantity within collateral types. For the moment, it is in the protocol’s best interest to focus on asset quality to fulfill the CES mandate. Processes As a reference and starting point, the Collateral Onboarding Process (COB) is a series of DAO and community steps to onboard a single collateral. The Collateral Governance Process lists the timing for onboarding collateral. The Collateral Onboarding Guide contains all of the domain team details for collateral onboarding. The process requires a cross core unit collaboration and worked reasonably well when it was introduced about 18 months ago. Today, it is in need of many updates to support the realities of the Maker protocol and future collateral types. To update the COB process is a significant body of work. As part of the GovComms cross core unit stakeholder alignment meetings, CES has identified this work as a strategic focus. The first three and fifth Lifecycle Initiatives above are covered within this component. Both on chain and off chain collateral types follow the same process although the details within each step of the process may vary. Deliverables The high-level Deliverable(s) are listed below. This is the initial list and it will change over time to support the needs of the protocol, Dai supply, and DAO. ● COD1 - COB Process ○ Deliver the next major revision for the Collateral Onboarding process to clarify and set the proper expectations for onboarding collateral into the Maker protocol ● COD2 - Off Chain Collateral Onboarding ○ Operationalize and scale the onboarding processes to enable the rapid onboarding of high priority real world assets ■ Supports our enablement strategy e.g. deliver parallel spellcrafting process, clear documentation, toolkits, technical advisory, and other resources as necessary ○ Innovate on existing frameworks (e.g. MIP21) to fit the operational and legal requirements of off chain collateral deals ● COD3 - On Chain Collateral Onboarding ○ Onboard the highest priority collaterals to ensure Dai growth with the crypto native collateral types ■ Supports our enablement strategy e.g. deliver parallel spellcrafting process, clear documentation, toolkits, technical advisory, and other resources as necessary Each Deliverable above is made up of many smaller deliverables. For example, documentation, toolkits, or the onboarding individual collateral types. These will be identified within the CES stakeholder alignment work, tracked within a project management framework, and reported on a quarterly basis. Operations Based upon the Deliverables above, the Operations focus provides the ongoing reporting of results. The definition and collaboration work of the Deliverables is in progress and at this point, CES is able to identify several metrics and general time frames to include here. This list will be expanded based upon the results of the stakeholder alignment meetings and work breakdowns. ● COD1 - COB Process ○ Q1/Q2 2022 - First revision of the Collateral Onboarding process including reprioritization of collateral ● COD2 - Off Chain Collateral Onboarding ○ Q1/Q2 2022 - Onboard SocGen and other identified/prioritized partners (the names are intentionally not included) ● COD3 - On Chain Collateral Onboarding ○ Q1/Q2 2022 - Onboard crvstETH-ETH and additional collateral not yet prioritized This is a point in time look at the current CES work products for this component. Updates will be provided using standard and ongoing communication formats and channels. Some of the CES progress and reporting will be rolled up into cross core unit initiatives and readouts. Collateral Maintenance To date, a majority of the collateral focus has been onboarding. While it is vital to identify and onboard high-value collateral, ensuring it stays that way is equally important. Collateral Maintenance is the other half of the lifecycle process. Today, it is difficult to identify ongoing, holistic, objective, repeatable processes that continually inspect, assess, and adjust the collateral in the protocol. In most cases, a variety of contributors, Core Units (e.g. Risk), and/or PPG (e.g. MOMC) from the DAO identifies situations where a collateral is not profitable, a parameter needs to be adjusted, or draws attention to a specific issue. It is immensely valuable to have a feedback loop from the community and all indications show it is time to operationalize that knowledge and expertise. CML Component: Collateral Maintenance The second of the two key CML components is Collateral Maintenance. Management is a key part of the strategy and continuously monitoring, reporting, adjusting, and making choices about Maker collateral is the goal. This is a cross core unit initiative and CES plays a key role in the coordination and execution of plans that keep the protocol healthy. Processes In traditional finance, there are entire divisions within companies where the main goal is the continuous evaluation of collateral under management. On a smaller scale, the Maker protocol has the same need and the CML component Collateral Maintenance focuses on collateral management specifically. This is another Lifecycle Component requiring substantial cross core unit participation and data inputs from a variety of sources. Hopefully it is clear that communication and collaboration is the cornerstone of most high-level initiatives within MakerDAO. As far as existing processes or sources of data, there are a few today: ● MakerDAO OMC - Publishes a proposal of collateral parameter changes to be considered by the community. ● Risk Core Unit - Provides a critical source of information with their growth and risk metrics and monthly reviews. ● Data Insights Core Unit - Provides deeper insights into the Maker protocol using tools such as the MCD Vault Tracker and providing datasets and resources to a variety of MakerDAO groups. ● Real World Finance Core Unit - Publishes financial insights and data into the health of the Maker protocol. Based upon the data and insights above and others yet to be developed, the Maker collateral will be managed holistically and proactively ensuring the appropriate decisions are made when collateral exceeds the expectations or doesn’t perform as expected. This introduces the concept of Collateral Operations and a focus for the CES Core Unit. It is a proactive activity that monitors the health of the Maker collateral to assist all of us in knowing when to take action on a specific collateral type or an entire category. In the past, this has been a bit bumpy especially in the cases of collateral offboarding or working with under performing collateral. For real world assets, there is a requirement for ongoing collateral analysis and review since the concept of a liquidation is very different from the Maker protocol’s on chain process. The fourth and fifth Lifecycle Initiatives above are covered within this component. Both on chain and off chain collateral types are considered in this initiative although the details within the steps of the defined processes will vary. Deliverables The high-level Deliverable(s)s are listed below. This is the initial list and it will change over time to support the needs of the protocol, Dai supply, and DAO. ● CMD1 - Collateral Operations ○ Deliver and implement the first iteration of the Collateral Operations process to ensure the proactive management of Maker collateral ■ An important use case is the management of collateral onboarded and iterating on MIP62 CES is in the initial phase of starting this work and Collateral Operations is made up of many smaller deliverables. These will be identified within the CES stakeholder alignment work, tracked within a project management framework, and reported on a quarterly basis. Operations Based upon the Deliverables above, the Operations focus provides the ongoing reporting of results. The definition and collaboration work of the Deliverables is in progress and at this point, CES is able to identify a general metric and time frame to include here. This list will be expanded based upon the results of the stakeholder alignment meetings and work breakdowns. ● CMD1 - Collateral Operations ○ Q1/Q2 2022 - First iteration of the Collateral Operations process implementation This is a point in time look at the current CES work products for this component. Updates will be provided using standard and ongoing communication formats and channels. Some of the CES progress and reporting will be rolled up into cross core unit initiatives and readouts. Summary While there is a lot of information in this document, the goal was to give the community an idea of the CES plan and process we are following to fulfill the mandate and deliver value to the protocol. Yes, this will change as soon as this document is published and the reporting and feedback mechanisms will be designed to provide meaningful updates on an ongoing basis. Very quickly, the deliverables and metrics will get much more specific once there is better definition of the dependencies/requirements from key stakeholders and Core Units. This is already underway with the stakeholder alignment meetings through the ongoing GovComm work as well as the continued onboarding of the CES team. Thanks for reading! Data Insights Updates New Data API From @data-insights-cu we are happy to announce the new Data API! TL;DR You can jump straight into the documentation here: Data API - ReDoc. The new Data API We’ve refactored the old MCD Vault Tracker API and added endpoints for other domains apart from vaults. We will be maintaing the previous API for the next month to allow everyone to migrate properly. The new Data API allows you to query data from: ● Governance: executives, polls, staking, proxies and delegates. ● Vaults: current & historical states as well as any transaction type. ● Liquidations: barks (liquidation triggers), auctions themselves and their evolution. We also created a page in our website dedicated to the Data API, which includes a quick getting started guide and release notes. We’ll also post any major updates and issues there. Link to the Data-API Documentation. Important changes The biggest changes have happened in the backend so you should experience a more consistent and performant api. ● The endpoint /vaults_list has been deprecated in favour of /current_state. The functionality remains the same, you can get the current state of a single or all vaults. ● The new endpoint /vault_snapshot allows you to query the state at a specific time in the past. In future releases we will also allow for querying multiple vaults. Next Steps Next up we will be releasing the Protocol Parameters dataset, which will also be available via the API. We are constantly improving the functionality and the documentation, so feel free to send us your feedback! Protocol Parameters & other improvements Introducing the Protocol Parameters dataset Here at @data-insights-cu we have a freshly baked dataset that focuses on the parameters of the protocol. From collateral-specific parameters, all the way to system-wide parameters. You can filter the data by parameter name, collateral or by date, allowing to answer the following questions and more: ● What were the protocol parameters at this date? ● What impact or changes did this executive vote have on the protocol? ● What were the historical values of this parameter for this collateral? We provided 3 new endpoints: ● parameter_list: list of all available parameters ● parameter_snapshot: the value of the parameter ● parameter_events: the change in value for the parameter You can pair any of your datasets and analyses with a good glass wine the parameters dataset to understand the effect of spells on the protocol. We strive to make data accessible to as many people as possible so if you don’t know how to work with the API don’t worry, reach out to us and we’ll find a way to help you. Other additions to the API We’ve improved the governance dataset and now we also provide a dedicated endpoint for spells. We’ve included an item called “impact” which lets you know how many protocol parameters it has impacted. We’ve also created a new executives endpoint; while the original one allows you to get all events related to the executive, the new one acts as a summary of all available executives, including their human readable title! A quick note about data accessibility We are constantly trying different ways to help people access data as easily as possible, so with that in mind, we are exposing the raw tables feeding our GUIs (Governance Tracker, Vaults Tracker) for anyone to download. For more information, please visit our website: Data Insights CU Development and UX Updates Instead of reading, also consider watching the recorded walkthrough below in which I’ll talk you through this update. Loom DUX Roadmap Spotlight: Q1 2022 Introduction Hey everyone! Happy New Year, on behalf of the DUX team! We hope everyone had a happy and healthy start of 2022. We’re eager to kick off our quarter by introducing a new concept for team updates to MakerDAO: Roadmap Spotlight —a quarterly update cadence from our team! Every three months we’ll share an elaborate forum post and pre-recorded walkthrough in which we’ll wrap up the past quarter and commit to a focus for the next quarter. We’ll touch upon prior commitments and the progress we’ve made, lessons learned, and the prioritised themes for our roadmap. Enjoy the read and please do reply below if you have questions or suggestions! Looking back: Q4 2021 The past quarter was our first quarter as an official Core Unit since graduating from the SES incubation program. It’s been an incredible few months in which we were able to build our processes and sprint cadence, build a fun team dynamic and meet a lot of MakerDAO people in real life. For those who are not yet familiar with the DUX (Development & UX) Core Unit, please refer to our Notion website. What we’ve committed to Here’s a full list of the commitments we’ve made in September 2021 during our CU’s launch pod call What we’ve delivered Here’s the current status of the aforementioned commitments. Refer to the recorded walkthrough for an elaboration on each of these. All full release notes can be found here on our Notion website. Here’s a list of the delivered features since September 1st. Please do note that a lot of beneath-the-surface engineering and research work has been delivered in addition to these tangible features. What we’ve learned Through better mastering the codebase of the Governance Portal, staying in tune with development trends in DeFi, and also through incidents we have amassed a lot of learnings these past three months. These lessons learned were used to define improvement points and roadmap items, which we also address in this forum post. Our main lessons learned in the past three months are listed below. Refer to the recorded walkthrough for an elaboration on each of these. ● Frontends are part of a dapp’s attack surface (eg. BadgerDAO) ● There are opportunities for simplifying and modernizing our stack ● The Governance Portal needs better error handling ● We need to be mindful of third-party dependencies of our apps ● We need holistic automated tests that cover edge cases which are hard to manually test ● We should include feature usage in our prioritisation framework Looking ahead: Q1 2022 Team goals for the new year To kick off the new year we have spent two days doing FigJam workshops and discussing focussed topics, which helped us define a focus and progress on more abstract but important initiatives. Team goals for 2022 included a sharper focus on security and testing, working more data-driven, making time for longer-timeframe work (eg. L2 integrations, gamification) and maintaining a fun and healthy team vibe. Personal goals for 2022 included more engagement with the MakerDAO community, more writing/blogging/Tweeting and a renewed focus on personal productivity. Roadmap focus As explained in our Launch Pod presentation back in September 2021, DUX team does not work with static roadmaps. We work with a fluid roadmap based on constant prioritization of work items, based on collected input from multiple sources. Please refer to this page on our Notion website for more info on how we build and prioritize our roadmap. Our roadmap focus for Q1 2022 is centered around three themes: