OnlyMP3.to - Governance and Risk Ep. 186- QH82k0Lkpi0-192k-1... Sun, 4/17 1:01AM 1:15:47 SUMMARY KEYWORDS dai, maker, pool, psm, liquidity, collateral, curve, proposals, protocol, assets, expenses, vaults, budget, crypto, whales, next slide, yield, lending, mips, growth SPEAKERS ElPro, David Utrobin, Artem Gordon, Nadia Alvarez, Pablo, Akiva Dubrofsky, Niklas Kunkel, Sebastien Derivaux, LongForWisdom LongForWisdom 00:03 Hello everyone, and welcome to the MakerDAO Saito governance service meeting number 186, taking place on April 14 1700 UTC. Welcome everyone. As usual, we got an agenda to get through, we're going to have some updates about governance, and the forum. We've got some initial updates. And then we got a discussion later, I believe at about curveballs and Dai market share and liquidity. So yeah, everyone's sort of keeping. We're recording this call. So you know, we'd love to hear from you. But please try not to speak over each other. You can use the hand race functionality, if you wish, or just jump in as well. So with that, I think get started. So get some votes. We've had one weekly poll finished this week, which passed, it was the justing the curve, stick to Paul volt system parameters, increasing the debt ceiling to 50 million and the target about what debts will gap to 10 million. That'll be an executive this week. There's also 12 month ratification polls currently in progress. So please vote in those if you haven't already. I'm sure probably will give us a more so on from Epstein Maga. better idea of what's going on with those a little just a little bit. So moving on to the executive. Last week's executive parsed and executed its contains Maker Open Market Committee parameter changes. A small increase the curves like teeth for that ceiling. Recognized delicate compensation for March and funding for the ESA Amsterdam Special Purpose fund. So tomorrow is executive proposal includes offloading the two USD collateral as passed a few weeks ago, the polling stage it will include those those curve stick teeth Paul parameter changes I mentioned just a second ago. It will include funding for the ambassador program pilots. A little bit of funding for the RSC you according to one of the previous budgets, and a replacement for the Josua CUPA stream to resolve the bug in the smart contract might have nothing to worry about. That brings us into our governance updates and brings us to MIPS. Who's up for MIPS this week. I should know but I don't probably can't hear you probably use it's literally Okay, can you hear me now? Yes, yes, yes. Okay. Pablo 03:03 Yeah. Yeah, the volume goes up. Okay, so I hope you guys can hear me now. Yeah. Sure. Okay. L P Yeah. Yeah, the volume goes up. Okay, so I hope you guys can hear me now. Yeah. Sure. Okay. That's okay. So next slide, please. We have a couple of weekly segments of proposals. The single request to promote an IP 43 SP referring to an on chain short ratification poll blast. This poll will be going up on Monday 18th and ran for three days. As you know, this proposal amends MIP 64 to give Emil fi security more discretion to determine the bug bounty scope. There will be a second certification bowl going up on Monday for me potensi nine, SB 30, which whitelists Oracle access to Oasis app for these Oracle's that you can see on your screen. Next slide, please. Let's now take a look at the ratification polls which went up on Monday 11th and will close on Monday 25. We have to MIPS supposed to set proposals and maybe 66 per ways lessons here with 100% No votes at the moment. We will be having a given talking a bit about this proposal later in this goal. Also a bit of a Myklebust some of the images for this proposal are broken in the MIPS portal and in the comments. The poll points to the pics in the former in a couple of minutes but cannot do much about the latter. So sorry about that. Maybe 6070 and methodology review process for a structured finance transactions with yes in the pole position. Next slide please. Thank you. We have the mandate refresh for governance communications, which has close to 100% yes votes. While none of its budgets either the expansion or the more modest one are currently passing Looks like the inside school unit also has a mandate to refresh and the budget. This budget too is a bit contentious but both proposals are currently passing. Next slide. We have a budget for the political and engineering oriented with a comfortable yes to no ratio. Next slide. We have a coordinator onboarding proposal set for events. He was the one that is currently passing this building the teams to be in charge of handling the identification, the organization and the execution of MakerDAO branded events. Next slide. Yes, the first ball formalizes the additional collateral engineering services as part of the collateral onboarding workflow. It is passing with 100% Yes, and so is the ball that modifies the MIP six collateral application form. Next slide. Finally, with 100% yes votes the proposal for the dissolution of the content production multisig is passenger. Let's move on to the proposals in RFC. Excellent. So maybe 65 could have made it into this governance cycle but decided instead to remain in RTS we will know to address the concerns product by the community. Maybe 68 is a self contained collateral onboarding method that will import and activate a real world asset vault, backed by the assets of a trust arranged by money tallies. Maybe 69 formalizes technical work completed to deliver last week rolls on the year to MIPS 70 on boards and activate a real world asset folder with priority for the purpose of acquiring loans from a TD Bank. 71 exempts MIP 70 from IP 65 Fly collateral bloggers. Please note that these two proposals with 70 and 71 will remain in RFC for the foreseeable future as stated by the author, and that HP bank has published an IP six and is using the existing collateral onboarding process. For more information about this, please go with MIPS seven. MIPS 72 authorizes six is capital as a real world asset arranger for Maker DAO MIPS 73 is a MIPS 65 inspired, self contained collateral embodiment. Excellent. And finally, yes, so we have been having having for some time now I budget proposal for the strategic cabinets Core Unit, and two amendments that aim to improve the Korean framework by revising the budget process and the coordinator folding process. And last but not least, we have the facilitator onboarding of Psychonauts for the immune fi security correlates. Secondary is currently a deputy facilitator for this current. And that's pretty much it hides. Well, it was a bit long, I'm sorry. Thank you. Thank you. Hello, LongForWisdom 08:01 no problem. So the updates. Alright. Awesome. He's gonna give us a quick update of what's going on on the forum. L Artem Gordon 08:10 Yep. Hey, everybody. Happy Thursday. And just quick welcome to the forum recap, we're covering the top announcements, discussions, and current signal requests for the week of April 7 to 13. And we'll begin of the top announcements, starting with real world finance Core Unit who has been working closely with entities that are interested in partnering with Maker to onboard off chain collateral, and the teams are currently reviewing eight proposals for new collateral which they will have to prioritize based on a combination of factors that are provided in the post. And for more details on the proposals themselves in the prioritization efforts, check out 08:51 the post. Next up, Artem Gordon 08:55 we have a bug that has been discovered and the gelato top contract then the fix has already been deployed. No funds are lost or are at risk. The PE team has also made some changes to update the vest to point to the new contract and the next executive. 09:14 And moving Artem Gordon 09:15 on to discussions, there's been a lot of discussions, continuing the ongoing discussion on the most effective process for onboarding new assets and to Maker this collaboration post between CS risk growth PE and Oracle core units have they offer a set of guidelines for assessing candidates for new collaterals? 09:38 Next up, Artem Gordon 09:40 we have a post that's inspired by the recommended guideline metrics for unchained collateral. Trust or trade posted an open letter aiming to provide perspective on the impatience that some community members have mentioned concerning proposals and the process of onboarding real world assets. And next up. We have several authors who contributed to posting a lengthy but very detailed and candid contextualization of Maker Dow's evolution of real world assets, beginning of the early Maker 1.0. Today and even including future opportunity, opportunities A A A A and potential around real world assets. And moving on to our signal requests that are currently active. We have two going on right now first up, Bourbon has recently revised his MIP 40 C three modified strategic happiness Core Unit budget, and due to the original budget quarter now being complete, Andrew requests a one time transfer of 35,000 Dai to cover the time gap between budget cycles, the funds will be used to produce and deliver swag for Amsterdam coming up and other upcoming events until the next governance cycle. The vote will run up until April 21. And it's currently winning. Next up, we have true phi who is signaling to onboard a d3 M for a newly created true phi three month maturity Dai lending portfolio with depth ceiling of 50 to 100 million Dai Ryan is a member of truefire and he states that this onboarding is in line with Maker DAO is aggressive growth strategy. He also believes that this action will promote non crypto lending opportunities, customized loan opportunities, future collaborations, however, some downsides to this gar to this are risks and smart contracts, multi six illiquidity and compliance. Now the vote will run up to April 25. And it's also winning with yes votes. And that's it for the forum recap, check out the forum at a glance For more discussions, ongoing initiatives and help wants it and a quick note on the monthly Core Unit updates coming out soon. The publication will be out by Monday latest just waiting to get all of the march updates in there. And that's it. LongForWisdom 12:06 Awesome, thank you. Awesome. Appreciate your thanks. So that brings us on to initiative updates. David, are you on running? Oh, no, it's yes, it's faster. It's exciting. All right, who's up first? 12:30 That would be sorry. Did not find my unmute button. LongForWisdom 12:34 Yeah, no worries. Yeah, go ahead. Take away MCC. 12:37 Next slide please. So hey, all this is a yes from the forums facilitator the street finance Core Unit. Just brief legal disclaimer before we kick things off. As far as for informational purposes only it does not constitute financial investment, legal, regulatory or tax advice. Next slide please. So the protocol earn 6 million in revenue last month, a 15% decrease risk prior month and a 31% decrease in prior year. Last March was extremely bullish period which saw eBay rates rise to a high of 5.5%. So that means a 13% decrease in net interest income becomes much more palatable with current EPA rates 60% percent lower today. On chain workforce expenses increased 37% from last month, driven by the timing of the PE budget draw, which had February's budget captured in March as well as March marches budget. One of the few bright spots on his abbreviated p&l is our Oracle gas costs, which were down 45% last month due to I think, much lower NFT trading volume and minting volume across Ethereum. Next slide, please. Here's a brief month over month and quarter over quarter walk, showing the walk L L from our recurring net protocol income, which just captures stability fees and our operating expenses, down to our March income. So we have a walk from February to March showing you know the largest driver is the increase in workforce expenses. And with a modest offset on lower gas expenses. And on the quarter of a quarter view, we see a much higher driver coming from the change in our assets are risk weighted assets, and then also a much more modest offset on the Oracle gas expense. Next slide please. Sebastien Derivaux 14:48 So on the lending business, we can see that we have an ongoing decline in dining with the vault critical size and loss of market share. And that's mainly due to the fact Now that we are not in a full bull market, but as you can see, we see that healthy share between ES and Bitcoin even if bitcoin is going down significantly. Next slide please the overview of the balance sheet assets as you can see we have a small increase in the total yield bearing assets, you need to take into account that we have a some gelato pools in that that are not yielding a lot. And one is now winnings it will be spent but it's still contained as you're being assets because it's alone. And we have six two persons that are in USD C. So the good part is that we have a lot of liquidity so that's very good for the bank. The bad part is that we are not generating a lot of revenues from this part. Next slide, please. On the risk metrics perspective, it's not a big difference since the last month so as you can see for the capitalization ratio, which which is surplus buffer or equity, divided by the yielding assets. So what is really risky if USDC we are still at three 2.3%, which is not a lot if you want but still something they I compared to historical numbers. One reason is that we don't have a lot of loans outs crypto loans outstanding, that's the main issue. And on the leverage ratio, which is equity divided by all the assets that we have, let's say USDC is a PSM ns a crypto loans, it's quite flat over the last last year, more or less, just below 1%. And that's around it for my bots. Next slide, please. 16:56 Hi, everyone. So here to talk a little bit more about the market dynamics. We're gonna go through an overview of the different market share trends, and talk a little bit about trends on arbitration as well. Here, the prevailing trend in the East lending market is one of decline, month on month, quarter on quarter and year on year. With we're flagging the the sort of last day of March because there was a significant move in market share on that literally on the 31st of March, with Nexo moving east in and out of vaults. And so creating a little bit of churn there at the end. One of the things that's worth highlighting from this slide is that in this environment of sort of depressed lending demand of is nevertheless gaining a lot of share, largely driven by their liquidity mining incentives. And so yeah, the story here is one of trying to weather the storm look for growth where it occurs, nurture the whales and make sure that they don't leave the vaults and stop generating revenue for the protocol. And then yeah, hopefully wait for one day for our to stop pumping money in sending it to people. Next slide. So on rap BTC, the it's an environment contrary to the one that you see an E, where lending demand is increasing quite nicely year on your other takes the crown for growth entirely because of the last minute move again by Nexo withdrawing 100% of their BTC vaults. But with the intention to repositioning, reposition them back into the protocol eventually. So we're hoping to see this move back into the vaults, of course, the month of April. But I think what this slide does is highlight the vulnerability that we face in this space and shows how competitive it is barriers to entry and exit are essentially zero. So this is a very competitive rate driven space where whales hold a lot S of sway. So yeah, it'll be important to keep an eye on keep an eye on those in the months for going forward. Next slide. There's an impressive stable coin growth story and arbitrary, as arbitrary in general is sort of peeling away from the rest of the level twos in terms of total value lock. And the recent run up that you see towards the end, starting in mid March, is largely due to the acceleration from the launch of the Stargate bridge as of as of the mid of last month in but the good news is that our team hexo you know, the protocol engineering guys, they're in touch with Stargate. I won't speak for what you know how advanced those discussions are. But the idea would be to have Dai listed on Stargate as well as its, you know, as a clear the $2 billion dollar value locked mark and just keeps going. 19:52 In Yeah, and then final slide. So the final slide where I think we should spend Maybe a bit more time to make sure that the information gets properly digested, we're basically showing a three plus nine forecast for the full year 2022. We have, we're breaking out the interest income on loan balances and the interest income generated. And we're looking at things on a quarterly basis. So actuals for 2021 2022. And full year actuals for 2021 plus forecast for 2022. In other words, this full year fiscal this sorry, its full year 2022 figure, as actuals of q1 and the forecast for the rest of the year. The way that we've built up the assumptions is with as much conservatism as we're able to stomach, what we're looking at is basically relatively flat eath lending market, which would be an improvement relative to the lending market today. So we're hoping that over the course of the year, and these balances are essentially an average throughout the year. We're hoping that these balances sort of stabilize as the as the year moves on. But there's one major catalyst with the merge and a lot of uncertainty on what that will do to lending demand. If it accelerates lending demand and stickies and Maker is uncompetitive and it might accelerate market share gains for Ave, for example, were able to take some of that share, it might turn the trend around and start building the vaults. And he's again, on W BTC. Were basically projecting on the back of sort of good on assuming that next returns the BTC into the vault, we're projecting sort of good growth on the back of general BTC market growth. Real world assets, we're starting from the very, very small base as the foundations were sort of built throughout the year 2021. The first they started in April 2021. So they don't show up in q1 of last year. And what we're hoping is that we are able to hit an average of sort of 300 million, that's eating a lot capacity in on average throughout the year, which would imply about 600 million towards the end of the year. And then others captures basically all the other worlds that generate a little bit less yield. So what we see here is that what we're forecasting is essentially around 40 million Dai in interest income for both is for each of these and W BTC. With another 20 from real world assets and the other vaults in the system. So here, I think this highlights again, the story. You know, it's important to nurture and grow the whales, we need to be able to make much more comprehensive rent revenue generating bets. And in terms of in terms of expenses, there's it's worth highlighting that 2021 is understated, because of the dissolution of the foundation, sort of in the middle of the year. So some of these expenses are actually understated. So it's not like the protocol was legitimately running with only 70 million died. Last year, the expenses increased. But I think what's important is not to focus on the absolute amount, but rather think about the expenses and ROI turns and look to invest in where they're able to get the maximum amount of growth possible. This particular environment that we're in at the moment is quite sideways, quite volatile, but challenging to work in. Expenses, particularly salary expenses tend to have quite a fixed nature. So this operating expenses line has, has, it's essentially a sort of fixed liability because the whole protocol is priced in Dai terms, and then the rest of the revenue items, they're, they're floating relative to Dai. So there's a strong sort of exchange rate effect there. But as we think about putting these expenses together, yeah, again, important to think of them in ROI terms, and to transparently communicate how those expenses are performing, to the Maker holders to hopefully avoid a lot of the fiery back and forth that we've had in some of the budget expansion with us. And then finally, one thing that's worth flagging, we're not showing here a balance sheet picture. Currently, our balance sheet is yielding very little. And this is essentially a huge opportunity costs that we're incurring as a protocol, and it will improve the resilience of the protocol and overall profitability to increase the asset productivity by putting the balance sheet of stable coins to work by putting our treasury to work. These revenues are diversified and they act as volatility cushions when the markets go up and down. And investing in real world short term bonds also has the added benefit of being less correlated to the overall crypto market so providing a stable source of revenue on top. 24:50 I think I've ranted enough. I think it'd be nice to hear from people if they have any questions or if anything isn't here. 25:00 I was on mute the whole time. LongForWisdom 25:04 No, no, you're fine. 25:05 Okay. All right. Just no reaction, right? LongForWisdom 25:10 Like to think someone just like, it's funny. Yeah, and I appreciate the presentation. Yeah. I guess maybe for just for me sort of less familiar with sort of, you know, sort of financial forecasts and this sort of thing. I guess that's like a bottom line, like thing we should take away from this? Yes. 25:35 Yeah, we tried to. So again, these are. So these are forecast for the end of the year, right. One of the things that we'd like to highlight is that, who knows. So, you know, eath balances, we're basically projecting them to be flat, on average, flat relative to the end of March of this year. And this, this would be a gain relative to the trend, given that the lending market is compressing, but we don't know what the lending market will do in the coming months. So L L yeah, all of these figures are, you know, the the, I think the key takeaway is just focus on driving as much growth as we can with every expense that we make, and focus less on the absolute amount of the expenses and more on the 26:21 the more on the, 26:26 on the productivity. Yeah, ROI. Sorry, I've got discord pings, distracting and making more revenue generating bets is very important, I think, related to this asset productivity question, we need to be we need to make have more conviction and make more just make more revenue generating bets with the expenses that were incurring, in order to improve the long term potential of some of these bets to become a real source of growth. And I think related to this, if you look at the, if you look at the real world assets picture. I mean, we're operating in this sort of, in the in a credit deficit, environment, the rates are low, with, with more competition, they get even lower. So here, it's important to get these values as large as possible and as large as we can. The benefit of the real world asset space is that it's uncorrelated from crypto. And I think this is a big advantage of this asset class. First, krill would help I don't have the real answer for how you nurture the whales, I mean, rates are going to be a big feature of keeping them attracted to or linked to a protocol. But the reality is that it's very easy for whales to switch from one to the other. Marketing cu might help increasing demand for Dai. And I think in this regard, that Maker has a key advantage relative to some of the Atlantic peers, notably IBM compounds. Now we have a stable coin that has or should have organic demand around it, the more demand there is for Dai. And the more activity there is, the more interesting it will be for people to collateralize their crypto loans. To create that. 28:14 I'll just add that we are doing a lot of research as a team into the segmentation of our customers versus have and compound and looking at the different markets for those customers. And then further digging on chain to research and analyze what those people are using Dai and other stable coins for so we can better position the vault as a product. So we're talking to growth a lot about these research activities. And hopefully, we'll have more to share in the coming months. LongForWisdom 28:54 Alright, question. Oh, yeah, 28:58 just what in terms of the whales? Just wondering how much kind of behind the scenes do we know who the individuals are? And what kind of deck directly communicate with them able to directly market to them? And are we some some someone somewhere in our open community, L directly market to them? And are we some some someone somewhere in our open community, are we doing that? It's advantage, obviously, to have those personal relationships and just curious about the landscape there. Nadia Alvarez 29:30 We have a personal relationship where the whales as seven said like the biggest whales are next on Celsius. We have like a personal relationship with them. We are in like, constant communications with them. We receive feedback with them like thanks to them. We thought about the creation of the institutional books. And yes, as someone mentioned in the chat, like in the end like they are they what they care about more, what they care about the most is about rates, predictability, and capital efficiency. So that's what they are looking for. And with the institutional bolts we are trying to like give them a product that will solve that we are also in conversations where not whales, but like the largest users of the protocol. The ones that have the largest bolt sorry, but not of the size of the whales. And will some of them I think, you will know, one of them is Gnosis who has like a huge bolt with a steak eat. And of course, when when we talk with DAO has data on two that have bolts within Maker, and if we want to, like do something else with them, so they can like, increase their position, we have also to give them something in return. So that is why we are considering that maybe we could think about onboarding their token as collateral, but in return, they have to mean that least x amount of dye and keep it for one year, or I don't know how, for how long. So we are like trying to do this kind of things. But you're absolutely right. Like the thing with these whales is that they need our one to one support. So yeah. LongForWisdom 31:37 All right, thanks for that question the answer? We're ready to move on. Does anyone have any other questions about finances? ElPro 31:52 Yeah, actually, hopefully, you guys can hear me. Cool. This is Frank, three F delegate, just for the strategic Core Unit. When thinking in bets, and you're looking to obviously take on more risk, when you have the ability to do so right. And there is possibility to take on some some more risk right now. So I'm thinking in bets, you should Core Unit be hiring more? And the reason why I asked that is because, you know, I'm seeing a lot of other side chains or layer ones, deploying or these platforms, and most of the time, they're doing liquidity mining with USDC USD T. And it's kind of frustrating. I mean, I get it, right. Like you don't want noncanonical Dai to just go all over the place, because then it gets messy. So I was just wondering, when thinking in bed, how do you guys feel about core units? hiring more folks? So we can kind of keep up with all of these platforms that are raising, you know, quarter of a billion dollars in 48 hours, which is bananas. But yeah. 33:05 I guess for hiring the it kind of goes back to the ROI, and what value is being created by the Korean Air the expansion of Core Unit, like, what problem are they solving? Are they bringing N L E on revenue? Are they just a cost side but making things more efficient operationally, which could indirectly lead to more revenue? I think it's it's hard to make a blanket statement one way or the other. But there's the for, for one thing for me, I think, you know, on the product side, the more we expand and do r&d and products, I think the higher revenue, we'll be able to generate and making some of these revenue beds. So I would hate to under invest in engineering, for example, especially when we have all these d3 M's MCD on level twos and other chains in the pipeline, which can really drive a lot of organic Dai and revenue growth with the new vaults. 34:05 To that end, I think there was a comment earlier in the chats from Luke asking whether it was cash or or accrued type of expenses. I think one of the disadvantages of transparency with Blockchain space is that all of these expenses will sort of hit early. And the benefits are felt later. So you know, when you make an investment in technology, for example, in a regular company, you might find ways to smooth it over with with by capitalizing around Atlanta, should we really do this and in blockchain, so you have worth keeping in mind when discussing. Yeah, so to pay grandparents point all, most of this is basically cash, right? It's very difficult to make a girl's near impossible. And so this is worth bearing in mind when we think about budget requests. And yeah, the final message is to just think about The volatility of this market which might turn and just making sure that we're positioned well to take advantage of the upturns for clarification in case I in case I misspoke and said that an extra BTC went away, I think I was referring to a generalized example of whales going to work specifically next one tomorrow LongForWisdom 35:30 seems like maybe a good place to to move on. Time so I appreciate the presentation strategic plan. It's always good to find out where we're at. David, you want to contextualize. Alright, next, I think we have Akiba, he's gonna sort of talk a little bit about IP 66. And if it was listened to stuff originally, I think. Akiva Dubrofsky 36:07 Hi, everyone. I'm gonna tell you a little bit about the map. We've submitted MIPS, MIPS, MIPS 66. One of the key aspects of MIPS 66 is trying to develop joint business development to promote fixed rate Dai. We believe that factory Dai is essential to the development of Maker Dai not only on the VOD side, not only fixed rate was also fixed rate die. And we really did. That's the case because all financial institutions either match their assets and their liabilities, Maker DAO was no different. And part of matching your assets and liabilities is matching floating to floating and fixed effects. So what we see is that no, just like Maker right now has a lot of flooding assets and flooding liabilities, it will also need to have fixed assets and fixed liabilities. And part of doing that is using interest rate derivatives. And that's why we developed the product for Maker DAO over the past couple of years, which will allow which will allow for fixing interest rates without interfering with any of the core Maker code. Rather just you know, the same way people use money, Legos and abstract over different protocols. We can abstract over Maker DAO, in the same way with these money, Legos, and create fixed rates. We believe that this is beneficial, not just from the perspective of assets and liabilities, but it's also L A beneficial from the perspective of decentralization it's important to have to have composable instruments and not tie everything together into the same codebase we believe it's important to also have fixed Ray protocols which abstract over Maker DAO rather than going into the core plumbing and that's why we developed this product. To go further, I would say that one of the key parts of of developing a fixed rate ecosystem around Maker and we're ready to go and start doing this right away she has to MIT passes is this business development and westfire we partnered with two regulated investment banks. One is first Penny investments in Australia and the other one is true altitude in the UK. And using those partnerships, we believe we can grow. Maker Dow's Maker Maker DAO is pipeline of fixed rate investors. All primary largely in those jurisdictions you can all share Yeah, but also in other places across the world, because those companies also have a presence in UAE and also in Switzerland. So we believe that in order for Maker to achieve maximum stability and decentralization, it's important to have multiple fixed rate, fixed rate ecosystems, not just one that multiple We also believe that in order to get there, we need strong business development, strong decentralization and that's why we propose also to that if if if the mid passes will also open up our patents to the community which two of them have been granted and we are willing to open those up to the community if the if the mid passes and we want to create an open fixture ecosystem or Maker so we can see DeFi thrive and I'll leave it like that if you guys have any questions. Appreciate LongForWisdom 39:30 Anyone, anyone have any questions before we move on? Akiva Dubrofsky 39:47 Alright, I guess that's it. LongForWisdom 39:49 Yep. Since that we're good. That brings us to our discussion segments. David, would you like to introduce the topic today? David Utrobin 40:03 I honestly I think a better person to introduce the topic would probably I don't want to throw anybody, like, under the bus, so to speak, but I think Sam has has a pretty good grasp on on this whole thing. So yeah, if somebody with more knowledge on this topic wants to introduce it, I'm happy to give it over. 40:26 Yeah, sure. Um, so yeah, I guess this is about the recent news of the four pool trying to replace the three pool on curve. So, you know, I people read crypto Twitter are probably aware of this. Sort of, I guess this topic is about what we want our response to be, if any sort of thinking L A L about what the ramifications are of potentially losing the three pool and possible solutions. Yeah, so I didn't have anything prepared. LongForWisdom 41:06 Yeah, that's fine. That's a good intro. Yeah. Does anybody have any comments or thoughts on this? Niklas Kunkel 41:15 Yes, so there's a couple things here, right. So I don't think that, personally, I think that three pool is going to really survive, right? It'll be something between a four pool and an A to pool. Question is, you know, how much does it affect us in the short term? And how much does it affect us in the long term? Can we do something about that? And should we write? You know, in terms of right, the the peg, right, we don't struggle with that in the slightest, right? We have enormous gobs of liquidity in the PSM that are, you know, over 3x, the amount of liquidity that's, that's currently in three pool, right? For pool, right, we would never have wanted to really join anyway, right? Because basically, it's ust rug risk, right? So the way it works with a curve pool is you are the it's essentially whatever is the weakest link in the pool in terms of all the tokens in that pool. That's what you basically have almost full exposure to right. And in terms of tuple, right? I mean, there's there's not much that we can that we can do about that. Right? And yeah, so that's, I see what you mean by Dai plus four pool. But the problem is, nobody wants to incentivize that. Right? The way it works right on curve is that the projects that want to incentivize liquidity, right for their token, right, they acquire curve for the bribe curve voters in some way, right. And so without those bribes, or without those votes, you would never get the dipole to have enough yield right for any amount of liquidity to build up enough. So then, then the question kind of is, well, should Maker try to get a stake in curve voting? And I would say, No, it's one, it's really expensive. And too, it's one of those things where the people that got in early really got like the best kind of chess position here. And we would never build up a significant enough steak to really swing our, our our dingdong around. And we, then you can kind of look at it and say, Well, okay, how likely is curve to be the, you know, the dex, right, as of tomorrow of three years from now or five years from now? And I think that's, you know, quite questionable, right? I think we've seen a lot of like jockeying between indexes, right? Or even decks, aggregators, right over the years, and there's nothing that tells me that, you know, curve is going to be the central hub of liquidity, you know, for forevermore from that one, right? We've through G uni, right through the increasing debt ceilings, and through the amount of leverage that we allow, right? We've already started building up significant sums of liquidity in in the uniswap, v3, right, and that's just going to continue. So, really, like, you know, our users not going you know, from from a pig point of view, it's, it's completely irrelevant from a liquidity point of view. You know, we're already building up liquidity on uniswap. The only thing you could argue is from a unit user point of view, you know, we'll they not be exposed to Dai, because Dai is not in the curve for pool or in the curve tool. I don't know how to answer that. I don't know what the value of something like that is. But I personally like looking at all the information. I don't think we really have to do anything. Like I think Tara is really trying to hype this up into being something bigger than than it really is. And I think it's, it's good for them. But it really doesn't matter to us that that much. Pablo 45:37 L N P Pablo 45:37 So that way, I Niklas Kunkel 45:39 know there was a lot of, there was a lot of talking, so I'm gonna stop. 45:41 Yeah. So the way I view this is less of like an actual issue for the protocol, more of like a marketing PR problem, kind of and, you know, I don't think it looks great to do nothing. So if we could do sort of easy response, I think that could potentially work. So one idea that's been thrown around is, they have four pool, we can make five pool with, like busd, USDC, USDP, and a couple others, that I'm not thinking off the top of my head. So yeah, this, this could kind of be a narrative shift in our favor, we wouldn't really have to spend anything, we would just redirect some of the PSM supply into this five pool and give high leverage on it. So that the fees, it'll fill up even with low fees. And we don't need to worry too much about like rewards and stuff like that. So this is a potential option. Niklas Kunkel 46:41 I don't think that could work, Sam. My assess the curve fees are just completely irrelevant, like the curve liquidity is almost 100% dependent on the incentives, Cannon kind of being pointed at a pool. 46:59 Yeah, I mean, the fees can be essentially nothing. And we just like we can set the leverage as high as we want. Because like, it's the same as the PSM. Like, we could set it to like, even 1,000x, like, it'll fill up, right, we can fill it to whatever number we want, as long as we have PSM supply. Okay, there's an additional benefit here to that, you know, curve have kind of become less friendly with us. And this may be sort of a nod to them that, you know, we want to continue working together. Like, ultimately, this is just for marketing PR reasons and stuff like that. But I think it could be a good move, doesn't require much engineering effort, and could just be an easy win, in my view. Niklas Kunkel 47:45 I mean, okay, from an asset risk exposure point of view, it would almost be right, you're only as strong as the weakest asset, right? So if any single one of those gets robbed, you get robbed for the entire exposure you have to that pool. So it would, I think it would be better to even just have pa if like, if you're willing to take on risk exposure to each of those coins, then just create a PSM for each of those. And then you kind of segment out the risk, right.