Composable Recap returns…
After an extended pause during the holiday season, the Composable Recap of MakerDAO governance activity is back with another issue.
Just because the governance pause prohibits executives and polls during the Christmas season, it doesn’t mean that the teams have been asleep at the wheel.
Rune Christensen, co-founder and driving force behind the Endgame Plan has been prolific and released another Endgame MIP, bundling changes to every scope and the Atlas.
The sweeping MIP reduced the number of prime and reserve delegates to four each, and the number of compensated AVC member slots to 8. Competition is a good thing, especially for delegates, who receive about $1M worth of MKR in compensation per year, at current prices.
AVC members get ranked by holding of MKR. In some ways, it seems sensible, because MKR holdings signify a conviction and dedication to the protocol. In other ways this could lead to well-endowed AVC members who perform little work, but still get compensated. We will see how it turns out.
Spark Lend has been going from strength to strength, and maxxed out the available DAI loaning facilities in rapid succession. Governance polls have made sure the first subDAO’s growth can continue unhampered and increased the funds available by another $400m to $1,2bn DAI.
The quality of contributions and research to MakerDAO decisions is remarkable throughout. BA Labs, MakerDAO’s risk management faciliator, has published guidelines for stability fees that are a sight to behold:
If you hold a PhD in economics and want to contribute, please read this scholastic masterpiece. As a humble AVC member we only have the ability to verify the base assumptions, which seem sound.
Another great team, PullUp, released their report on development activity, which allows us to take a peek under the hood of what it takes to keep the machine going.
And last but not least, we want to point out the call recording of Powerhouse Ecosystem Actors.
Well worth the watch. The team has been developing a trove of dashboards to make monitoring of the DAO easy.
DAI supply update
DAI supply has reduced by ~200m since our last newsletter. We would love to see some research into the root causes. With stable coins the driving force for this number is demand. Leverage mostly get’s swapped out directly and doesn’t move the needle.
sDAI is a great too to drive demand, but the current rate doesn’t seem to move people off of USDC, UDST, USDM or other stables. Binance offers up to 11% variable APY on USDT with daily withdrawals on their platform, for example.
Maybe Maker can find other, more institutional ways, to boost demand for those that aim to hold $DAI.
Voting update
We want to point out two polls. Four are there for your consideration, currently. Including the MIP authored by Rune.
One is the increase of the WBTC cap on SparkLend. The facilities are maxxed out, and with a Bitcoin ETF finally approved, the demand and activity around the “orange coin” are at an all-time-high.
The second one is using a $1 fixed oracle price for USDC and USDT on SparkLend.
From a game-theory perspective, it will be fascinating to think about what would happen in the case of a depeg of these coins. We could see a considerable amount of arbitrage as traders could buy dollars for cents on the market and then lend out other collateral….
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All pictures are Bing Image Creator.
