Executive Vote: Enable TUSD, Reduce Stablecoin Liquidation Ratios, Other Changes

https://blog.makerdao.com/executive-vote-september-18-2020/

The Governance Facilitators and the Maker Foundation Smart Contracts Team have placed an Executive Vote into the voting system which will enable the community to approve the following alterations to the protocol.

Base Rate Increase

As per the weekly Base Rate poll the Base Rate meta-parameter will be increased from -2% to 0% if this proposal passes.

Stability Fees are calculated from the Base Rate and Risk Premiums using the formula Stability Fee = max(Base Rate + Risk Premium, 0%)Please note that a negative Base Rate does NOT imply negative Stability Fees.

Enable new TUSD Implementation

As per the non-standard weekly poll in combination with this urgent signal request, the new TUSD implementation will be whitelisted on the Maker protocol if this proposal passes. TUSD will be re-enabled with the following parameters, which are a combination of the linked poll and the linked signal request.

  • Risk Premium: 4%
  • Liquidation Ratio: 101%
  • Debt Ceiling: 50 million
  • Auction Lot Size: 50,000
  • Minimum Bid Increment: 3%
  • Bid Duration: 6 hours
  • Max Auction Duration: 6 hours
  • Liquidation Penalty: 13%
  • Dust: 100 Dai

Stability Fees are calculated from the Base Rate and Risk Premiums using the formula Stability Fee = max(Base Rate + Risk Premium, 0%).

Liquidations will be disabled for TUSD-A.

Modifiy Stablecoin Liquidation Ratios

As per the non-standard weekly poll in combination with this urgent signal request, the Liquidation Ratio parameter on TUSD-A, USDC-A, and PAX-A will be reduced from 103% to 101% if this proposal passes.

Increase USDC-A Debt Ceiling

As per this urgent signal request, the Debt Ceiling parameter on USDC-A will be increased from 200 million to 400 million if this proposal passes.

Fix Gitcoin Feed Key Replacement on MANAUSD Oracle

As per this forum thread created by the MakerDAO Oracle domain team, the gitcoin feed key will be replaced on the MANAUSD Oracle if this proposal passes.

Summary

Therefore, if this Executive proposal passes the following will occur:

TUSD Implementation Whitelisted

  • The new TUSD Implementation will be whitelisted and enabled for use in the Maker Protocol.

Liquidation Ratios

  • The USDC-A Liquidation Ratio will decrease from 103% to 101%
  • The PAXUSD-A Liquidation Ratio will decrease from 103% to 101%
  • The TUSD-A Liquidation Ratio will decrease from 120% to 101%

Debt Ceilings

  • The USDC-A Debt Ceiling will increase from 200 million to 400 million
  • The TUSD-A Debt Ceiling will increase from 2 million to 50 million
  • The Global Line parameter will increase from 948 million to 1,196 million

Stability Fees

  • The Base Rate meta-parameter will be increased from -2% to 0%
  • The TUSD-A Stability Fee will be increased from 0% to 4%
  • The USDT-A Stability Fee will be increased from 6% to 8%
  • The PAXUSD-A Stability Fee will be increased from 2% to 4%
  • The USDC-A Stability Fee will be increased from 2% to 4%
  • The USDC-B Stability Fee will be increased from 48% to 50%
  • The BAT-A Stability Fee will be increased from 2% to 4%
  • The WBTC-A Stability Fee will be increased from 2% to 4%
  • The KNC-A Stability Fee will be increased from 2% to 4%
  • The ZRX-A Stability Fee will be increased from 2% to 4%
  • The MANA-A Stability Fee will be increased from 10% to 12%

Oracles

  • The Gitcoin feed key will be replaced on the MANAUSD Oracle

The Executive Vote (FAQ) will continue until the number of votes surpasses the total in favor of the previous Executive Vote. This is a continuous approval vote.

Review

Community debate on this topic can be found on the MakerDAO governance forum. Please review the linked threads to inform your position before voting.

Additionally, these changes may have been discussed further in recent Governance calls. Video and Audio for these calls is available to review.

Action

Voting for this proposal will place your MKR in support of implementing the changes outlined above.


Resources

If you are new to voting in the Maker Protocol, please see the voter onboarding guide to learn how to use this dashboard and set up your wallet to vote.

Additional information about the Governance process can be found in the Governance Risk Framework: Governing MakerDAO

To participate in future Governance calls, please join us every Thursday at 16:00 UTC.

To add current and upcoming votes to your calendar, please see the MakerDAO Public Events Calendar.

The post Executive Vote: Enable TUSD, Reduce Stablecoin Liquidation Ratios, Other Changes appeared first on Maker Blog.

TUSD and USDC-B Approved by Maker Governance as Collateral Types in the Maker Protocol

https://blog.makerdao.com/tusd-and-usdc-b-approved-by-maker-governance-as-collateral-types-in-the-maker-protocol/

As a result of an Executive Vote that ended this morning, MKR holders have accepted TUSD (TrueUSD) and USDC-B (the USDC token with different risk parameters) as new collateral assets in the Maker Protocol. Both tokens are US Dollar-backed ERC20 stablecoins and can now be used to open Maker Vaults in order to generate Dai. 

As noted in the USDC-B proposal discussion in the Maker Forum, the purpose of this variant of USDC “is to act as an emergency credit facility during times when keeper liquidity is overwhelmed (such as busy liquidation periods with large amounts of collateral being auctioned). This is in contrast to how USDC-A is currently being utilized (primarily as a tool to arbitrage the Dai price back down to $1.00). Ideally, the USDC-B collateral type should remain unused unless there is a severe and acute liquidity issue in the Dai markets.”

Prior to the vote, the Maker community discussed the merits of adding TUSD and USDC-B, as well as the appropriate risk parameters for the tokens (listed below), in the Maker Governance Forum. In addition, the governance community considered in a public meeting what, if any, impact adding a centralized stablecoin as a collateral type to the protocol might have on users and the Decentralized Finance (DeFi) movement as a whole. 

TUSD Risk Parameters

  • Stability Fee: 0%
  • Debt Ceiling: 2,000,000
  • Liquidation Ratio: 120%
  • Auction Lot Size: 50,000 TUSD
  • Minimum Bid Increment: 3%
  • Bid Duration: 6 hours
  • Max Auction Duration: 3 days
  • Liquidation Penalty: 13%
  • Dust: 20 Dai

USDC-B Risk Parameters:

  • Stability Fee: 50%
  • Debt Ceiling: 10,000,000
  • Liquidation Ratio: 120%
  • Auction Lot Size: 50,000 USDC
  • Minimum Bid Increment: 3%
  • Bid Duration: 6 hours
  • Max Auction Duration: 3 days
  • Liquidation Penalty: 13%
  • Dust: 20 Dai

Note: Liquidations are currently disabled for all stablecoins used as collateral, and the Oracle prices for them are fixed at $1.

The flexibility of the Maker Protocol means that almost any kind of asset that can be tokenized can be added as collateral in the system, as long as it has appropriate risk parameters and is approved by Maker Governance. 

Adding TUSD and USDC-B to the list of collateral types is an exciting step. Users can now connect their wallets to Oasis Borrow and lock either type in a Maker Vault to generate Dai.

The post TUSD and USDC-B Approved by Maker Governance as Collateral Types in the Maker Protocol appeared first on The Maker Blog.

The Dai Backstop Syndicate: Decentralization at Work

https://blog.makerdao.com/the-dai-backstop-syndicate-decentralization-at-work/

The Maker Protocol is the foundation of MakerDAO’s decentralized Dai stablecoin, Vaults, Oracles, and Governance, and the decentralized finance (DeFi) ecosystem. While the dependable blockchain technology and smart contracts that underpin the Protocol are critical to the Maker community and the DeFi movement, so, too are the passionate humans with a stake in both. And never has that been more apparent and important than in the wake of recent market events

On March 12, a dramatic drop in the price of Ethereum (ETH) caused a chain of events that led to an extreme shortage of Dai, as well as a great deal of concern within the global Maker community. Within 24 hours of the ETH crash, a group that would eventually call itself the Dai Backstop Syndicate self-organized to present a possible solution and bring a community together. 

Dai Backstop Syndicate: A Possible Community-Driven Safeguard

The events of March 12 were formative for the Maker community. Across the financial world, heavy selling of almost every asset class occurred, as traders sought the safe haven of the US Dollar. This resulted in direct and indirect impacts on the Maker Protocol and the broader DeFi ecosystem, including: 

  • A rapid fall in the value of Maker Vault collateral.
  • A high degree of congestion and delays on the Ethereum network.
  • Limited access to centralized exchanges.
  • Reduced access to Dai liquidity.

Ultimately, Maker Vaults became undercollateralized by several million dollars due to the “0 bidding” strategy of two third-party Auction Keepers.

The Maker community quickly came together in the Maker Forum and on social media to discuss the events, causes, and possible solutions. On March 13, a group calling itself the Dai Backstop Syndicate organized independent of the Maker Foundation, and pledged on Twitter to be a “buyer of last resort for MKR” to eliminate the negative surplus in the Maker Protocol, if the need arose. Shortly thereafter, Brendan Forster, co-founder and CEO of Dharma, tweeted a list of committed participants.

The next day, March 14, the Maker Foundation announced that the Protocol would soon initiate a debt auction for MKR, MakerDAO’s governance token, to recapitalize the Protocol. The reasons behind—and process for—MKR debt auctions, long debated in the community, are discussed in the white paper. 

While Maker’s debt auctions are always open to all, the 50,000 Dai minimum bid is beyond the reach of some individuals. Well-capitalized institutions soon expressed interest, while the Maker community also indicated a desire to be involved. The Dai Backstop Syndicate was the answer, and formed to enable smaller participants to bid via a smart contract. As was explained on reddit, the Dai Backstop Syndicate’s goal was to “have at least 5 million DAI available to purchase MKR… . For those interested, any amount of DAI is useful to the cause and helps signal strong support for MKR.”  

Ultimately, this group would do more than offer to be the ‘buyer of last resort’ of MKR at auction; it would signal very strong support for Maker, and, most importantly, express high confidence in Dai and the DeFi ecosystem

DeFi Enthusiasts Supportive of Dai 

The Dai Backstop Syndicate didn’t launch as a commercial or trading opportunity. Rather, members of the group are “DeFi enthusiasts who believe that MakerDAO and Dai are critical infrastructure for our industry.” And though they expected the auctions to be successful without their help, the Backstop Syndicate sought to create a protective net for the Maker Protocol, akin to a community-supported insurance policy

While the auctions succeeded without any bidding from the Dai Backstop Syndicate, the organization continues in case such need should ever arise again. Today, a total of 129 organizations make up the Syndicate, led by DeFi community members from China, Italy, Argentina, the United States and elsewhere. 

Audited by Market Leaders in Blockchain Security

The core tech behind the Dai Backstop Syndicate is a smart contract used to pool contributions of Dai and then bid in the auctions at a price of 100 Dai for 1 MKR. Any amount of Dai could be contributed to receive the corresponding proportion of MKR when bids are successful.

With hundreds of thousands of dollars committed to the smart contract, security was, of course, critical.  Fortunately, blockchain security company Quantstamp volunteered to audit the Syndicate contract, as well as independently run a Keeper to help ensure a smooth auction.

“It was inspiring to see the DeFi community rally together so quickly to form a ‘buyer of last resort’ syndicate, starting with only 1 DAI,” said Richard Ma, CEO of Quantstamp, in an announcement on  April 8. “This reduced the barrier to participation and helped stabilize the ecosystem—essentially an emergent form of community governance.”

Quantstamp additionally provided a warranty via Chainproof, covering the value of the Backstop contract.

Recognizing the value of community governance, Quantstamp offered its help.

Many in the community were grateful for Quantstamp’s timely and efficient help. While nothing critical was found in the deployed contracts, some suggestions for improvements were noted for future developers. Quantstamp recommends thinking about audits as a continuous process rather than a one-time event. As the space continues to grow, they expect to see more collaborative initiatives like the backstop that can strengthen DeFi’s infrastructure and bring DeFi mainstream. 

Brief Lessons from Dai Backstop Syndicate 

The Dai Backstop Syndicate was a spontaneous and unprecedented community-driven initiative that proves grassroots and decentralized organizing can be highly effective in addressing the challenges of the sector and creating a better, more transparent financial system. Importantly, it also helps foster confidence in DeFi and Maker’s drive towards complete decentralization

To learn more about Dai and the Maker Protocol, read the whitepaper, and then join the discussions in the Maker Forum and on the Maker Rocketchat channel.

The post The Dai Backstop Syndicate: Decentralization at Work appeared first on The Maker Blog.

Executive Vote: Change the Stability Fee Structure and Raise the USDC Stability Fee

https://blog.makerdao.com/executive-vote-may-22-2020/

The Maker Foundation Interim Governance Facilitator has placed an Executive Vote into the voting system, which will enable the community to approve the following alterations to the protocol:

The Executive Vote (FAQ) will continue until the number of votes surpass the total in favor of the previous Executive Vote. This is a continuous approval vote.

Review

These changes were discussed in the Governance call on Thursday, May 21. Please review the VideoAudio, and the online discussion to inform your position before voting.

The MakerDAO community is moving forward with an Executive Vote to determine whether it will enact the changes established by the previous Governance Polls.

Action

Voting for this proposal will place your MKR in support of implementing the changes outlined above.


Resources

Additional information about the Governance process can be found in the Governance Risk Framework: Governing MakerDAO

Demos, help and instructional material for the Governance Dashboard can be found at Awesome MakerDAO.

To participate in future Governance calls, please join us every Thursday at 16:00 UTC.

To add current and upcoming votes to your calendar, please see the MakerDAO Public Events Calendar.

The post Executive Vote: Change the Stability Fee Structure and Raise the USDC Stability Fee appeared first on The Maker Blog.

Governance Polls: Adjustments to Dai Stability Fee, USDC Stability Fee, WBTC Stability Fee, and more

https://blog.makerdao.com/governance-polls-may-18-2020/

The Maker Foundation Interim Risk Team has placed a series of Governance Polls into the voting system which presents adjustments to the Dai Stability FeeUSDC Stability FeeWBTC Stability Feea Governance Poll for Core Personnel Onboarding, and a poll to change stability fee structure.

Poll: Dai Stability Fee Adjustment

The Maker Foundation Interim Risk Team has placed a Governance Poll into the voting system which presents a number of possible Dai Stability Fee options. Voters are now able to signal their support for a Dai Stability Fee within a range of 0% to 4.5%.

This Governance Poll (FAQ) will be active for three days beginning on Monday, May 18 at 4 PM UTC, the results of which may inform an Executive Vote which will go live on Friday, May 22, at 4 PM UTC.

Review

The Dai Stability Fee was discussed in the Governance call on Thursday, May 7. Please review the VideoAudioSummary and the online discussion to inform your position before voting.

Next Steps

  • On the Friday following the conclusion of the poll, there will be an Executive Vote asking MKR token holders if they support or reject the change proposed by this Governance Poll.

Poll: USDC Stability Fee Adjustment

The Maker Foundation Interim Risk Team has placed a Governance Poll into the voting system which presents a number of possible USDC Stability Fee options. Voters are now able to signal their support for a USDC Stability Fee within a range of 0% to 4.5%.

This Governance Poll (FAQ) will be active for three days beginning on Monday, May 18 at 4 PM UTC, the results of which may inform an Executive Vote which will go live on Friday, May 22, at 4 PM UTC.

Review

The USDC Stability Fee was discussed in the Governance call on Thursday, May 7. Please review the VideoAudioSummary and the online discussion to inform your position before voting.

Next Steps

  • On the Friday following the conclusion of the poll, there will be an Executive Vote asking MKR token holders if they support or reject the change proposed by this Governance Poll.

Poll: WBTC Stability Fee Adjustment

The Maker Foundation Interim Risk Team has placed a Governance Poll into the voting system which presents a number of possible WTBC Stability Fee options. Voters are now able to signal their support for a WTBC Stability Fee within a range of 0% to 5%.

This Governance Poll (FAQ) will be active for three days beginning on Monday, May 18 at 4 PM UTC, the results of which may inform an Executive Vote which will go live on Friday, May 22, at 4 PM UTC.

Review

The WBTC Stability Fee was discussed in the Governance call on Thursday, May 7. Please review the VideoAudioSummary and the online discussion to inform your position before voting.

Next Steps

  • On the Friday following the conclusion of the poll, there will be an Executive Vote asking MKR token holders if they support or reject the change proposed by this Governance Poll.

Governance Poll for Core Personnel Onboarding (Governance Facilitator)

Today, on May 18, the Maker Community will vote to determine whether the subproposal to add @LongForWisdom as a Governance Facilitator should proceed to the final Executive Vote next week.

Review

The proposal to add @LongForWisdom as a Governance Facilitator can be reviewed here: MIP0c12-SP2: Subproposal for Core Personnel Onboarding (Governance Facilitator).

Next Steps

MKR holders must vote to determine whether to accept or reject the proposal at hand in the Governance Poll, determining whether to proceed to the final ratification vote (Executive Vote) in the last week of the monthly Governance Cycle. The Executive Vote is submitted if the Governance Facilitator confirms the ‘yes’ outcome of the Governance Poll.

Change the Stability Fee Structure

The Maker Foundation Interim Governance Facilitator has placed a Governance Poll into the voting system which the community can use to signal their support for changing the structure of the weekly Stability Fee votes.

This Governance Poll (FAQ) will be active for three days beginning on Monday, May 18 at 16:00 UTC.

Review

This proposal was discussed in the forums. Please review to inform your position before voting.

A summary of the proposed changes:

  1. Replace all weekly Stability Fee votes with a single, global Base Rate vote.
  2. The individual Stability Fee parameters will be calculated by the formula Stability Fee = max(Base Rate + Risk Premium, 0%).
  3. The Base Rate will be initialized to 0%. The Risk Premium of each collateral will be initialized to its Stability Fee.
  4. The Risk Premium of any collateral type can be adjusted by initiating a governance poll.
  5. The lowest value of Base Rate will either be 0% or no lower bound depending on the result of this poll. The implications of this are discussed in the thread.
  6. The Dai Savings Rate Spread calculation will use the Base Rate to determine the Dai Savings Rate value in the same way it is currently offset from the Dai Stability Fee.

Next Steps

  • If this proposal passes, the changes listed in Review will be made starting the week of May 25th, 2020.

Resources

Additional information about the Governance process can be found in the Governance Risk Framework: Governing MakerDAO

Demos, help and instructional material for the Governance Dashboard can be found at Awesome MakerDAO.

To participate in future Governance calls, please join us every Thursday at 16:00 UTC.

To add current and upcoming votes to your calendar, please see the MakerDAO Public Events Calendar.

The post Governance Polls: Adjustments to Dai Stability Fee, USDC Stability Fee, WBTC Stability Fee, and more appeared first on The Maker Blog.

How and Why to Self-Integrate Dai into Decentralized Apps

https://blog.makerdao.com/how-and-why-to-self-integrate-dai-into-decentralized-apps/

As the most used cryptocurrency in the decentralized finance (DeFi) space, the Dai stablecoin has been integrated into an entire ecosystem of projects. Behind Dai is the Maker Protocol, an arrangement of smart contracts built on the Ethereum blockchain. The Protocol is the infrastructure for the decentralized, self-governed MakerDAO. Currently, over 600 projects have integrated Dai into their apps, many without Maker’s help. As the DeFi movement continues to gain traction, and as users learn the ease of self-integrating Dai into their products and services, that number will grow. 

Why Integrate Dai Into Decentralized Apps?

Dai fits the ethos of many blockchain projects: it’s decentralized, open-source, composable, and more. 

Dai Is Decentralized, Governed by the Maker Community

The Dai stablecoin is generated and controlled by users, not a central party. Anyone, anywhere can generate Dai by depositing collateral into a Maker Vault or buy Dai on an exchange, and then use the token in a number of ways, including for repayment of debt, cross-border transactions, payment for goods and services, and to earn the Dai Savings Rate (DSR) on the Dai they hold.

Dai is Open-source and Easy to Integrate

Dai code is open-source—free and available to all. “No one needs permission or assistance to integrate Dai into their dapps,” says Greg Diprisco, Head of Business Development at the Maker Foundation. “If you’re a smart contract developer, integration is very easy. For entrepreneurs who are not developers, it can be more complex, which is why Maker provides a wide range of developer guides on its Github pages, as well as more user-friendly documentation and tutorials.”* 

Composability Enables Rapid Innovation and Bottom-up Growth

The Maker Protocol yields composability, a feature of its design wherein the various components of the system can be easily connected to form any number of satisfying results. Think of composability like Lego blocks that allow developers to build on Maker to create new dapps on top of existing dapps quickly. Thanks to composability, developers can integrate Dai and other Maker Protocol features, including the Dai Savings Rate (DSR), which lets users earn on their Dai holdings. The more integrations there are, the more engaged the Maker community becomes and the more DAI liquidity grows.

Dai Integration can Provide a Unit of Account and a Shared Economy

As a decentralized digital asset soft-pegged to the US Dollar, Dai is often used as the unit of account in a dapp. For example, Augur will integrate Dai as part of its system overhaul launching in June. A predictive market dapp built on Ethereum, Augur provides a way for people to place bets on all sorts of events. 

For some projects, including those part of the Dai Gaming Initiative, Dai integration provides a shared infrastructure that might not have existed previously. “When you integrate Dai into a blockchain game application, such as Forgotten Artifacts, you’re not just integrating a currency, you’re integrating an entire economy,” says Diprisco. “Some game developers create parallel digital universes. While they’d like to have an in-game economy, it’s a very complicated undertaking. It would be like if the U.S. economy was limited to simply passing dollar bills back and forth,” he explains, “with no banks, investments, no markets outside of simple exchanges of goods. But by using Dai, they get the entire DeFi ecosystem, which provides a shared economy to plug into.”

Dai is integrated into the popular game Forgotten Artifacts (Video created by Simon Kertonegro, CEO of Reeward.io.) 

Start integrating Dai

To integrate Dai into their projects, developers and others can refer to Maker’s Dai Token Guide on Github. Additional resources on the page will help developers gain a better understanding of the Dai token contract and its functionality before tackling the integration process. 

Guides for integrating other features of the Maker Protocol, including the Dai Savings Rate, into applications for a broader range of use cases are available on Maker’s Github Library.

Finally, in addition to sourcing Maker’s Github documentation, developers can use the  Dai JavaScript Library (dai.js) to integrate Maker technology into their JavaScript-compatible front end web pages.

Maker provides user-friendly documentation and tutorials, as well as a wide range of developer guides on its Github pages.

How Dai Integration Helps Expand the DeFi Ecosystem

Like money in general, Dai’s usefulness depends on wide distribution. “Global acceptance of Dai is a necessity,” says Diprisco. “Global acceptance means taking baby steps and allowing the ecosystem to continue to grow with more partners and use cases.”

As Dai use cases and benefits increase, so, too, does user confidence, which contributes to Dai integration, adoption, and growth. This concept is known as Network Effect. The more projects that integrate Dai, the more people are exposed to it, and the more it’s valued. In addition, the dapps that integrate Dai pave the way for the other layers of solutions, providing end users more options and variety. 

By sourcing Maker’s developer documentation and tutorials, anyone can harness Dai in their projects with no (or very little) help from Maker. To learn more about self-integrating Dai, check out Maker’s Developer Library and the Maker Ecosystem page

* Some Maker documentation includes old terminology (e.g., Collateralized Debt Position, or CDP, instead of Maker Vault). New terminology was introduced in November 2019. Learn more here.

The post How and Why to Self-Integrate Dai into Decentralized Apps appeared first on The Maker Blog.

Composable Infrastructure as Code: An Introduction to the Maker DeFi Ecosystem

https://blog.makerdao.com/composable-infrastructure-as-code-an-introduction-to-the-maker-defi-ecosystem/

Composability is a feature of design wherein the various components of a system can be easily connected to form any number of satisfying results. Beautiful examples of composable infrastructure as code in software design are seen in Dai-integrated Decentralized Finance (DeFi) blockchain applications. The Lego-like building blocks of the Maker Protocol allow developers to quickly and easily construct financial solutions that offer the benefits of Dai, Maker’s decentralized stablecoin, to their users. By taking advantage of Maker’s Github library of open-source code, DeFi components can be used over and over or reconfigured as building blocks for further innovation. 

The Benefits of Lego-like Composability to DeFi

Composability enables rapid iteration of products, which provides bottom-up growth. For composable platforms like the Maker Protocol, which allows users to generate Dai against collateral, and more, it’s all about the expansion of an open system and the power of network effect. Thanks to the use of the ERC20 token standard, any other ERC20 token can interact with Dai, allowing easy interoperability. Once a project is built on the Protocol, it becomes part of the Maker Ecosystem of dapps that offer a variety of products and services to DeFi consumers around the world. 

The Lego analogy is often used to help explain composable infrastructure as code because most people are not only familiar with Lego products, but can also fondly recall their own creations. Like a child with boundless imagination and a new Lego set, a talented developer with Maker’s DeFi building blocks can create original financial solutions.

To understand why composability is such a big deal, and why it enables rapid innovation, consider the attributes that allow Lego to inspire so many:

  • Common standards. A clear and rigid framework for Lego manufacturing means that every Lego piece works together. Moreover, all new pieces are always compatible with existing ones— a user can plug any piece into another piece. That compatibility underpins quick and easy composability. 
  • Shared user base. Lego pieces are, in a way, ‘open source.’ Since everyone uses the same product with the same standards, sharing knowledge and providing access to each other’s creations is easy.
  • Vibrant markets. There’s a thriving second-hand market for Lego pieces, because one person’s piece can add a lot of value to another person’s creation. 

The characteristics that enable the composability of Lego are also true for the composability of the Maker Protocol. That’s allowed developers to build on Maker—create new dapps on top of existing dapps. In turn, that helps build a more engaged community and provides greater liquidity for shared tokens like Dai.

Composability means that developers can build on the Maker Protocol to create new dapps.

Maker as the Infrastructure for DeFi

The open-source nature of the blockchain makes sharing DeFi building blocks and users the default position, with mutual benefits for developers and users alike. Aside from enabling access and fostering transparency and trust, Maker’s open-source technology means that every DeFi application built on top of the Maker Protocol by one developer can be built upon by other developers. This not only allows for the creation of more decentralized applications, but also for exponential growth of the user base. 

This ‘growth from a hub’ effect can be compared to a popular independent cafe on a bustling city street. The smart proprietor of that cafe not only benefits from the area’s foot traffic, but also buys supplies from the nearby supermarket, exhibits and earns a commission on paintings borrowed from the art gallery across the road, and features local musicians, who use the cafe’s stage to grow their audiences. The more reasons customers have to visit the cafe, the more attractive a center it becomes for new customers and even other businesses. With composability, everyone benefits from a virtuous cycle.

Community-made dapps for gaming in the Maker ecosystem.

The Maker Dapp “Store”

As noted earlier, the Maker Protocol enables users to generate the Dai stablecoin against collateral. But the entire Maker ecosystem has much more to offer. Maker’s ecosystem page, which features dapps created by the Maker Foundation and the community, is like an app store for Maker and Dai enthusiasts in which all the code is free. Here are just a few of the DeFi and other dapps you’ll find there:

  • Oasis.app, which includes Oasis Save (the hub through which users can earn on the Dai they hold via the Dai Savings Rate), Oasis Borrow (where users can generate Dai against collateral); and the Oasis Trade marketplace.
  • Chai.Money, a wrapper that allows Dai holders to earn the DSR on their Dai and trade and transfer those funds at the same time.
  • 1inch, a decentralized exchange Aggregator that offers access to multiple sets of order books.
  • Compound, a protocol that allows users to earn returns or borrow assets against Dai and other collateral. 
  • OKEx, a marketplace that brings the DSR to its millions of users in Asia.
  • PundiX, a blockchain-based, Dai-integrated point-of-sale solution.

Discover many more dapps on the Maker ecosystem page.

“Open For Business”

The composability and popularity of the Maker Protocol are helping the rapidly growing DeFi movement bring many changes to the financial services sector. The benefits of digital currency are coming to light for more and more people around the world, telling them that DeFi is open for business.

To learn all about building on the Maker Protocol, dig into MakerDAO’s developer documentation. Users can find out more about existing dapps and services that support Dai on the Maker ecosystem page

The post Composable Infrastructure as Code: An Introduction to the Maker DeFi Ecosystem appeared first on The Maker Blog.

Executive Vote: Adjust Multiple Risk Parameters

https://blog.makerdao.com/executive-vote-march-20-2020/

The Maker Foundation Interim Governance Facilitator has placed an Executive Vote into the voting system, which will enable the community to approve the following alteration to the protocol:

The Executive Vote (FAQ) will continue until the number of votes surpass the total in favor of the previous Executive Vote. This is a continuous approval vote.

Review

This change was discussed in the Governance call on Thursday, March 12. Please review the VideoAudio, and the online discussion to inform your position before voting.

The MakerDAO community is moving forward with an Executive Vote to determine whether it will enact the changes established by the previous Governance Polls.

Action

Voting for this proposal will place your MKR in support of implementing the rate changes outlined above.


Resources

Additional information about the Governance process can be found in the Governance Risk Framework: Governing MakerDAO

Demos, help and instructional material for the Governance Dashboard can be found at Awesome MakerDAO.

To participate in future Governance calls, please join us every Thursday at 16:00 UTC.

To add current and upcoming votes to your calendar, please see the MakerDAO Public Events Calendar.

The post Executive Vote: Adjust Multiple Risk Parameters appeared first on The Maker Blog.

USDC Approved by Maker Governance as the Third Collateral Type of the Maker Protocol

https://blog.makerdao.com/usdc-approved-by-maker-governance-as-the-third-collateral-type-of-the-maker-protocol/

As a result of an Executive Vote held this afternoon, MKR holders have accepted USDC as a new collateral asset in the Maker Protocol. USDC, a stablecoin backed by the US Dollar, is the third collateral type approved by Maker Governance. Joining ETH and BAT, USDC can now be used to open Maker Vaults in order to generate Dai.  

Prior to the vote, the Maker community discussed the merits of adding USDC, as well as the appropriate risk parameters for the token (listed below), in the Maker Governance Forum. In addition, the governance community considered in a public meeting what, if any, impact adding a centralized stablecoin as a collateral type to the protocol might have on users and the Decentralized Finance (DeFi) movement as a whole. Watch the recording of that meeting.  

The governance community also debated the atypical timing of the vote, ultimately determining that by adding USDC swiftly, Dai price instability and the ongoing liquidity issues that have resulted from recent market volatility might be addressed. Importantly, the increase in Dai liquidity provided by USDC should benefit Keepers taking part in both FLIP and FLOP auctions

USDC Risk Parameters:

  • Stability fee: 20% (annually)
  • Collateralization ratio: 125%
  • Debt ceiling: 20 million
  • Liquidation penalty: 13%
  • Collateral auction lot size:: 50,000 USDC
  • Collateral auction minimum price change:: 3%
  • Collateral auction bid challenge window: 6 hours
  • Collateral auction maximum duration:: 3 days
  • Dust: 20 (Dai)

Note: Liquidations are currently disabled for USDC, and the Oracle price has been fixed at $1. 

The flexibility of the Maker Protocol means that almost any kind of asset that can be tokenized can be added as collateral in the system, as long as it has appropriate risk parameters and it is approved by Maker Governance. It’s exciting to add USDC to the list of collateral types, and we welcome users to lock up their USDC to generate Dai after connecting their wallet to Oasis Borrow.

The post USDC Approved by Maker Governance as the Third Collateral Type of the Maker Protocol appeared first on The Maker Blog.

Executive Vote: Adjust Risk Parameters, Governance Security Module and Liquidation Freeze Module

https://blog.makerdao.com/immediate-executive-vote-march-15/

The Maker Foundation Interim Governance Facilitator has placed an Executive Vote into the voting system, which will enable the community to approve the following alteration to the protocol:

  • Lower the Dai Stability Fee from 4% to 0.5%
  • Increase the Dai Savings Rate Spread to 0.5%
    • Note: This will set the Dai Savings Rate to 0%
  • Lower the SCD debt ceiling 5M to 20M
  • Reduce the Governance Security Module delay from 24 hours to 4 hours
  • Activate the Liquidation Freeze Module

The Executive Vote (FAQ) will continue until the number of votes surpass the total in favor of the previous Executive Vote. This is a continuous approval vote.

Review

As detailed in this forum post, the Protocol needs additional protection to strengthen itself in light of a system-wide Dai shortage and to protect itself against another potential ETH price crash in this very volatile market.

The rationale for holding this vote outside of the traditional weekly cycle is discussed in detail in the forum post above. Please join the ongoing discussion at forum.makerdao.com and review the discussion to inform your position before voting.

Action

Voting for this proposal will place your MKR in support of implementing the parameter changes outlined above.


Resources

Additional information about the Governance process can be found in the Governance Risk Framework: Governing MakerDAO

Demos, help and instructional material for the Governance Dashboard can be found at Awesome MakerDAO.

To participate in future Governance calls, please join us every Thursday at 17:00 UTC.

To add current and upcoming votes to your calendar, please see the MakerDAO Public Events Calendar.

The post Executive Vote: Adjust Risk Parameters, Governance Security Module and Liquidation Freeze Module appeared first on The Maker Blog.

Recent Market Activity and Next Steps

https://blog.makerdao.com/recent-market-activity-and-next-steps/

Summary:

On March 12, ETH saw a dramatic drop in price, losing 30% value in approximately 24 hours. This, plus a rapid increase in gas prices put stress on the Maker Protocol, the community, the Maker Foundation, and the Ethereum DeFi ecosystem as a whole. 

These circumstances allowed some Keepers to bid close to 0 Dai for batches of 50 ETH collateral. With $4.5M in liquidations, there was an opportunity for numerous Keepers to participate in auctions and keep the system stable. Keepers play a critical role in maintaining the health of the system and Dai stability; both MakerDAO and the Maker Foundation hope to see more Keepers enter the system, and participate, in the future. Such a development would increase the health and function of the Protocol.

Oracles

During the ETH price crash, a Maker oracle was slow to provide the most current price. While this was unintentional, it had the knock-on effect of actually helping Maker Vaults remain overcollateralized, giving some users enough time to add collateral to avoid liquidation. However, the specifics regarding the issue of the price feed delay itself are still under investigation and will be shared and addressed as soon as possible. 

Next Steps: Adjust Parameters  

The current state of the Maker Protocol is healthy. However, while there was no hack, no bug, and no Emergency Shutdown planned, modifications need to be made. Accordingly, the MakerDAO community will hold an executive vote on Friday, March 13, to adjust parameters to help ensure a similar situation doesn’t happen again. Details of the proposed adjustments are below, with a focus on auction parameters and restoring the Dai peg closer to 1 USD. 

Re-collateralization

Per the whitepaper, the Protocol will mint and sell MKR to re-collateralize the system:

If the Collateral Auction does not raise enough Dai to cover the Vault’s outstanding obligation, the deficit is converted into Protocol debt. Protocol debt is covered by the Dai in the Maker Buffer. If there is not enough Dai in the Buffer, the Protocol triggers a Debt Auction. During a Debt Auction, MKR is minted by the system (increasing the amount of MKR in circulation), and then sold to bidders for Dai.

Our Resilience Was Tested

Today’s activities tested the Maker Protocol and the people who use and support it. The community successfully navigated a brutal storm of external realities, which included rapid devaluation of collateral and a spike in gas prices. The events ultimately showcase the critical importance of an entire community coming together to monitor and protect the system as it decentralizes. 

The community and the Maker Foundation came together today to monitor, assess, and address the situation as it was unfolding. Thank you all for reaffirming your passion for Maker and the stability of the Protocol. Together, MakerDAO, the Maker Foundation and the community as a whole we will continue to monitor the health of the Maker Protocol and the Ethereum ecosystem. 

Additional Resources

The forum discussion on parameter changes can be found here

The proposed changes can be found below. MKR holders can vote tomorrow, March 13. 

As per the existing winning polls:

  • Sai Stability Fee: 9.5% => 7.5%
  • Dai stability Fee: 8% => 4% (applies to ETH and BAT)
  • Dai Saving Rates Spread = 0
    • Therefore DSR of 8% => 4%
  • GSM for SCD is getting activated
  • Migration contract debt ceiling: 30M => 10M
  • SCD debt ceiling: 30M => 25M
  • MCD Eth debt ceiling: 150M => 110M
  • Global MCD debt ceiling: 125M
  • Additional parameters:
    • Flip auction TTL: 10 minutes => 3 hours
    • Flip auction lot size: 50 ETH => 500 ETH
    • Flip auction maximum duration: 3 days => 1 day
    • Flop auction TTL: 10 minutes => 3 hours

The change in the TTL for the flip and flop auction parameters are designed to give keepers any additional time needed to overcome network issues such as the ones seen this morning. The increase in lot size will also lower the amount of auctions (and, thus, transactions) that will need to take place. A significantly lengthened TTL means that the auctions are likely to reach the maximum duration. A lower maximum duration would help counteract long auctions.

These options will allow the community to reduce the impact of an additional market downturn while it has the opportunity to continue to debate further, more refined solutions, in the coming weeks.

The post Recent Market Activity and Next Steps appeared first on The Maker Blog.

Let’s Play: Introducing Maker’s Dai Gaming Initiative

https://blog.makerdao.com/dai-gaming-initiative/

Today, the Maker Foundation announces a move into video gaming through the new Dai Gaming Initiative, a targeted approach to helping Dai reach critical mass in the global economy.

Stake in the Game(s)

Confidence in Dai is high, and the momentum behind the Maker Protocol has only increased since the release of Multi-Collateral Dai (MCD) in November. Dai’s stability, composability, and permissionless nature has helped it become the most used cryptocurrency in the DeFi space. The stablecoin is earning great media exposure and drawing impressive partnerships, and it continues to be supported by the best community in the crypto space. Between the value Dai brings to DeFi and the new opportunities that the Dai Savings Rate (DSR) offers individuals, startups, and established businesses to earn a return on their DAI holdings, the passion for it is palpable.  

For the same reasons Dai is a perfect fit for the DeFi movement, the stablecoin is outstanding for blockchain and traditional game economies. Its stability and versatility will help both thrive.

With the ever-increasing popularity of games using in-game currencies, game developers have had to contend with significant limitations when building in-game economies. While they’ve enjoyed the freedom to create exciting adventures and alternate worlds for players, they’ve been forced to work within an inflexible financial system that is simply not built to cooperate with the limitless human imagination. Many of the most popular traditional games have their own currencies that players use to buy virtual goods and more—Fortnite’s V-buck being a good example. And that works if simple transactions are sufficient for your ecosystem. But what if your in-game economy requires greater depth?

Enter Dai. 

Why Dai Is Best for Game Economies

The Dai stablecoin is decentralized—meaning that it is a currency created by users and not issued or controlled by any third-party (like a central government or bank). Put simply, when you hold Dai, you alone control your money. There are no limitations to Dai’s potential for in-game economies. 

More and more game developers are discovering the power of Dai and integrating it into their games. A much-needed plug-and-play financial ecosystem for video games, Dai allows value to grow organically with user engagement in the following ways: 

  • Dai is programmable money that’s not impeded by middlemen. Developers can create complex financial mechanisms that don’t require financial intermediaries and signatures on hoards of documents.
  • The Dai stablecoin is a widely used currency, which makes it perfect for ever-growing game movements, such as Play2Earn.
  • With meta-transactions, players can transact, spend, and earn Dai while keeping the value in the native token of the game. 
  • Dai offers a real parameter of value because it’s pegged to the US Dollar. Soft currencies in video games don’t always feel authentic. Like flight miles or credit card points, a soft currency’s unit of account isn’t always relative to the value of an actual currency. With Dai, players know exactly how much their game skills are worth. As a result, they play with more passion, more often.  
  • Dai brings a robust ecosystem of 500+ live integrations, including DeFi, fiat-gateways, and marketplace projects that allow developers to create heightened game experiences without having to build everything from scratch. 

Leading Examples of Dai Integration in Games 

The games described below exemplify how with originality, innovation, and boldness, game developers are changing the landscape with Dai.

Axie Infinity: In the Axie Infinity digital-pet universe, players breed, raise, battle, collect, and exchange fantasy creatures called Axies. Similar to trading cards, Axies are assets that players own. The game offers tournaments/ranked league gameplay with a “mini” version of Dai that players of PvP games can find randomly. Dai can be used for Axie and land sales. Additionally, there is a Dai-branded NFT inside the game that is awarded to any player who completes the task of opening a Maker Vault with an Axie address.   

As part of the Dai Gaming Initiative, Axie Infinity features a "mini" version of Dai that players of PvP games can find randomly.
Acquire, collect, and exchange Axies in a fun, unique digital-pet universe.

Forgotten Artifacts: Players set out on dangerous adventures to find artifacts hidden all over the universe. DAInerys Vaultborn, a brand new Dai-branded NFT and worthy companion, helps players navigate as they search for the treasures and fight to protect their assets.  

The items in Forgotten Artifacts are digital goods and unique collectibles (a mixture of fungible and non-fungible tokens). The supply of items are limited, giving players the confidence that the collectible NFTs they hold are truly rare and will never be replicated.

Video created by Simon Kertonegro, CEO of Reeward.io

Additionally, players own the DAInerys NFT. So, as a dragon of Kriptomat and a powerful creature in the Enjin multiverse, DAInerys can accompany them through multiple games and exert her power in different ways.  

The Dai Gaming Initiative introduces DAInerys Vaultborn, a brand new Dai-branded NFT, to players of Forgotten Artifacts and other games.
DAInerys Vaultborn, a brand new Dai-branded NFT, in Forgotten Artifacts. 

Crypto Wars: CryptoWars, created by Experimental, is a decentralized game of strategy that runs completely on smart contracts. Players create and personalize villages, join alliances, build armies, and go to war with their enemies to gain control of kingdoms. All NFTs they acquire are their private property, thanks to the Ethereum blockchain. Experimental, based in Argentina, was the first gaming studio in the world to host a live blockchain game tournament.

Highlights of the Dai Gaming Initiative include Dai-exclusive NFTs offered in the Cryptowars marketplace.
Dai-exclusive NFTs offered in the Cryptowars marketplace boost player gaming experiences.

Marble Cards: In this Ethereum-based, community-driven game, any unique URL (web page content, gif, jpg, etc.) can be “marbled” into a collectible card—but only once. The cards are organized into Collections and players vote on the cards they collect to measure their social value. Plans include the acceptance of Dai in the marketplace and a battle arena dedicated to Maker content. Players will also be able to tokenize URLs representing Maker memes, blog posts, and more, and then compete to get the most votes. One player has already created an NFT of the Maker codebase on GitHub.

The Dai Gaming Initiative features Marble Cards, a game that will accept Dai in its marketplace.
Marble card #44990, an NFT of the Maker codebase on GitHub.

SkyWeaver: A competitive trading-card game, SkyWeaver allows players to craft their card decks without charge. Each card has its own specialties. Players can win cards and purchase more in distinctive categories with native game currency that’s wrapped in Dai. Despite the emphasis on trading and a marketplace, SkyWeaver is also highly accessible, with a lower skill floor so anyone can start playing right away. Dai integration is currently on testnet; the game will launch on mainnet in the near future.  

Sandbox: Sandbox will be a virtual world in which individual players and companies create content and experiences for others. The Sandbox world will include Dai City, a large plot of land that community members will build upon for Dai bounties. Dai City will be ever-changing and offer different activities and community-related events.

An upcoming feature of the Dai Gaming Initiative is the Sandbox world’s Dai City, a large plot of land that community members will build upon for Dai bounties.
A rendering of the future Sandbox world that includes Dai City. 

Other Games that Accept Dai

Gaming SDKs

How the Traditional Gaming Space Can Benefit from Dai

Legacy games will need to more carefully balance incentives with player behaviors. So, it seems inevitable that their ecosystems will require a greater level of economic complexity. Games have evolved from relatively simple states of existence to robust universes with many of the intricate social structures we see in the real world. Some games have even developed full corporations, with HR, Accounting, and IT departments, and more. Dai is ready and waiting to facilitate a deeper level of economic activity in the new worlds of traditional games as well as blockchain games.

The Dai Gaming Initiative Bounty Program

One of the most exciting aspects of the Dai Gaming Initiative is its Bounty Program*, which incentivizes game developers to build using Dai for rewards. Are you up for the challenges? Here they are:

One of the most exciting aspects of the Dai Gaming Initiative is its Bounty Program.

Developers, think about how you can earn rewards for creating amazing gaming experiences. Submit your bounty applications to bd@makerdao.com, with the subject line DAI GAMING BOUNTY APP. Remember to indicate the specific bounty for which you’re applying.

Discover the Power of Dai Now

Dai’s stability and versatility help to power gaming in much the same way it powers DeFi. Developers are free to design with no constraints, and players can use Dai in the in-game economies of multiple game worlds. Begin to explore Dai today by playing the games listed and described above. 

To learn more about Dai, visit the Maker blog and join the conversations in the Maker Forum


*The Dai Gaming Initiative Bounty Program (“Bounty Program”) is open to any participant, excluding employees of the Maker Foundation and its respective parent companies, subsidiaries, and/or affiliates (collectively “Maker”). Maker will determine the winners for the Bounty Program and is under no legal obligation to determine a winner for any individual Bounty Program. The Bounty Program is subject to all applicable federal, provincial, state and local laws and is void where prohibited by law

The post Let’s Play: Introducing Maker’s Dai Gaming Initiative appeared first on The Maker Blog.