MakerDAO Community, 27 Apr 2021

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From YouTube: Community Call April 27th, 2021: Let's Talk About B.Protocol

Description

Special Guests

B.Protocol | Yaron Velner

Topics

What is BProtocol?
The state of B.Protocol.
Handing off governance to the community.
Declaration of Intent for experimental integration.
Compatibility of B.Protocol with the new liquidation system upgrade.
Misc Q&A

Tuesday at 9AM PST | 10AM MST | 12PM EST | 4PM UTC | 6PM CET

Google Calendar Link:
https://calendar.google.com/calendar/embed?src=makerdao.com_3efhm2ghipksegl009ktniomdk@group.calendar.google.com&ctz=America/Los_Angeles

Weekly Maker Relay:
https://forum.makerdao.com/tag/maker-relay

If you're curious to learn more about MakerDAO explore some of the resources below:

Technical Documentation: https://docs.makerdao.com/
Community Portal: https://community-development.makerdao.com/
Governance Forum: https://forum.makerdao.com/
Website: https://makerdao.com
Twitter: https://twitter.com/makerdao
Reddit: https://www.reddit.com/r/MakerDAO/
Chat: https://chat.makerdao.com/home

A

Okay, yeah yeah. You should be able to share your screen uh just scroll over your face and a little toggle uh share button should come on, but hey everybody welcome to the maker dao uh community call. My name is david utrobin. I have the the pleasure of hosting these I've been hosting them for a couple of years now uh and so yeah welcome.

A

uh We used to cover the weekend maker, but since uh I guess maybe three or four months ago, we've prioritized having really interesting guests on the call that uh are building either alongside maker dow using dye or are some you know, part of this whole crypto ecosystem that we've been building uh and b protocol is no stranger to this call.

A

We actually had yaron uh and eaton uh uh both on the call back in october, when b protocol was just launching and since then b protocol has operated for a while and it's, and it is also going through its own decentralization, like transformation right now right I saw I saw actually today on twitter that uh there is a genesis. Vote going, live for, b, protocol to tokenize governance, but we'll get into all of that. uh I want to introduce here uh yaren bellner.

A

He is, I believe, you're, uh are you the founder, cto yeah, sweet yeah, so yaron is the founder of be protocol be protocol. Is this really interesting, almost dow, like organization on chain it groups together people who are actively participating in liquidations across several different protocols? I think you started off with focusing at maker.

A

Then there was a compound integration and I think I saw on the app uh ave integration is on its way too. um So yeah, that's, I guess just a really short description, but I will give the mic over to yarn and let him fill in the gaps and.

B

A

Way better than I can.

B

Yeah, okay, so thank you for having me again and I've been here again so yeah. Let me share my screen.

B

And yeah so protocol. We actually just had our first uh genesis world and then it went live so it actually passed uh just a few hours.

A

B

Yeah but let's start start from the beginning: what is the protocol you can status, etc, er yeah so protocol? So you see my slides right.

A

B

A

Okay, so if there are any questions.

B

uh Please tell us so because I don't see your screen.

A

I'll, happily, like pause, you and read out any questions that I see in the.

B

A

So definitely feel free to post them up. People who are on the call.

B

Fine, so yes, as david, say, b, protocol aims to actually create collaboration between different liquidators across the ecosystem and aims to actually formalize the incentive system. They got and.

A

B

Have some kind of user acquisition? One of the selling point is that initially, it shifts some of the minor profits to the users.

A

Okay, so in the most technical.

B

Level you know, b protocol allows you to interact with maker, dao and compound the way you are used to and actually interact with. The you know make a system that you're used to, but with a small, with a thin layer of a wrapper of smart connect interface and to support the smart contract interface.

A

There's also a web interface.

B

As you just go to people.org and manage you, make your account or compound account from there.

B

Okay, so the aim here is to incentivize keepers or liquidators.

B

That are, of course, essential to all these defile lending platforms uh and, and the way to do it is users who manage the report for the accounts, via our interface, actually give priority to liquidations uh to the liquidators that work with the protocol.

B

In return, they are willing to share the proceeds of the liquidation with the users.

B

So if that's a compound of a give eight percent liquidation penalty uh to the user, so in in b protocol over compound, uh only five percent out of it will go to the liquidators and the rest will go to all the users of the protocol.

B

The way that this is being done is without any change in the conditions user get, so the user will be liquidated exactly the same condition as you would on maker or in compound, and this kind of magic is obtained. Okay, so on one side is liquidated under exactly the same conditions, but on the other hand it does give a priority. So what does it mean to give a priority?

B

So it does actually is give liquidators the option to repay and provide this cushion or buffer to his debt whenever they want- and this will prevent from the original maker or compound system to liquidate because make your system will see this account as safe.

B

However, if with our discussion, the account would be classified as under collateralized on maker.

B

Then then our liquidators will be able to liquidate it and again some of the profits are distributed to the rest of the users.

B

So the state is that we went live. I think exactly six months ago and exactly uh you know when having a community called here uh and- and actually it's pretty interesting, because we just.

A

Said: okay! So when we went live.

B

A

Promised or the protocol.

B

You know dictates that after six months the control will hand over to the users will be able to vote on whatever they want and the first vote just went in we'll talk more about it later, but so we are live exactly for six months, as uh we still hear of over 120 million dollars.

B

The most of it is still in compound maker is still smaller, but overall going well liquidations. We.

A

B

Only on maker and in the bull market, and not many liquidations, as we might hope for but yeah erin.

A

Quick question yeah the deposits: uh that's uh users positions that they have migrated into b protocol right.

B

Yeah yeah so usually.

A

B

Can migrate or just open a new position, but right right got it yeah. So.

A

Yeah and then, by the way.

B

So you know when you open a position or when you migrate, the position is still on may here right right, just let that some scenario appear to manage it for you. You know, or you know, to be more accurate to provide the cushion and replace some of the debt for you.

B

uh But luckily, okay, when you know back in the sub 1000 day, 1000 price days, we were able to you know actually test it in production and generate. You know, have.

A

B

uh Of I think back then, okay, 100 east, so 70 000 back then which went successfully. We also, of course, did some testing for liquidations with some positions. You know some test test positions. We generated a along the way we also reported. You know some issues with the maker, dao and liquidation process, which you know. We noticed that maker liquidators don't liquidate our small positions that we did for testing.

A

Which, unfortunately, you know the outcome was.

B

Not very positive right with very huge uh last.

A

B

And but I guess but.

A

Yeah, I guess that that would have been worse.

B

So yeah, so we did these liquidations. uh As I said, it's owned by the users from day one, but it was actually a time lock that didn't allow the users to do anything.

A

So, actually a couple of quick questions there, so so yeah, definitely um testing and prod is hard when there's like such a high dust limit and for those of uh you that are watching the dust limit, is the minimum amount of dye that you could generate when opening a position. So this has been increasing because of ethereum's gas costs and the inherent cost it takes for a keeper to actually liquidate a position.

A

So you know before you'd be able to open up a couple hundred die position on maker, but you know what's the sense of a keeper paying a hundred and fifty dollars a transaction and then an additional eighty dollars hundred dollars per bid. uh You know for such a small position, so that's why, over the last few months, you've seen this dust, this minimum debt number grow and yeah it's unfortunate for testing reasons but yeah. I just wanted to fill in some of the context there. But then my.

B

A

Question for you, yaron was on the executions that did um happen, so you say there: the b protocol handled around 100 each of liquidations at some point in the last six months.

A

I'm curious about what the performance was on those if, if you have, uh if you have that in uh in front of you, I'm curious. If people uh were outbidding you uh if any liquidations that you participated in were actually lost like yeah, I'm curious about the actual performance.

B

Yeah yeah, okay, so yeah so good question, and I I didn't maybe explain this part, so you know we given we currently have you know so we offer like uh 72 liquidating.

B

We don't let them compete with each other. Therefore, the liquidation, the degradation mechanism, is not auction, but rather we take the maker dow, a median price feed which is like a real-time price, feed and and and then we just subtract the maker penalty out of it, which is like 13 percent got. It got.

A

B

So so yeah, so they they cannot outbid more or less than that. I mean this. This will be the liquidation.

A

Understood so just to re just to kind of spit it back to you so that you can confirm my understanding. So when a person wraps their position with b protocol and let's b protocol manage it when their position approaches liquidation it actually what the protocol does is it uses the funds that it has to prevent like an actual maker dial liquidation, but it's still um pretty much act like it. It does a similar type of thing. It just.

B

A

Protects it on the maker side but penalizes you on the b protocol side.

B

Yeah yeah yeah, the data is yeah yeah. I mean like our vision, and you know we also elaborate on that later. So it's yeah it's like to there. You know the liquidation, liquidators community, yeah and eventually you know the the defy lending platform as a whole and not necessarily protect the user from liquidations. For that you know you have great tools like default saver, and actually we have some sort of integration with uh the idea is actually to incentivize the liquidators.

B

We do share some of the liquidation proceeds with the users. You know in order to incentivize them to use.

A

It right, basically, you know it's all.

B

That, in order to incentivize them to incentivize the liquidators right but like the yeah.

A

That's such a great like business model, though, because uh you know any positions that are managed by you guys. You guys have like a priority over like an open market, otherwise open market of bidders and keepers. So yeah, that's.

B

Actually, a really interesting.

A

uh Strategy that I'm just like realizing.

B

Yeah and eventually you know like once, you know there will be a big user base. There will be even stronger liquidation community yeah. You know that we can do many stuff, like maybe commit on protecting you et cetera, but at this point you know we are still in the liquidation, liquidators community building.

A

B

Yeah so, as I said, it was owned by the users from day one and users accumulate accumulated non-transferable escort which allowed them to have control voting control over the protocol, but the six months, a time lock was done. You know to to let the community go a bit to let people gain. This call.

A

Yarn, can you talk a little bit about that uh non-transferability because I know initially, you and the team had uh had launched this thing with the intention of like being different like not having a you know, fully freely. Transferable governance token. So, uh what's going on.

B

Yeah yeah so like the bottom line, is that the community decided to change it.

B

But yeah the idea was eventually, you know we wanted tokenized government governance, you know we wanted users to have control. There's also. You know we wanted to give rise to some process where users kind of negotiate the conditions with the liquidators, uh but you know giving full control to the users eventually means that they can. You know, decide to tokenize it if they want and yeah, and indeed you know like in the last month. You know we started discussion with the community.

B

There were some on chain votes with disco and yeah. There was a clear, clear majority uh in favor of tokenizing it, uh and the protocol was written as such that actually absolute majority in the of the school you know of the voting power is needed.

B

A

Yeah so I'm curious.

B

A

How big is the protocol community like how many active like depositors, yeah, I'm.

B

Curious about the size yeah, so we have around 400. I think today, 408, which oh wow 150 or for maker and 150 from compound. Oh.

A

B

A

The positions themselves, uh what what? What about right? It's.

B

Yours, no, you know like if we go, ah you mean like daily, no you're talking about daily users or like users who have accounts.

A

uh I'm talking about the users who are uh who are you know the voters and the people putting up their own capital into be protocol, because my understanding is there's people who you know manage their positions through b protocol, which is, I guess, like the users and then there's the. I guess. The organization of b protocol, which is like.

B

Members of the.

A

Actual dow yeah, I don't.

B

A

I don't know if you guys are officially called a dow or not so I'm sorry for being a little.

B

B

Deposit funds, you know and manage their positions. We have 400 yeah.

A

B

The dow you mean regarding the dow vote, or I'm not sure what do you mean by that okay? So the dow was only voted today and you know we actually, once 51 percent uh crow was reached. You know we just shut down the voting right because there's no point to continue voting yeah.

B

Once there is a absolute majority in the off-chain vote. I think in yeah. So in the off-chain vote we had over 100 people who actually voted.

A

B

A

Okay, that's really cool.

B

A

B

You know the vote about without tokenizing I mean yeah for the genesis vote yeah, which you know gets out of traction and people were very opinionated about it.

A

And yeah actually so.

B

Yesterday, okay last night, israel time uh you know.

A

B

We did a lot of off-chain signaling and voting with this call, but eventually the protocol dictated that an unchained vote. It has to be carried on and absolute majority has to support it.

A

uh How many, how many people uh participated in the on-chain vote.

B

Yeah so indulging vote around so around 40 in maycare and sorry 14, compounded 20 in maker, but we actually shut it down. You know, once majority reached, you know to avoid the gas waste and etc. We just shut down the option to vote because 51 it was enough uh so so then, and that was obtained after 12 hours, which is nice uh and yeah. Now, there's like 48 hours time lock, after which you know the government, the token could be claimed by people who held this call.

B

uh The dow could start voting and actually our structure. So our structure resembles the compound structure, but we do have a like a community multisig which is currently mostly held by the backstop itself. That will execute off chain votes.

B

So the aim here is to do most of the future votes fully off chain with the snapshot tool, yeah that makes sense, yeah and yeah, and- and you know it's important to say that our dao does not you know- does not have a controller for the fans it's fully non-custodial, so the worst it can do is you know, play with the incentives a bit. uh This is why it's kind of safe, you know like to let the multisig handle it. It does not touch.

A

The user money.

B

And only if the multisee you know, misbehaves, then with an unchanged dow, could replace him uh beside token governance and token distribution for the score holders.

B

What was also approved is three months liquidity mining program which actually, okay now you know given it was already approved and it already started a little actively from last saturday uh and yeah. And finally, we distributed ninety thousand dollars of profit positioning, which was mainly you know. So we did some liquidations, but most of it, because it's a value really appreciated and yeah.

A

B

A lot to do a lot to share so.

A

B

The governance- and you know if you have a maker account currently we only support each a, but now that we have governance, you can actually onboard more collaterals and you know just go and import your vaults.

A

B

So if you do that, you can share the liquidation proceeds uh and the liquidation process is not by is not connected to the token okay. The token is only for governance, and so.

A

You still get the.

B

Non-Confirmable score and it will give you a portion in the liquidation process, but you also get the token which give you governance rights. It is not custodial neither way all the dao controls it and you get exactly the same liquidation conditions and interest rate, and you.

A

Know stability fees.

B

You get in maker because actually using maker with one caveat that instead of an option it's according to the price feed, which you know at least in v1, in the every one liquidation model of maker dao, it was usually better.

B

Probably uh okay- I don't know if you guys have statistics about v2 already, but typically it would be better, probably than the.

A

B

A

Yeah also, my understanding was you use the medianizer price because it's uh it's like a live price rather than the ocean.

B

A

B

Yeah yeah they're always same is, with one hour delay, so to decide whether you know you should be liquidated. We do use the osm because you know we promise to liquidate exactly under the same conditions. Yeah.

A

So we do use they're always same. You still have you know.

B

One hour heads up: if you want to save it, if you use, you know, defect saver or whatever, although the device server still doesn't support.

B

You know this feature with us supports other features, but you still get the same condition with one hour: heads up, etc, but once liquidation actually happens yeah, then then it's according to the real-time medianizer price feed, which.

A

B

Only fair to do it this way for both sides and yeah.

A

B

That's the current state of events and I want to discuss you know some initiative. We started to all up with your community a few months ago.

B

uh We did get some positive feedback, but then you know we were running out of time with other stuff and I think it's a great opportunity and now that we have a dao. You know when working on new stuff and revive.

A

It and discuss it again: yeah.

B

So so yeah, so what we propose? Oh you know our end goal eventually is to have ecosystem of liquidators.

B

uh You know and where's this uncertainty. You know for the getting liquidations who who get to avoid gas walls uh and eventually you know our aim is to incentivize them to have strong liquidation system and hedging system and not just arbitrage and uniswork, etc.

B

Okay and now the way we do it right right now is we come to. You know, make your users compound users, other users and say: okay, please, you know join our interface, you help incentivize uh the liquidators, you know we see it as a way to help make it though, but you know maker, doesn't have to give up anything.

B

The users don't have to give up anything, but also from the liquidator side. You know they uh they get these flexible conditions, okay, but but eventually you know the team has to work hard. You know to attract the users, get big user base etc, uh which is sub-optimal.

A

B

Also make you know the platform can get more out of this liquidators if it will be.

A

Able to achieve bigger.

B

A

B

So yeah, so this is basically what I said. Okay, so now, users get more liquidators, get more make your does get more the platform. But how can we make you know everything even limited and win-win for both parties.

A

So so let me let me try to restate everything uh from this this proposal, so basically this declaration of intent and you'll correct me from wrong erin. So this declaration of intent it proposes like uh not an etsy uh but more like a d or an additional collateral type, but the.

B

Only difference.

A

Would be that the uh that the liquidation engine would not be maker, dow's native liquidation engine, it would run through b protocol first, or at least it.

B

A

Prescribe the protocol as the dedicated liquidator and it would have like a you know, dedicated amount of capacity to do those liquidations, and the idea is that, although we would be losing revenue by, like you know, uh splitting like giving b protocol, basically the revenue from liquidation penalties, or at least the part of it, uh the trade-off would be that we would have guaranteed um uh coverage for when liquidations do happen. uh And and that's the idea uh generally.

B

Yeah yeah and, moreover, not only coverage, but you know we claim, and you know it would be put up to a test if in one's life that uh that you know we would be able to support and even guarantee higher leverage right. So that's so.

A

Yeah I mean make a will.

B

Right might lose some from liquidation fees, but you know allowing yeah.

A

B

Given better value proposition for the user with higher leverage, which means lower collateral ratio, yeah.

A

The idea being that, if there is a dedicated, liquidator they're standing, you can, uh you can basically go a lot riskier with risk parameters and.

B

You have a little bit more room, yeah and and in them charge more stability fee right, because now you have a more you know more to offer to the user. So so actually you know so I don't have slides on it. But you know if you look at the you know like the centralized uh lending platforms or you know, margin trading platforms to be precise. So if you look at buy bits, they are usually stability sometimes go to uh over 100 percent.

B

You know because you can okay, so there you can do x, 100 leverage- and you know I'm not offering for maker to do x, 100, uh but but still you.

A

Know there's a lot.

B

Of form going from the five percent stability fee that you gave give on this x-ray leverage to 100 stability fee and the tax 100 off right. So if you can offer x, 20, x, 10 uh so yeah I mean you might lose from a liquidation penalty fees that you will not get, but the stability fee. You could collect.

A

It basically unlocks uh like way riskier positions or like way riskier configurations.

B

A

B

A

B

As part of some control, experiments, etc,.

A

B

For this purpose you know, maybe let me present our philosophy of liquidations and why you know could be better and and actually right now we're trying to see some hybrid approaches to combine it but yeah. But let's start okay, how liquidation or in other words, next stop works in the traditional finance.

B

uh So if you are there, you know a margin, trading platform or other kind of lending platform. So, first of all, you need to make sure you have this dedicated backstop of traders that you know can liquidate in times of need. This is ftx has won. uh Kraken has one, for example, for the futures exchange uh and you onboard them, and you know you they are committed, they put capital in your platform and they commit to liquidate and by commit to liquidate.

B

You know in a centralized venue just means that okay, now you can slow the position at them. I mean just take the money and perform the liquidation without us and then, uh but on the other hand, you commit on on a discount which actually in centralized finance, you know in bitcoin. uh Usda is around one percent, which is you know much lower than eight percent of compound five percent of uh et cetera.

A

But you know, but you do.

B

Commit on the discount- and this discount is not subject to you- know grassroots et cetera, et cetera, because right now, okay, so compound commitment, discount.

B

It has different models, but you know avid others they commit on discount, but you cannot really estimate the discount because of gas flow. You know most will go to glasgow because you have a lot of competition so so, on the one hand, you know you are forced to offer a big discount the degradation penalty. On the other hand, it doesn't really go to the liquidators uh and yeah and and finally, when liquidation is needed, the platform just dump it on the backstop.

B

If I work so the nice thing is that you let everyone participate, but as a byproduct, you know there's no commitment, because if you let anyone participate uh without needing.

A

To deposit anything.

B

You know on days like black thursday, when it's not profitable and actually it was profitable on black thursday, but no one, you know, had the incentive to build the system for it and they're just.

A

B

A

Not act so there's not commit no commitment.

B

And you cannot have a commitment if you let everyone participate.

B

Okay, so typically you have a fixed discount, but it is shared with the miners and recently you have all these smart flash boards, so maybe not in gas auction, but in some private transactions, but eventually it goes a lot of it goes to the miners yeah and the outcome.

A

B

Liquidate also on the liquid date, if it's convenient to them.

B

So we protocol, you know we try to combine the best of two words. So the end goal is to have something permissionless, so the community onboards liquidators.

B

uh We are now also investigating user-based desktop and might have something to report soon.

B

We do want the liquidators to be committed and in return for the commitment- and you know, have a fixed.

A

B

Where, in the current state of event, this discount is shared with the users, and you know in the future, it will just you know, the alternative is just allow higher leverage for the users uh and, as a result, you know we hope to get committed, liquidated.

B

A

B

You know what we offer is wbtcb, just because east already have three collateral types, but it doesn't really matter as long as it's really you know like a nice, a collateral liquid. You know that has a lot of liquidity in the market, except.

B

So yeah we have something like you know: allow x, 11 leverage which means collateral ratio of 110 uh and start with five million uh debt ceiling.

B

uh And you know if this experiment go forward, then I liquidate, you know we hope our liquidators will be willing to actually lock fans there in the order of half a million dollar, which is exactly enough for extend leverage for five million dollar and then once the liquidation does happen. So it's no longer, you know the provocative. If they want to take it or not, anyone can force.

A

B

To do it so, in a way with the couple you know like the liquidation operation from the trading and hedging operation right, so some someone will have to you know, make the transaction of executing.

A

B

Liquidation, which is actually very similar to what is being done now in vito in your return, but right now you know the liquidation scene in d5 is that okay, there's a competition.

A

B

A

B

Flash long and do an arbitrage on uni swap and you don't have any trading abilities needed yeah, which.

A

Which is not good, you know for the long term and if you.

B

Want to support bigger liquidations, then you really need to decouple the front running or you know, maybe the execution of the transaction from the actual trading.

B

uh In this way you know anyone could dump the position on the liquidators and then it's their problem, how they trade it and you know, make profit from it uh and yeah and what will be needed for maker side?

B

uh Yes, so now, instead of sending it to an auction, it will have to be thrown at b protocol, uh and you know here, the failed scenario is that all of our liquidators get liquidated themselves and then the ultimate backstop will be maker keepers still, and there should be, you know, attractive liquidation premium and it will make it worthwhile for the liquidators to lock up the capital.

B

uh And, finally, you know in order to support high leverage, maybe sampling the price. Only once an hour in the osm might also be an issue, because.

A

B

You know that uh accounts can be under not only.

A

Under collateralized, but.

B

Even below the 100 percent, not only below the collateral ratio but below the 100 percent threshold, and then you know, liquidators will have to lose if they liquidate them and yeah.

A

So we proposed.

B

It few months ago, overall, we did get positive feedback and it's mostly our fault. You know not moving forward with it and we also had other things to do, but we also we did want to address.

B

uh You know the comments we got and the suggestion right now is that we don't have a new solution, but I'm here to report, you know mostly that we are working on a new solution and I, which I can still I still cannot represent.

B

It cannot present, uh but the feedback we got was that okay, first of all, you know to make make it clear that it is not an insurance like the next nexus mutual offered, something so no, you know we cannot do magic and if btc go to zero, we will not be the one who safe die and.

A

You know we also go.

B

Bankrupt, etc, and now there were some concerns on how big of liquidations you know it could handle and there's some egg and chicken problem here. Is you know that before there's a lot of profits there it's very hard to force or to ask liquidators to put a lot of capital, and there won't be many liquidations before it's big, and you know it cannot become big. If there's not not a lot of capital deposited right, yeah and yeah, there was.

A

B

About loss of liquidation penalty for the dow, which again I think you know if you look at bit mix and by bit- and you know you see the so there- it's not called stability if you're right, it's called the so because I think it's called the funding funding rate. But basically it's the same thing.

B

They go all the way, some days to 100 percent annually, which is you know like older or too old of magnitudes more than you.

A

B

Take on the liquidation penalty, yeah yeah.

A

So yeah so right.

B

Now the status is, you know we started with this vision that professional liquidators are needed. They have much better capital efficiency. uh However, you know what we witnessed is you know, speaking with maker, but also other platforms. You know in the independent want to have the certainty of okay.

B

Capital should be already locked beforehand, and- and this is how to ask for professional liquidators, you know if you want to you, know like, for example, you know, let's, if you want to back up three billion dollars of die, then ask them to lock up one billion dollar. It doesn't make sense, uh so we still explore. You know capital efficiency there and we will start with small experiments which could work, but.

A

We are also working on a user-based.

B

Desktop and you know it's- the hype in defy people will be willing to deposit uh and we are working on ways to make it. You know like more tailored liquidations and more capital efficient.

B

uh So basically we kind of change our angle from only professional liquidators to also user based again, everything now is still in research mode, not what you will currently use. If you go to our application and yeah, so you know we'll be happy to report once we have something.

B

You know that is out of sales mode there, and again with that, you know. We'll conclude, uh you know, I do, recommend you to go and tie us out. If you are maker users for us in twitter and.

A

Yeah, if there are any questions.

B

We'll be happy to answer.

A

uh Yeah, so there is uh one question from frank: uh will there be any liquidity mining incentives with.

B

Yeah yeah yeah, so there are already yeah yeah. So it's about part of the genesis world slimes liquidity mining program which actually already started uh in yen, and actually so you know, as we don't want to encourage an effect behavior.

B

Most of the token allocation distribution will go according to your debt, not according to your collateral. So there's no point to just go and you know deposit funds that doesn't do anything.

B

uh But if you already have a position in maker doubt and yeah, I think it definitely makes sense uh to import it and but yeah, but we do only support each a right.

A

uh What's the developer uh like community, like eb protocol, how many people are in, like your team, for example, versus interested in doing like work, additional work.

B

The the team is uh yeah, we have four people, yeah four people, cool yeah. So right now you know we only became a dao. You know right now and yeah we're definitely hiring and looking for more or ideal hiring or you know looking to engage with people in the structure of the dao, etc.

A

B

Still new company.

A

Cool and and so there's two ways to participate in b protocol right. You could either lock your capital straight up into the backstop and like do it that way or you could wrap your position into the protocol right. Yeah.

B

Position is one the other one is not really only lock your capital, but you know you need to have a trading system along with it. So it's mostly for you know, like traders who have their own boats, you know how to ride boats. uh We.

A

Do hope in the.

B

Future to allow you know, user base, something like uni swap for liquidations, but right now right now, no it's only open for professional ones. If there are, you know people on boards and they have trading systems in the.

A

B

A

B

A

Welcome to approach.

B

A

Right now, the dollar has to approve any onboarding.

B

But generally we are very, you know, welcoming new liquidators.

A

B

A

B

A user only manage you, you know, wrap your position and use it to wire me. Yeah.

A

Got it got it yeah and as for the declaration of intent going slow, I I think, generally speaking, that that's okay, because the uh protocol engineering team is so backed up with things. You know they just came out with liquidations 2.0, but still on the backlog. They have the dye flashment module, they have the keg they have they.

A

They basically have a pretty nice backlog of work uh as a team themselves, and- and I was curious not just about this particular declaration of intent because I imagine like if the be protocol community uh wanted something like this. uh You know protocols can devote not just like the proposal themselves. They could also devote like developer resources, so.

B

Yeah, definitely I mean you know yeah so like, and this is why you know we did when slow was that it was actually, you know, have declaration of intent first and then yeah take the development and most of it on ourselves.

B

A

Nice yeah, so that was my question is like what what would be the willingness of uh of your team.

B

Yeah, your developers and your community yeah yeah. Definitely, but you know this is why we wanted to have some declaration of intent before so we will not vote for vayne and yeah. We were pretty slow.

B

You know we did that positive feedback, but we're not sure if it's you know we'll pass or not, and we had other stuff to do anyway. So.

B

And and yeah so right now is: we are working on the way, restructuring the proposal and try to uh enter. Maybe some user-based desktop there. uh You know.

A

Also feedback we.

B

Got from you, we also, you know discussing other communities about that and now we are, you, know, kind of processing the feedback and seeing how it will turn out got.

A

It got it uh so I know uh you mentioned uh that you guys are aware of the liquidations 2.0 upgrade and.

B

All that stuff.

A

I was curious about uh just getting a status update on the upgradability of the protocol and and whether this new liquidations system has any like larger implications. Like does, there have to be like major upgrades happening.

B

A

It change the model, significantly etc.

B

Yeah, so so part of the you know, non-custodial part, is that also it's not upgradable. However, the only thing that is upgradable, so it is a okay.

A

B

Okay, it's a bit technical, but we only use the vat system right, which is, by definition on upgradeable from your side right.

A

The only other component.

B

We look at is the uh what used.

A

To be the cat model in order to read.

B

The uh liquidation penalty, but actually you know already six months ago, liquidation 2.0 was discussed, so we did prepare a module where once the dog I know it's called the dog model is approved, it could read it from there and this could only be done after the cat becomes fully obsolete, which is not the case.

B

So that's that's about that and you know, liquidation penalty is not about to change as far as I know anyway, but once you know once uh the cat is being voted out of the uh make your system, then it will let the dog address and fetch it from there. So.

A

B

One thing, then, and beside that it doesn't need any other change and, and again this is this was already implemented six months ago and again, foreign etc, but should work with the upgrade, uh and that's the only thing that you know relevant to the 2.0, because our actual liquidation doesn't really go via. You know the auction mechanism right right, right so yeah. So it's like completely oblivious to the underlying liquidation mechanism.

A

Man, that's actually that's so certain. That's such a great model like that. That's that's how you know it pays to be like modular uh yeah. I really like it cool so hold on hold on, because I think I'm I just want to make sure. I understand something. So you said that they can't upgrade like existing contracts, but they can add to the like the whole.

B

No, no so so we we have, you know, so we already deployed the mechanism so making us this chain log smart contract right, which has uh others of the cat and the dog. Yes, okay, we want to buy, we want to wait, I mean the smart contract, we read the liquidation penalty, which is 13 right now and.

A

B

Is the only thing we? This is the only time we approach anything besides that: okay, the vat and the median price feed as well, but uh so so.

A

Now we have this logic.

B

A

B

Is no longer in the chain log then search for the dog, okay and then read it from there, because this was already under walk. You know six months ago.

A

Right and, and so that particular case is only when the backstop is not sufficient and the position does.

B

A

No, that's always because you know.

B

Also, the desktop needs to know the liquidation penalty to put on the user.

A

With exactly the same condition,.

B

Yeah, so what we have is, you know, like first read it from the door from the cap, but if the cat is not in the chain anymore, with it from the dog.

A

B

Sense, yeah and then it's already implemented, and you know, there's nothing that should be done and once it is removed from the chain log by the maker down uh it will you know it will read it from the dog and in the meantime you know both have the.

A

B

So it's not really.

A

A

I got it uh I saw. I saw there's some uh conversation happening in the chat I invited peyton if he, uh if he is interested uh to come on video and ask his question, but uh while he considers that I'm gonna quickly skim what this question is because it's nice, okay here uh you're invited peyton all right. I won't read it then so he's gonna come on in just a sec.

A

Hey peyton, what's up man.

B

A

uh So everybody this is payton. He is a fellow contributor on gov alpha the governance core unit at makerdao and a really awesome community member. So yeah you asked a nice long question so feel free to feel free to restate hey um yeah. I was kind of asking. uh I was.

B

Just curious, where b, protocol kind of like uh sources or gets their liquidators, I know a big problem for us with the keepers. Is uh you know they kind of want to keep quiet and don't want to reveal themselves in their position. um So I was curious how you kind of challenged uh fix that challenge: yeah, yeah, okay, so previously before people called the city of canada, network uh and kindness network is kind of decentralized exchange, but more like uniscope interface in the sense that user come.

B

You know the only takers who, uh uh however, the the back end of kyber, was not like anna cuny, swap, which I fixed formula, but actually professional traders were market, making? Okay, we're offering prices all the time there so yeah. So the backstop is composed from three market makers who, okay back then was working with sky bear now only two of them but yeah. This is where they came from and.

A

And you know I'm.

B

Like you know, I think there's.

A

B

General misconception about liquidators- and you know it was also in the past- consulting two liquidators myself. You.

A

B

Most of the liquidators you see, especially in the v2 in the liquidation tool, where you can just flash loan everything you know they just ask people who run boats and you know, arbitrage it and uni swap, and it's not only about gas concerns there. It's about. You know the soiling it on unisop is not really a backstop. It's just you know it's like a market order right. It's selling market order, which most of the time is fine, but like sometimes it's not fine, and you know we did some simulation.

B

If you take finance future liquidation sizes for east east usd, not even bitcoin use the yes. So again it depends on the model, but you know you have hours, 50, 50 million dollar plus liquidations, and it's not.

A

Obvious that uni.

B

Swap could handle it, uh so so you know so when we discuss about backstop, it's not only people without capital on a flashback, but we actually try to really have you know, like uh traders with capital who who who own chain you know market, make on-chain regularly and then you know they already have the capital launching.

B

So if there is liquidation.

A

They can, they can just.

B

B

Yeah, thank you that that makes sense, because I mean, in my view it it like. You know it still is a problem too. The exact reasons you pointed out and with something like the protocol. It really does allow you to be a little more aggressive with the the risk parameters and potentially capture a market um that isn't being served by d5 right now, yeah yeah, and then I think you know maybe another flavor of you know.

B

Liquidators don't want to reveal themselves is another angle, is that you know some protocols, maybe not make it, but you know, but basically have you know the liquidators under the payroll, which.

A

Is fine actually- and you know this is- might.

B

Be what bitmex is doing and tracking?

B

However, you know if you want to go fully decentralized fully down, want to give the community full control, then you know it won't scale for a fully centralized protocol and you know, b, protocol.

A

B

You you know like to do it publicly.

A

B

And not, you know like pay under hiddenly to some entity.

A

Yeah, I really like how much value it kind of takes by just making an in-house like pre-committed group of liquidators. I think that's like a very, very powerful model uh and I'm actually surprised more people aren't doing it uh so huge kudos to be protocol for being a pioneer.

A

uh One question I had, though, was: uh what's the roadmap for being able to uh use other vault types in the protocol.

B

So for what types you know that oh okay, maybe three, three things also one you know liquidators will have to integrate and that's relatively the small part.

B

Another issue we had is that you know there was no doubt that could confirm incentives to new vault types and now we do have it and then finally, it's only you know like supporting it on the website, uh which should.

A

Be relatively easy.

B

So yeah I mean so so so far we didn't didn't work on it, because there was six months time lock without the ability to change things, and you know either way. We focus also on compounding others, but should be relatively simple to add new collateral types.

A

You know, especially in the popular.

B

Ones I mean sbc and wbtc.

A

B

And yeah, congratulations on on the votes and everything that's super exciting. Thank you. Thank you.

A

One step closer to decentralization, uh so let me uh just remind anybody who's watching uh feel free to ask any questions. We're coming up on like the last five minutes of the call. So uh now would be the perfect time to throw any general q a uh at yarn.

A

So yarn it's it's interesting that, like uh to add new vaults, the liquidators that participate in the protocol would also have to upgrade like is there uh like? Is there no like standard uh or like synced way that all the liquidators that participate in b protocol can be like synced up or all.

B

B

You know they need to configure it in their trading system. I mean I mean all of them. Are the market make you know what bitcoin you know that kaibail 0x whatever? So it's not it's not a big delta though, but they don't need to spend some time on it.

A

Got it got it yeah? It's interesting.

B

I guess I'll take a shot and ask if there's any uh forthcoming partnerships you're able to reveal or not no, no, nothing, nothing.

A

B

A

B

A

B

You know they're now, being decentralized is again the real objectives in terms of partnerships, so you know like uh it's really eventually utilized. uh You know like ever defy uh backstop, primitive right.

A

B

You know this might be relates to david question about you know, other people not doing it or other projects not doing it. I mean you, you could envision, you know like a world or you know it might even make sense for maker to do it on their own forever to do it in their own, but we really think that you know having like this one defy primitive that actually aggregates or you know, we'd be able to serve all these platforms would be way more efficient and and also.

A

You know would allow.

B

You know platforms to focus. You know like which platform.

A

B

To focus on what they like to do best.

A

All right on uh well we're coming up at the top of the hour, so I am gonna uh start closing out the call. There's no last final questions, all right yeah. It doesn't look like there's so many questions and also by pros bros, just kind of hopped off, but it's cool uh anyway yaron. Thank you so much for coming on. The call. uh Thank you for updating us on where b protocol is uh where it's going um kind of the current events of this. uh This genesis vote for governance.

A

uh We're really excited to see the b protocol community grow. I think that the declaration of intent and that you know experimental vault type, would be a really great experiment personally and so yeah. I look forward to more things that improve the liquidations infrastructure in the space in general, and I think your team is doing a fantastic job at tackling this problem space. So uh huge kudos to you and thank you for coming on the community call.

B

Yeah: okay, thank you for having me and looking forward to come again and give more updates.

A

B

A

That goodbye everybody and have a fine tuesday.

B