MakerDAO Issue Discussion, 16 Dec 2021

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From YouTube: Issue Discussion #3 | MKR Burn and the Surplus Buffer

Description

GovComms Engagement Lead @thomas.flitter leads a discussion on the burning of MKR.

From MKR valuation and capital liquidity to growth, risk, and public relations, what drives the sentiment in favor of burning MKR, and on the flip side, when and why should we avoid burning MKR?

Notes from the call: https://docs.google.com/document/d/1Rwd_f8Yf50JWhEzCvnkbTwvdsrBXkthfZAuSjODAzNY/edit#heading=h.x0v474f8ay5a
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Disclaimer

This communication is provided for information purposes only. The views and opinions expressed in this meeting are those of people involved, and do not reflect the official policy or position of MakerDAO or any of its contributors, Core Units, or affiliates. This communication makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, financial or tax advice. You should consult your own advisers as to those matters. References to any digital assets and the use of finance-related terminology are for illustrative purposes only , and do not constitute any recommendation for any action or an offer to provide investment, financial or other advisory services.

A

Thank you david uh just for everyone that was on it is this uh session is being recorded, uh but good day. Everyone thank you for joining us and welcome to the issue. Discussion call number three make or burn and surplus buffer.

A

My name is thomas flitter engagement lead for the govcom team and I'm doing what david and artemis is on, and many of you who I have read, discussed chatted with. You know about some of these topics, so hopefully for a lively conversation today, as we progress through the presentation, you know, please raise your hand or you could just provide a comment and the chat function of david's, helping, monitoring and uh we'll be able to try to answer your questions along the way.

A

We also have a session at the tour towards the end that we can have a nice open discussion about any comments, feedback or questions that you have also just as a disclaimer.

A

I just want to go through that process is that this is provided for information purposes only and that the views and opinions expressed in this meeting are those of the people involved and don't really reflect the official policy or position of maker dow or if it's contributors, core units or affiliates.

A

Also, this communication makes no representation about the enduring accuracy of the information appropriates for a given situation. The content is provided for information purposes only and should not be relied upon as legal business. Investment, financial tax advice, consult your own advisors for those matters, references to any digital assets and the use of finance related terminology or for illustrator purposes only and do not constitute any recommendation for any action or an offer to provide investment, financial other advisory services.

A

All right with that said, we've gone through all the nice legalese. uh Let's move on. Hopefully everyone is able to view the slides we have here, and what we'll do today is. We will go through a nice overview, talk about make a burn and surplus buffer, and I want to go on to talking about our agenda. But before uh we move on david or artem, do you guys have anything that you'd like to add um that I may have missed, since this is my first um issue?

A

Discussion call our third one uh in line, but I wanted to see if you guys had anything to add.

B

uh Nothing for me so yeah we can move ahead good to go all.

A

Right uh for today uh we will we've done our welcomes and introductions our topics today make or burn and surplus buffer. Well also, after that, uh we'll have an open discussion and and talk about any questions you may have and then we're going to wrap up. It's going to be a little bit interesting to wrap up talking about shaping the future topics for discussion.

A

uh Today's topics were really derived based on a lot of the activity through the forum through discussions and feel like this is a good relevant topic to talk about here, as they are in informed polls voting. But again we hope, hopefully, today we'll be able to come up with some. You know some really good suggestions.

A

Maybe the recommendation about these topics so without further ado want to move on to, let's start off with make or burn now for for makeup burn, you know we really kind of start off with looking at it say: hey, you know, there's been a lot of. You know, discussion, different opinions for uh burning maker um and also increasing the surplus buffer.

A

um When we look at you know, you know what is maker and I've had to sort of teach myself a little bit being new to the company, but realizing there is over 900 000 maker tokens in public circulation. It's an erc20 token that is native native to the maker protocol.

A

It is a governance, tip and recapitalization source for the maker protocol, but as a governance token maker is used by its holders to vote on a number of different things which I found was very interesting. Voting use is used to execute changes to parameters inside the maker protocol, like stability fees, dsr debt ceilings and many others.

A

Voting is also used to make decisions on the non-technical aspects of the protocol like asset priority lists, government processes, role, mandates and even electing individuals to fill specific roles, so the mkr maker, token or, however, you want to talk about it or say it is a source of recapitalization.

A

When the maker protocol runs at a deficit maker is issued and auctioned to cover it. It was interesting launched with one million maker tokens at his inception. That's an interesting number, um the possibility of the token maker token supply dilution gives holders a strong incentive to govern the system.

A

Well, and so there are responsibilities of the holders and their primary responsibility really is to ensure the stability of the dye peg, and that is what makes the maker token interesting that overall, overall health of the maker protocol, you know the the holders really interested to focus on improving growing the maker protocol by building out the governance processes and infrastructure, and I find all this very interesting because then we have to sort of ask ourselves.

A

Well what would incentivize us or really what would incentivizers drive us to one of um burn maker tokens, and so we have to look at really what's the current state of of the burn. So if you look when we're doing, research says well what what's your policy?

A

What's your procedure and understanding that and correct me if I'm wrong, there's really no standard procedure or policy? What we do is it's! It's really, I guess a manual adjustment, and interesting too, is that it ties really in really well with our second portion today, which is going to be the surplus buffer, so the buffer and the burn have really been adjusted manually and in the interim and looking at a lot of the discussion, that's out there in the forum.

A

Also some signal requests. You know a lot of delegates, a lot of contributors. A lot of folks are saying you know what what is appropriate. You know. Where do we need uh to to take this, and I guess that's part of what our discussion will be here today is really to take a look at. Where are we right now?

A

We've done these manual processes. Is it more towards an automated process? Is it something that we can come along during this discussion session and say: hey here's. Some ideas here are some ideas that maybe we want to move forward, and I wanted to get everybody's. You know sort of thoughts and opinions, um and so before I move on have have I missed anything or does that all make sense about just you know a little bit about ground.

A

I know a lot of a lot of the folks here know that that information, but I wanted to ask david: is there anything else or or actually the folks out there? Is there anything else, you'd like to add to those this very beginning section before we talk about the driving forces of burning and not burning, uh the maker took.

B

Yeah, I think one thing I want to emphasize it and you touched on it briefly, but it's this connection between the surplus buffer and the mkr burn. So uh you also talked about you know whether or not we, um the maker protocol, has a standard policy for how it does burning and the functionality of the burn is somewhat like codified right in the smart contracts where the surplus buffer has like a certain limit and then, when it passes that limit uh it begins to auction off that excess die for mkr.

B

That's then burned, and so the way that we manage the circles buffer uh and that little functionality is directly linked to how we manage the burn um and it doesn't have to be, but that's a conversation for later, but now you hit you hit on all the points. I think yeah.

A

I was wondering if anyone else had any any any thoughts or questions before we go any further, all right. So the the next little piece here that I want to talk about is you know what are some of the incentives? What are the driving forces? We talked about?

A

You know uh looking at uh the surplus buffer, but you know the maker maker functions as a cap again a capital recapitalization source for the protocol, and that means that it acts as a collateral of last resort resort to absorb losses beyond the expected losses from collateral lot involves.

A

If burn happens, so maker value is believed to be propped up and therefore maker is more reliable, a more reliable recapitalization source. These are again what the community is laid out. You know again, this is for information. This is information. We have pulled from multiple sources, you know forum, chats, informal polls, but I wanted to add to that, is that you know: bernie maker increases proportional ownership for his existing holders and it also adds die liquidity into the market. These are very interesting points, uh but it also creates demand for maker on the market.

A

So if we think about all these different points, there's a lot that can be out there to say incentivize or drive, you know burning maker, um but it also- and it was interesting that you could put it in a relationship term to a normal stock. It says it can be an efficient way to reward holders compared to dividends.

A

um You know this is you know one way to take a look at it, but another one is that it's believed to increase maker value. Now any of these points that I'm making everyone you can chime in and say, wait a minute. I have a different opinion on it. Please let me know, because you know that's what part of this discussion is is to say we're going to bring up some bring up these topics, some good points, and you know please feel free to provide feedback.

A

B

Bring something up really quickly. Of course you can yeah yeah. So so some of those points that you bring up their incentives for burning, mkr right, like um you know, burning mpr, is believed to prop up the value, and so if the market cap is bigger, it's like a better uh recapitalization source or you know it. It's believed to add more die liquidity to the market, which it does right.

B

30 000 die at a time, but it's kind of like marginal compared to like the big thing, uh it's good pr, because, because of all of those other supporting points right, but I'm curious, you know what are the incentives or what are kind of the reasons people laid out for not burning mkr.

A

Yeah, well, you you actually dave is interesting. You say that because if on the flip side it could be bad pr, um you know it's kind of like uh people see the activity see what's going on and if and if you're not burning it, then what what's going on? If we stop it completely, the community treats light the protocol might be failing. You know you look at it. Also they're building up our surplus buffer may be more valuable. You know, but from a risk perspective, two burning makers is less sufficient.

A

Maybe than building up a capital surf capital, buffer or surplus buffer and die so point counterpoint. Are you saying, um and at least from from like the engagement standpoint is like you know, looking at it saying? Well, that's that's bad pr. People are seeing what we're doing we're, not burning maker. What are we? What are we doing in in lieu of that and so uh any other thoughts about? uh Maybe what an incentive could be for not burning maker? I mean the community.

B

Is lazy actually uh thomas, I would actually love to hear from damma yeah. Actually so hammond just put up his hand, yeah go for it yeah. I would love to hear your perspective on the whole capital battery and burn versus circles, buffer uh perspective, yeah.

C

uh Yeah cool thanks, uh like I, have uh like different points, um basically, which I think why surplus buffer is better to be higher than lower, but maybe like. I would just like to explain the you know the primary function of which I represent here, which is like the risk point of view. uh So basically s maker protocol will grow in time, so we'll obviously issue depth and collateral like collateralizing this depth.

C

I think it is like you know completely natural to expect that as protocol grows, so so so much the surplus buffer and basically the main reason here is because the like the primary function of surplus buffer is to offset any potential bad debt um and basically like, as we have more debt issued from volatile assets, which can you know, produce bad debt. It is completely natural to um to. You know like um expect that surplus buffer will grow um now, basically like in in the risk team.

C

uh We like to think about this, and obviously like it, is not like a fixed value or something like this fixed percentage, but like, for example, based on current state of maker volts, and you know, market conditions in regards to different collateral assets. We believe that, um like the same way to play, this out would be to like um keep the surplus buffer somewhere around two to three or potentially more, uh like percent relative to the volatile depth.

C

So, basically, um if we currently have something about about five billion debt from volatile assets, this would put us to roughly you know: 150 million um like die in surplus buffer, so yeah like this is strictly like from the risk point of view, uh but then like. If you don't mind, I also have some opinion in regards to just like you know, efficiency of uh both uh surplus and depth auctions um so like how I think about it.

C

Is that, like um you, guys mentioned that you know like people might say that if we are not burning maker that we are basically, you know that like protocol is not producing uh value right but like. I would argue that this is not the case, at least how I see it, because every maker token holder can see that you know. Surplus buffer is increasing.

C

So obviously you know like we are producing positive cash flow and then it is like just like a business decision right like what are we going to do with this surplus like we can either choose to.

C

um You know like in in the traditional size, sense pay out dividends, or we can, you know, choose to further invest into the protocol and like uh increase the growth of it. um So like um now, when I mentioned growth, how I see the potential growth from you know strictly higher surplus buffer than lower surplus buffer? Is that uh like they're, basically three points?

C

um The first one is that, like with higher surplus buffer relative to the volatile depth uh in the system, the the the like the whole system and like fundamentally die, which is like, I believe die holders are like the the core product of the whole system is safer right. So I just believe that if we have safer die, it is much easier to you know like um sell somebody.

C

The idea to start using dye or integrate it in their protocol or something like this uh then like the second point about growth, which I think is relevant, is that like um when we add new, like uh these kind of systems or modules into the protocol, for example, um like the recent direct deposit deposit module in ave?

C

Basically like all of these things are to some extent experimental. So, basically, if we have higher surplus buffer, we are you know able to say: okay. Yes, we can increase the basically the debt ceiling in this module right, but if the surplus buffer is um low, we are cry. You know we are kind of restricted of. You know how aggressive we can be with these new modules and then uh the third you know argument is um like that we can afford higher uh spending.

C

So basically, you know like we can invest more in people in different core units like, for example, we still don't have the marketing core unit, which I think it's quite important, right, um yeah and like if we have higher buffer, we can just you know, afford to spend more um yeah like.

B

I have another question like with a higher buffer. Grandma is: uh does that mean that we can have more leeway to work with, like a risk parameter like risk-related parameters for vaults, like if we have a bigger buffer? Can we uh systematically kind of like do lower stability fees or, like you know, kind of indirect, related stuff like that.

C

Yeah yeah for sure so like uh for me. What would come to you know mind for sure. Is that, like we can afford higher debt ceilings for some collateral assets, which are you know, like potentially highly collateralized, but at the same time, have like quite teen market liquidity and um like, for example, one of such products is, I mean sorry, not products. Collateral types is mana.

C

So, basically, like um you know, there is some interest to increase the depth ceiling, but at the same time the liquidity is quite low um and like currently, the situation with mana is that all volts in the system are like really highly collateralized, because price increased you know like really high and but like this still doesn't mean that, like somebody will, you know, issue depth which has like really low quality ratio.

C

So, at the same time we can say yes, the current state is quite safe, but, like we don't know what you know future or like new die issued like what kind of collateral ratio it will have so yeah. I I would say it's it's. um You know really uh fair to say that with higher surplus buffer, we can also have more loose um parameters in different worlds like depth, sealing or even stability fee yeah super.

A

Interesting thanks yeah. It's that's great point. uh You know, as you know, the engagement lead and we're working on. You know a lot of the information for stakeholder communications. We see that there is really you know, big growth, going on new core units coming on and that's exciting. You know, but uh you make a good point about uh about the growth aspect as well, and so uh thank you remember for that. That was that's great, that's great feedback.

A

Thank you very much for providing us that insight and so with the last little piece of the macbrown. We may have already addressed this, but um is there a longer term solution is an automated burning strategy, and so I talked about driving forces for driving forces against, but this this manual um process you know surplus bumper, obviously has an impact. You know on the make or burn, um but I just wanted to pose the question uh before we move on to specifically talking to the surplus buffer.

A

A longer term solution um is that you know we we've talked about what we've said so far, but I was just wanted to pose this question to see if I could generate any feedback or any thoughts about what that might look like.

B

I think tim would like to post less signal requests about this. If I had to guess.

D

No actually not the signal request, because it's a quite a long list of signal requests, uh but I can I can post them here as well, uh but I mean technically we we are kind of on the on the level that the surplus buffer needs to be in relation to the to the amount of diet from volatile assets.

D

uh I think that's something we can agree on.

B

And that's around two percent right tim.

D

Yeah so well, I think this is primarily a risk thing, um so I um yeah I put up a pre-map on um yeah, basically coming up with some kind of instant access module, um so we avoid this governance overhead, so we don't have to manually vote on increasing it again, so we just have it in relation uh to the amount of diet that we have in the system, um so that could be a solution. How to uh move this forward.

D

I mean looking back at how we how we're dealing with debt ceilings for uh for ilks it's the same. We did them manually as well and some at some point of time we uh decided to go with an instant access module and we can basically apply the same mechanics here as well. I guess.

A

That's great, that's it. I think that'll be great uh segway into um our second uh piece, which is going to be with you know, focusing on the surface buffer, but before we move uh further any additional comments, any more questions about this section before we move on well, I appreciate everybody's input on that. It was very good, so um our next um topic here really kind of kind of merges into the these are really kind of one on their own. But, as we've spoken before, you know what is the surplus buffer?

A

You know what what is? What is this that um we're talking about here is. Is that is really in a little background.

A

I just pulled some information for reference that the surplus buffer really is a parameter controls the maximum amount of dye that can accrue to the protocol from stability fee revenue prior to and pardon my uh flap auction um being triggered, and so, as the stability pu comes in the total amount of dye inside the system surplus increases until it reaches system surplus, buffer and surplus lot size, and at that point a flap auction can be triggered and die is auctioned off for maker. This purchase maker is then burned.

A

Also, the maker protocol only has one surplus buffer and the stability fees from all vaults accrue to it. Increasing the surplus buffer and we've had. There has been a lot of talk a lot of stuff and tim. Thank you for joining us. I know we've seen again a lot of these signal requests and we've gotten up to um a most recent and then and the link, if you will some of these links for the signal request are in our call notes by the way part of our research.

A

We pull from the forum we pull from the polls. It shows you some of the latest activity, especially with the surplus buffer, which is just passed with the 90 million ceiling, but we'll get more into that just for a reference wanted to. Let you know that, then those call notes, we've got those links as well to show the activity, so the maker protocol uh again one surplus buffer, the current state of the surplus buffer, where, where are we at right now?

A

Well, as with make burn very similar, it's manual, we come up with a signal request. We come up with ideas um to push it forward. I think that is the latest uh that we have, but there really isn't, I think, to the point of like the bureau maker: it's not really an automated process, it's it's coming up with. We believe that this is the right thing to do, and tim you're talking about pushing the signal pushing the boat, pushing the pole. Getting that to the point. I think it went david crippman for a wrong one.

A

You want to add something to that, but we've kind of moved that along you wanted to add some more to that process. Or did you want to make comment on that.

B

Yeah, I was going to say that so, like the current state of the circles buffer, uh I think like making larger adjustments yeah it's manual, but I think something that uh was interesting is that we we do lerp uh any any like changes. So, although we just said it from 60 million to 90 million, it's like semi-automated, because the way it currently works is you know over the course of the next. You know x, amount of days.

B

um You know every single day, like the the threshold, will be adjusted little by little little by little uh and what's interesting about this solution is that it actually allows for burn to still happen if uh the system makes more revenue than the rate at which these little like bumps occur.

B

So you know you could, you know, raise the the buffer by like a hundred thousand dollars, but that day the protocol could have earned two hundred thousand dollars, and so you have like this really nice effect of uh of hitting really, you know both birds with with that stone of revenue.

B

uh You know you get a little bit of burn and you get to save a little bit of money as a protocol yeah, um so it I wanted to just make that point that it's like semi-automated, but the manual process is more like us deciding in governance in the forums you know spending our time. Thinking like hey, when is the next one? How how what is the size of the next increase- uh and I think, like one big goal of the community, implied by the frustration that I read in the forums, is you know?

B

How do we make this um not take up our time right like how do we just tie it to something uh to a metric? That is a little bit more automatic, uh like that two percent figure that uh renla mentioned, um and how do we kind of go from there? But at the moment yeah it is like the the bigger like adjustments like 60 to 90, like that was a manual governance process that had to happen. Yeah.

A

And and just for um point of reference and it's at most simplistic high level, the buffer is to safeguard against high risk events, that's that it just was the intent of the buffer. It's the safeguard against these high risk events and.

B

Thomas can actually share a real life story about about when this actually came into play. Yes, yeah. So, as many of you uh know- and maybe some of you who are newer to the community, don't uh the maker protocol actually went through quite the battle test uh back when covid first started, hitting when really the markets got hit by covet in march of 2020.

B

So there was a really famous day called black thursday, in which the protocol suffered something like an exploitation that involved the you know the liquidation system of the protocol, where a bitter, essentially because of the gas environment and because of everything there was only a single bidder who was able to bid on liquidations that were happening at maker and they were bidding close to zero and they won something like eight million dollars worth of ethereum at those that base prices at today's prices, probably like ten times more than that, but um they they got themselves something like eight million dollars worth of ethereum and the protocol as a result, wasn't able to raise that money that it was supposed to raise from the liquidations to cover the bad debt that it was liquidating right.

B

And so we saw the surplus buffer go from like positive 7 million, or I think it was like 14 million or something like that. No actually, I think it was maybe closer to seven at the time um to negative seven or eight million. I I I forgot exactly what the numbers are so take that with a grain of salt, but as a result for the very first time the protocol actually did do these uh these uh not surplus auctions, but debt auctions. Where mkr was minted.

B

um You know previously, there was like even less on care. I think there was like 980 k, but then black thursday happened and an additional 15, 000 mkr was was minted and and auctioned to cover the bad debt of the protocol, um and it happened and the system was battle, tested and kind of we lived to fight another day.

B

The liquidation system was upgraded and that that particular scenario can't happen if it was to replay today- um and ultimately, it just goes to show how how cool maker is with regards to like anti-fragility um but yeah. I just wanted to share that real life story of the surplus buffer burn and, like this whole mechanic that we're talking about in action, uh yeah with the hand up yeah.

D

Yeah just two things I mean of course, liquidations 2.0 is a lot better than the one we had at uh at this particular day, and I'm I'm quite confident that we are not going to see the situation again. However, it could turn out that at some point of time we have such a large market downturn that the liquidations will run at a loss for the protocol, and this is where the system surplus is for or the surface buffer is for. um So this is still something valuable in in this situation. Exactly.

B

D

And just one just one addition to lumping up the the surplus buffer, it basically gives a guarantee that the surplus buffer is increasing by the rate. We are putting it in the log, but this does not guarantee any kind of how much we are going to put into mkr burning. So if we face a large liquidation wave, a liquidation wave that is running good for the protocol, uh all the liquidation penalties turn into the system surplus as well, resulting in an over spill over the surplus buffer.

D

So we are going to have a lot more burning. um I think, with the with the current uh price point of npr, we're probably happy if this is going to happen, um but uh yeah. Sometimes I think when was it I think, on white wednesday we had something like I don't know a couple of millions of extra income um and by the time we we we are already in in lurking up the surface buffer, um but a lot of us said well.

D

This would be a nice opportunity to actually uh get ahead of our initial plan instead of burning um yeah. So it's it's. It's still quite a bit. I think it's still flaky the system we have right now. I think it's good from a governance overhead perspective, because I mean we have essentially six months time now to make up a plan how to proceed, because we are learning up over, I think, 30 weeks, um but we are going to end up in the same situation at some point of time anyway,.

A

I think uh peyton thank you tim. I think peyton's got his hand raised.

E

Yeah thanks so much yeah yeah. uh The only part I wanted to add was uh this connection to expenses as well right, it's not just for risk events, but uh when we decide to fund something in the protocol and if it's available in the surplus buffer, that's what will take the the hit for us. um You know a great example of this is like the oracle's latest budget, asking for for eight million right. If the surplus buffer is below that, then that simple expense would would result in an issuing new, mkr and selling.

E

um So that's an important other side too, but uh yeah really great uh factoids and run down there.

E

A

You thank you um very good feedback. Thank you. um Did we have another hand raised today, but was there? No someone else with their hand raised was that okay, all right well, two participants did.

C

Yeah, hey uh like I would just like to say something in regards to this surplus buffer learning, where I see that this can be problematic is basically like.

C

um If we have a situation where a lot of basically surplus increase comes from liquidation penalty, we will result in a lot of surplus auctions in the short time duration, and I think, like this is not really like something we want to see, because if we have a lot of surplus auctions at once- and maybe you know some kind of situation with clocked market, sorry blockchain and like high gas gas fees, you know like it can happen that you know some keepers will not be able to participate or something like this, and we can end up with something like really low beats uh for die.

C

C

So, like I don't know how how complex this is technically but like uh basically, what I think the potential solution is is that, um like proceeds from liquidation penalty would be stored in some kind of you know different account, and basically, uh with this, we would avoid this kind of sudden increase of the surplus buffer.

B

Yeah, I I think that that actually feeds into uh long for wisdom's, like old, old idea of like a surplus buffer distributor module, where it's not just one big pool of capital. That uh is, you know, being relied upon for all of these different concerns, uh and then you could like separate out the concerns that way. You know your risk buffer acts as an actual risk buffer, and then you know your protocol expenses are actually you know kept on the side protected.

B

You know, etc, etc. But I will uh shut up now because I see tim has it had his hand up and then um the other tim tim black uh put his hand up shortly after so I.

D

B

D

B

D

Than the other tim yeah.

E

So I think a more.

D

More sustainable solution to the situation that we have essentially not good running auctions on npr is not redistributing the liquidation penalties to something different, because actually it's good that we burn, um but to finally come up with a liquidation. 2.0 approach um called the the clapper. um That would be a lot better, because this would have the same effect as we are having with with volt liquidations. They were running bad one year ago or two years ago.

D

They are quite good now or super robust, actually, and the same will probably happen with mkr options as well. That's at least my bed.

A

Thank you tim uh yeah tim, like I think you had your hand up next.

F

uh Yeah, I just wanted to sort of um to plus one the flapper distributor idea.

F

I think one of the larger concerns for the surplus buffer is that it's one big pool right, whereas um I mean now granted there isn't like a dow model of this, but in a traditional company like you stuff, you separate your profits out into which investments you're gonna use for your, like cogs, et cetera, um there's been chats about it, but I think it would be it's more important now that we um think, through the mechanisms that we really want to prioritize for the protocol um and so to other delegate tim's point.

F

um I think, um getting moved to liquidations too. I think gonzalo already has code for this called clapper, which, if we post it somewhere in the forums- and it's definitely on discord, um would be one of the more important things to prioritize. But I think um we should definitely start to signal out like some sort of plan to basically upgrade the surplus buffer.

F

I think that's the sort of one takeaway I'd love for us to start to experiment with as a community is just recognizing that the burn combined with the buffer are definitely great mechanics that have served us to get to this point. But they're not going to get us to the next point we need to get to and we need to think through which features we need to be able to.

A

Have you know what what are our next steps? You know what.

B

Oh thomas, I think you're cutting in and out a little bit.

F

Oh, I thought it was me.

B

No, I think it's thomas.

F

Oh, no, we all have starlink.

B

I mean I could hear you perfectly.

F

D

Here as well, okay.

F

Yes, cool yeah, so I guess I'm just coming from more like a product, an engineering angle, it's like okay cool. What are the parameters we have now like? What are the inputs and parameters we need in the future? Let's like prioritize the ones that are most realistic right to tim's point like getting clapper up seems like it makes more sense and it's already kind of semi-coded and then from there. We need to figure out. Okay.

F

Do we want to actually pursue a distributor so that it doesn't have one pool of capital that a bunch of different interests are pulling on? Okay, then? What does that look like and actually map that out from there? That's it.

B

Yeah, hey thomas, it looks like you're back, you uh disconnected there for a second, and the slides are no longer being shared. Just like that, you did.

A

I sure did sorry about that. Give me one second place outpost.

A

Is everybody able to view that the slide? Okay? Sorry about that.

B

Yeah, but basically uh tim black, like your point, was that you hope as a result of this call, we will like fall uh or kind of all sync on what some next steps are and what you believe. Our next steps are really kind of upgrading our uh our revenue management, essentially right.

F

Yeah, that summarizes it well.

A

A

All right tim, you still got your hand raised, is: um does anybody else? Have any uh comments or questions surplus buffer?

A

All right? Wonderful! Well, that's good! Let's, uh let's move on to, I know: we've we've gotten a lot. We've talked about the burn talked about the buffer. um This is a few minutes here, just wanted to anyone that has been thinking about questions and haven't, had a chance to raise their hand or comment um just want to give a few minutes here. If anybody have any other additional thoughts comments about the topic today, so I will just open the floor and see if anybody's got anything else to add.

B

I guess my question is like I know. Historically, it has been like uh community ogs that have been really like driving forward next steps on a lot of stuff at maker, like especially tim schuperner around surplus buffer. uh You know votes, I'm curious. You know to get a core unit to pick this up and prioritize it uh kind of what has to happen and and who is like, should I guess my question is like who in the community should be putting forward these like directional um uh proposals like? Should it be recognized delegates?

B

Should it you know, should it be anybody in the community? Should it be like core unit facilitators and leaders themselves, um yeah curious about people's views? There.

B

Yeah peyton says governance says anyone with a good idea. Yeah, it's true.

F

Yeah, I was going to say that there's sort of um I don't want to sound obstructionist but there's sort of a tyranny of structurelessness. In that question, where it's like, if it's everyone's responsibility, then no one does it um that's kind of why I was pushing to some some sort of like wrap-up post, where we have some level of takeaways, and some of us can say all right.

F

I want to own this, or at least work with, like a couple of other people, to push these initiatives forward, because you know this isn't the kind of thing that gets solved in a month. This is like two quarters, at least of, like thinking and and planning stuff through it's it's literally central to the whole system right.

F

So um it's gonna need a lot of input and uh work, but I think the whole point of these open calls is to stimulate the community to sort of think through what ideas they want to bring forward and then also to sort of think through and flush through the options, just like the governance and risk all right like we don't make decisions on that call. We think through the next steps right, so anyone with a good idea, I guess.

A

Yeah tim, I think you, I think you summed it up very well there as that's the you know, the intent of this is to bring those issues forward and and that that will lead us into our last topic today, but before we do that, I just wanted to get just get anybody else that had any more thoughts or feedback before we move on to our last little piece here.

A

Okay, so tim did already uh move us forward, which is shaping future topics, and so, as he pointed out, our intent again is to do research through the forum through the signal requests through what is a pertinent topic, a timely topic that we really should have a open discussion about bringing up points. The current state, where we're at where we want to go and, more importantly, being able to walk away, saying: okay, we've got a follow-up little plan of action here.

A

Clearly from what I'm hearing today, it's been, you know a very good conversation with the surplus. Buffers really triggered a lot of conversation um to identify all right. What's this longer term solution, who's going to be the responsible party? What should be a follow-up to that and given given that, um if you can think of a future topic- and we want this to be- um we want this to be your platform. We want this to be something that we look at for a future topic right now, we're just in that process.

A

For today's topic, we thank you tim um for you know your your signal, request and, and everything that really helped us identify something that I think is is very very relevant to um company. But what about the next one? You know we'll we're we're going to aim for these to try to be at least monthly, but we want to. We want your feedback, uh we're still uh looking at.

A

What's the most appropriate way to get that feedback or hey, I've got a topic or I've got a signal request or I've got something I really want to push forward.

A

I just want, in this section, to ask um everyone what what are your thoughts for shaping future topics? I've, given my sort of two cents, it is no wrong or right answer. um There is just an opportunity for us, and I think I will let david take it from here to kind of help- maybe drive this a little bit further david.

B

Yeah, I just want to frame it just a little bit. uh I want to give just some additional context, so uh we also have our thursday governance and risk call that we've recently transitioned to um using as a more discussion-based call uh calls we typically uh work with the mandated actors.

B

uh Every tuesday we have a meeting and- and we kind of pick through a list of you- know current events and topics and we decide you know what is the most kind of pertinent issue that we could discuss this week and oftentimes, like those discussions, are really great and they're enough, but the benefit of having like this particular issue discussion call series is that we want to produce, uh and then we are producing a lot, a lot more detailed sort of like pre-call notes, um contextual information we want to like have uh more.

B

uh I guess uh com committed buy-in for like participation from particular stakeholders that are, you know, relevant to the issue um and so yeah, even beyond suggesting topics. For this specific call. I am curious what people in the community would like to see for how they can request uh discussions, because at the moment um they really are driven by, like you know what we see on on the forum as being like the most important stuff, uh we don't really have a huge amount of feedback uh from kind of the general community about what what's?

B

What discussion topics are relevant.

A

Yeah david to that point, it's it's not necessarily an information session too. This is, um you know, a discussion about a topic that we want to. Try to. You know move forward, or you know, like you, said, talk in more detail about, and so all right floor is open.

A

F

First, um so I think, what's what would be most useful is to look at the tools you have necessary to like um assemble the information around the hot topics of the the community or the ones that really need unpacking um and I'd greatly sympathize with your guys's job, essentially because you essentially have to do all the leg work to come towards like making a decision together as a community and then taking making sure the community takes those next steps. So it's not exactly an easy thing, but some ideas are different.

F

Definitely like leveraging, probably discord- and um I know gov alpha has like this anonymous question box thing, so uh some level of like pulling people together or trying to hold stages on discord or put some sort of community energy there.

F

So it's easy and quick for people to sort of put their opinions in might be quite helpful and then leaving some room for the anonymous members of our contrib of our community to continue to push us forward and hold us to the fire uh to add their opinions in but again, that's just gonna add a little bit more to your plate to have to source and put together everything and frame it into what actionable decisions can we make together? So those are our two thoughts.

A

Great, thank you uh tim. You had your hand raised.

D

Yeah, it's just well a bit selfish, probably because um well what I would really uh think about, or talk about and get information about is um I mean we have delegation now up for I don't know two months three months or something like this: uh do we actually have a proper system of? I don't know delegates? Are they approachable by the people who are were previously haven't, voted or have voted and all started delegating?

D

um Is this uh transparent enough? Do we have enough communication between delegates in the community? uh Do we need maybe some kind of tools like I don't know, town hall meetings or whatever I mean I'm going to run in my my first office hour uh meeting tomorrow um as a delegate? Is that something helpful? I don't know stuff like this?

D

I just have no idea what we need here and I I guess we have a nice situation because we actually have people now that have voting power and are approachable, but I don't think we leveraged that enough.

D

um So I don't know. Maybe that would be something for a for an hour of talking with with people who have ideas. That would be.

A

No, that's great, and you know I can see you can dm us, you can uh shoot us uh information or it and and everyone on the call too, if you walk away from the call- and you go oh, I should have mentioned please by all means uh get in touch with us. We want to.

A

We want to hear your thoughts, because this is how this is how we will be able to build this and to a very strong discussion, and I think today's discussion was very value added and and certain in the terms of coming walking away from it and thinking about you know these longer-term solutions uh for the surplus buffer, especially so um any any other thoughts. I know we're just being mindful of time we have about five minutes left, so I wanted to see if anybody had anything else to add.

B

Yeah tim actually makes uh tim black makes a great point in the chat.

B

uh He says it also might be helpful to think through a longer term sort of cadence for recurring topics uh or difficult topics so like, for example, right like how is the delegate system working like this is something this is like a domain of a maker that is evolving right, like it just launched, and you know it launched without compensation, and now it has compensation, and now we have like instead of three delegates we have like, maybe like seven or eight, and- and you know that's the case now, but uh six months from now it might be a totally different conversation and so yeah.

B

I like that whole concept of recurring sort of um about chronic issues, because that's the wrong characterization, but recurring discussions on um on ongoing sort of matters like I don't know issues, because it's not really an issue like delegation is like using delegation as an example. It's like working right, there's, not an issue. The issue is like: how do we make it better right? um So yeah.

F

And and more importantly- oh sorry, thomas my bad yeah.

A

No just two seconds and that's a great that's a great thought pattern to have. Is that and we're talking about surplus buffer today, but we're not going to we're not going to not talk about it anymore. I think that that's a great thing to consider as we continue to develop these is to revisit them when they, when you know, if we're talking about a long-term solution for surplus surplus buffer, you know, maybe over the summer, maybe there's something that we need to. uh You know consider as a long-term discussion topic.

A

You know and um so yeah great point.

F

I think that summarized it up quite well, uh and I think that would be actually a really great service to the community and david's correct they're, not particularly like issues they're. Just sort of these are the complex topics with a lot of stakeholders that all have opinions about how to move forward, and we all want the same thing so just aligning around some set of expectations and direction, I think, would be the most useful thing for those long-term topics.

F

You know say by six months: we want to have x decision plus like y variables on the surplus buffer right, which sets up the next series of conversations, or it actually goes to pe to come back with their estimations right. This is a very crude example, because there's no way it's going to be that simple, but we might be surprised which ones turn out to be a little easier than we think and that's why I've framed it that way.

B

Yeah, I agree, and it's also like a tool to refresh uh stagnant conversations that might still be important, they're just stagnant, because it's like okay, all of the views were shared, there's not really much progress to be made. It's just a matter of uh timeline and next steps, and you know whoever are the actors who need to take action on execution. They got to do that so yeah using these calls, also, as as as like a ref refreshing of old conversations or um reassessment of old, uh but ongoing matters, yeah, that's uh interesting perspectives and.

A

Just as a reminder, um you know if you've got anything else that you want to add to this or please dm us or please give us a contact. We are now at 12 59. I know everybody has a busy schedule. They want to be mindful of it. I think it was a great conversation today. I thank everybody for attending.

A

Please keep your eyes appealed for january's issue. Discussion call uh we'll be having that out here in the near in the near future, but I think oh tim, you want you've, got your hand raised. You got one last comment. Please.

D

No, I was clipping thank you for setting this up.

A

Oh yeah, well I I thank my team for helping uh put all this together and you know just uh we work together to try to you, know, bring the community together be engaged, and I think today's conversation was uh was really good, a pertinent topic and I can't wait for the next call. I can't wait to follow up and see how this goes from here, but again. Thank you all for your time.

A

This is recorded and also, if again last thing we're here to here to help here to listen, and I hope you have a great rest of your day. Thank you all for joining.

A