►
From YouTube: Maker Explorer #1 | Real-World Sandbox Grant Report
Description
This new series will serve as a looking glass into the different actors, credit types, and funding structures in the lending stack of TradFi as Dai determines it’s role in bringing real-world assets to DeFi.
For the first session, Luca Prosperi (@luca_pro) will be presenting his final report from a SES funded research grant - Real-world Sandbox: A comprehensive framework to turbocharge Maker’s efforts to attract real-world finance.
B
A
A
contributor
from
the
sustainable
ecosystem
scaling
core
unit
and
I'm
also
joined
by
juan
our
facilitator.
Today
is
the
first
episode
of
maker
explorer
where
we'll
be
exploring
for
lack
of
a
better
term
topics
throughout
the
maker
ecosystem,
and
today
we're
focused
on
real
world
assets.
We're
joined
by
luca
the
team
project
lead
from
project
real
world
sandbox.
To
present
his
grant
report
from.
C
D
The
third
presentation
we
had
on
the
topic
so
apologize
to
those
that
joined
previous
presentations
if
we
are
repeating
something,
but
the
ambition
of
this
presentation
was
to
be
more
detailed
and
more
comprehensive
in
what
what
we
have
been
doing
in
the
last
few
weeks.
So
we
started
five
weeks
ago,
an
effort
backed
by
scs
to
let's
say,
turbo
charged
the
initiatives
we
had
in
the
space
of
reward
financing,
and
we
called
the
project
rearward
sandbox
that
the
project
itself
had
five
objectives.
D
D
For
the
sake
of
the
discussion,
we
put
here
a
very
high
level
overview
of
how
the
landing
stack
works.
So
when
you
go
to
a
bank
as
a
borrower,
you
don't
know
this,
because
everything
is
integrated
behind
behind
the
curtains
of
the
bank.
So
if
you
are
a
borrower,
you
ask
for
a
loan.
The
bank
underwrites,
the
loan
I.e,
tries
to
understand
what
is
the
risk
you're
having
and
what
type
of
interest
rate
they
should
charge
you
and
they
retain
this
loan
in
their
in
their
books
and
wait
for
you
to
repay.
D
If
you
don't
repay,
they
might
do
some
actions
in
order
to
force
you
to
repay
or
maybe
take
over
the
collateral.
In
case
there
is
a
collateral,
for
example,
in
the
case
of
a
mortgage,
a
house.
Now
this
this
set
of
activities
can
actually
be
split
into
several
elementary
activities
and
when
you
go
into
the
institutional
wholesale
landing
space,
those
activities
are
often
often
conducted
by
different
actors.
So
you
have
a
borrower.
The
borrower
is
interfacing
itself
with
an
originator.
D
The
originator
is
the
person
or
the
interest,
the
platform
that
actually
deals
with
the
relationship,
the
originator.
Sometimes
underwrites
the
the
the
loan
I.e
tries
to
understand.
If
you
have
a
good,
if
you're
a
good
risk
or
a
bad
risk
and
how
much
you
should
pay
in
terms
of
interest
rate,
somebody
else
sometimes
structure
structures,
this
loan
and
sends
it
to
investors
and
investors
can
be
of
different
kinds.
D
So
the
same
loan
can
actually
be
tranched
into
different
into
different
liens,
a
first
loss
trench,
which
is
higher
risk,
but
also
gets
higher
than
gets
a
higher
return,
a
senior
tranche,
a
super
or
a
man's
french
or
super
senior
trench
and
so
forth
and
so
forth,
and
on
there
on
on.
In
parallel,
there
are
a
set
of
services,
so
companies
that
don't
necessarily
take
any
risk
but
help
the
whole
the
whole
structure
the
whole
structure
to
work
smoothly.
D
So
the
first
question
that
we
wanted
to
ask
ourselves
was:
what
type
of
lender
should
make
her
be?
Should
maker,
be
an
integrated
lending,
I.e
like
a
bank
like
you
go
to
maker
and
maker?
Does
everything
behind
the
behind
the
scene
or
should
make
her
be
a
bit
more
of
a
passive
passive
lender?
That
leaves
the
rest
of
the
ecosystem
to
organize
itself
in
order
to
access
access
maker
as
a
as
as
a
source
of
financing,
and
let
me
just
go
okay,
so
these
were
the
two
things
we
wanted
to
ask.
D
As
I
said
before,
what
type
of
credit
maker
should
finance
should
interface
itself
with,
and
how
may
should
make
her
structure
itself
to
do
this
appropriately
over
the
course
of
the
lifespan
of
the
loan?
So
if
we
go
to
pillar
one,
so
what
type
of
credit
may
should
make
her
should
make
her
finance?
We
had
a
few
questions
we
wanted
to
answer.
We
we
tried
to
answer
in
the
report.
D
If
we
can
finance
it
very
clear
in
our
mind,
and
we
have
a
framework
of
that
describes,
what
type
of
counterparties
we
can
we
can,
we
can
interact
with
so
the
first
point,
so
we
we
try
to
answer.
We
gave
an
an
answer
to
those
to
those
questions.
Preliminary
answers
to
those
questions
in
the
report
up
for
discussion,
but
I
think
these
these
answers
are
very
important
because
they
set
the
scene
for
what
we
think
should
be
the
activity
maker
for
the
next
years.
D
The
first
one
is-
and
I
stop
guys
for
question
after
this-
but
the
first
one
is-
we
think
makers
should
be
the
ultimate
lender
of
the
stack.
What
does
it
mean?
We
think
makers
should
be
much
more
similar
to
what
a
central
bank
is
rather
than
an
investment
bank.
So
a
central
bank
gives
financing
to
banks,
but
it's
very
conservative,
so
they
will
give
they
will
accept
for
for
as
collateral
pledge,
only
the
most
resilient
types
of
collateral
that
you
can
pledge.
You
can
repo
to
the
central
bank.
D
They
will
give
financing
almost
for
free
or
actually
for
free
nowadays
to
banks,
but
only
big
only
because
that
that
collateral
is
super
safe
and
it's
structured
in
a
super
safe
way.
I
think,
may
we
think
makers
should
be
much
closer
to
this
than
a
than
a
investment
bank
that
actually
looks
for
maximizing
their
profit.
That's.
D
We
think
this
is
much
more
consistent
with
the
underlying
ambition
of
maker
of
expanding
the
footprint
of
the
die
in
a
very
sustainable
way,
protecting
the
pack.
How
so,
what?
How
does
this
translate
into
reality?
There
are
a
set
of
type
there's
several
types
of
credits
out
there.
Some
credits
are
better
than
others.
D
For
this
mission
it
doesn't
mean
that
we
should
only
do
this
type
of
credits,
but
it
means
that
it's
easier
to
do
this
type
of
credits-
and
these
are
credits
that
are
very
standardized-
are
regulated,
have
short
short
duration,
good
turnover,
good
liquidity
in
the
secondary
market.
If
something
goes
well,
we
have
identified
a
certain
underlying
credit
that
has
this:
have
these
characteristics:
corporate
loans,
short-term
corporate
loans,
consumer
loans
in
regulated
markets,
loans
are
intermediated
by
banks,
for
example
like
the
closer
to
the
social
mix.
But
again
this
is
not
necessarily.
C
D
These
are
credit,
types
are
very
attractive
and
other
credit
types
should
mimic
the
same
characteristics
through
structuring
and
the
third
point.
The
third
point
was
about
country
parties.
What
type
of
counterparties
we
should
we
should
work
with.
We
identified
a
set
of
characteristics.
We
should
we
should
score
counterparties
against,
and
then
we
identified
a
set
of
structures
that
are
actually
compatible
with
what
we
want
to
do
and
in
the
presentation
you
can
see
a
long
list
of
the
characteristics
of
the
credit
types
we
scored
agreed
types
against
again.
D
I'm
not
gonna
go
through
these
in
detail,
because
these
are
in
the
report
and
a
set
of
characteristics
that
we
should
we
score
the
counterparties
against.
So
is
the
counterparty.
Has
a
good
history
track
record?
Do
they
have
skin
in
the
game?
Are
they
regulated?
Where
do
they
operate?
How
big?
They
are,
how
good
they
are
providing
data,
etc,
etc.
D
The
ultimate
conclusion
of
this
is
a
set
of
eligibility
criteria
that
we
think
makers
should
have
very
clear
and
maintained
when,
when
dealing
with
win
counterparties,
so
a
very
clear
set
of
requirements
that
are
public
and
should
also
guide
counterparties
that
want
to
get
financed
by
banker.
So
I
think
this
is
the
ultimate.
This
is
the
the
most
powerful
tool,
a
tool
that
if
we
are
credible
enough,
it's
self-fulfilling
for
the
counterparts,
counterparties
that
want
to
access
the
scope.
D
D
This
report
has
been
already
discussed
with
a
few
people
out
there.
A
few
people
that
are
also
are
also
in
the
call-
and
you
will
see
the
names
on
the
front
page
of
the
report,
but
these
were
these
are
token
holders
person
people
like
that
are
that
are
fundamental
in
in
the
in
the
community,
like
rooney
himself,
potential
counterparties
of
people
that
have
been
discussing,
discussing
and
interact
with
maker
like
matt
from
success
or
the
guys
at
centrifuge
or
or
or
jason
jones,
etc.
A
E
D
So
I
think
there
is
actually
there
is
actually
table
in
the
report
that
does
the
comparison
of
the
the
probability
of
default
that
we
had
in
mind
with
with
the
ratings
and
you're
right.
So
what
we?
What
we
have
in
mind
are
credit
types
that
have
that
have
a
probability
of
default
over
one
year
below
or
around
one
percent,
and
this
translates
to
investment
grade
so
triple,
b,
triple
b
type
of
credit.
D
When
we
did
this,
when
we
did
this,
we,
what
we
tried
to
do
was
to
mimic
what
what
central
banks
are
are
are
trying
to
avoid,
because
I
think
we
shouldn't
be.
We
shouldn't
be
too
far
from
the
top
that
type
the
type
of
risk
and
we
have
a
similar
cost
of
capital.
So
I
think
we
shouldn't
be
too
far
from
that
type
of
risk.
Obviously
we
can
be
more
less
restrictive
because,
because,
like
we
need
to,
we
need
to
work
with
the
parties
that
are
not
necessarily
so
standardized.
B
D
B
D
Thanks
faith
and
I
think
that's
a
great
question
and
it
it
is
a
is
it's
a
great
timing,
because
this
is
what
the
second
part
of
the
presentation
talks
about.
So
I
think
in
the
first,
the
first
part
of
the
presentation
we
wanted
to
communicate
our
view
as
a
working
group
or
what
we
think
could
be
should
be
the
direction
for
maker,
and
I
think
this
is
a
very
important
philosophical
point,
because
it
it
puts
sustainability
and
expansion
ahead
of
profit
maximization,
and
I
think
in
transparency.
D
I
had
a
profit
maximization,
which
is
a
very
important
point
that
not
not
necessarily
everybody
agrees
with,
but
that's
why
we
wanted
to
float
the
idea
with
you
guys
and
for
the
consultation
phase.
The
second
part
of
the
presentation
is
about
process,
so
how
we
thought
could
be
a
process
structured
within
maker
to
deal
with
all
those
with
all
those
decision,
decision
points
and
collaborate
with
with
the
counterparties.
So
if
there
are
not
other
questions
I
can
go,
I
can
go
to
the
process,
but
I'll
stop
here
for
a
second.
F
Yeah,
I
have
a
question:
what
would
you
do
with
the
german
map?
6
an
approved
and
live
well
asset,
excluding
a
sergeant
that
is
a
bit
different,
that
would
not
be
investment
grade
from
credit
trading
agencies
and
that
implicits
implicit
probability
of
default
above
one
percent
as
most
have
stability
above
two
percent.
B
C
B
D
Because
I
think
what
we
have,
what
we
have
in
mind,
as
doesn't,
doesn't
have
any
official
backing
from
governance
at
all,
and
I
think
at
the
end
well,
and
we
will
go
through
the
process
later,
and
I
think
I
hope
we
will
answer
those
questions.
I
think.
At
the
end,
there
is
no
delegation
of
power
we
we
are
expecting
and
the
power
of
decision
stays
with
mkr
holders.
D
Those
communities
would
probably
provide
their
own
view,
which
is
obviously
non-committal,
but
then
it
will
be
the
maker
nuclear
token
holders
that
will
decide
whether
they
want
to
proceed
with
the
approval
or
not.
Now,
hopefully,
our
ambition
would
be
to
have
a
coherent
perspective
from
by
all
the
real-world
finance
core
units
involved,
and
that
would
give
us
a
single
message,
a
coherent
message
to
the
community,
but
obviously
we
cannot.
D
D
You
know
you
can
reduce
risk
through
a
lot
of
a
set
of
mechanisms,
so
you
can
transform
a
risk
that
has
a
probability
of
default
of
two
or
three
percent
to
a
risk.
That
is
probability
of
default
of
one
percent.
Sometimes
it
is,
for
example,
an
inclusion
of
another
tranche.
It
is
a
different
structure.
D
Liquidations
are
not
great,
but
liquidations
can
be
managed
in
a
very
systematic,
systematic
way
and
most
of
the
times
are
actually
source
of
profit
for
the
protocol
in
the
world
of
tread
fi,
especially
with
the
bridge
that
we
are
creating
now.
My
view
is
that
liquidation
events
should
be
black
swans.
It
doesn't
mean
that
we
don't
know
what
to
do
when
they
happen,
because,
obviously
we
need
to
be
ready,
but
they
should
never
happen
because
one
thing
is
a
default
that
requires
a
restructuring,
but
a
liquidation
event
is
cumbersome,
complicated,
costly
and
untested.
D
That's
why
I
think
we
should
position
ourselves
to
have
those
events
as
black
swans,
I.e,
living
living
returns
on
the
table,
but
protecting
ourselves
again.
This
is
my
personal
view.
It's
not
the
community's
view,
but
I
think
we
should
try
to
do
this.
We
should
try
to
enforce
this
as
much
as
possible.
E
Yeah
thanks
one
question:
so
most
of
the
assets
considered
here
are
not
standalone
investment
grade.
You
know
if
I
have
one
single
home
mortgage
or
one
small
business
loan
and
so
they're
going
to
need
to
be
structured,
typically
in
a
pool
with
a
bunch
of
them
and
then
with
a
a
decent
sized
tranche
of
sub-debt
or
equity,
underneath
them
any
thoughts
on
where
those
other
capitals
would
come
from,
because
this
is
not
an
insignificant
portion
of
capital.
D
D
We
might
see
we
might
see
intermediaries
coming
with
a
bond
structure
with
some
additional
collateral
planche
like
the
case
of
core
bonds
or
spv
structures
where
we
have
bankruptcy.
Remote
vehicles,
where
maker
would
provide
liquidity
in
exchange
for
a
credit
link,
note
or
or
some
type
of
some
type
of
loan
or
or
a
revolving
facility
to
trust
structures,
etc,
etc.
Now,
I
think
your
point
is:
it
is
very
important.
D
If
we
reach
the
right
counter
parties
with
this
message,
they
will
organize
themselves
and
raise
capital
and
consider
maker
as
an
extra
as
an
additional
pool
of
capital
that
can
access
to
reduce
their
cost
of
capital
for
those
structure.
But
I
think
this,
hopefully
the
education,
the
education
phase
will
be
will
be
painful
at
the
beginning,
because
there
will
be
a
lot
of
talking
a
lot
of
writing.
But
I
think
once
once
the
message
has
been
passed
through
a
set
of
hopefully
successful
mid-sixes.
I
think
the
message
is
very
powerful.
E
D
Yeah-
and
I
I
always
stress-
and
I
wrote
this
in
one
of
the
last
pages
of
this
presentation-
that
the
way
we
saw
this
this
report-
it
it's
not
like
us
in
you-
know,
in
a
civil
in
civil
code
like
we,
we
were
not
aiming
at
producing
a
200
pages
super
comprehensive
report
that
is
very
difficult
in
in
you
know
in
applying
being
applied.
We
wanted
this
report,
hopefully
to
work
as
a
course
as
a
set
of
constitutional
principles
in
a
common
law
system.
What
I
mean
is
the
president's
ie.
D
The
six
applications
that
will
be
rejected
and
approved
will
be,
will
act
as
the
most
powerful,
the
most
powerful
guideline
for
future
applications.
So
these
are
a
set
of
principles
that
I
agree
with.
You
will
be
very
powerful
if
they
are
published
to
the
outside
world,
but
then
the
most
powerful
precedent
to
understand
how
things
should
be
done.
Are
the
myths
themselves
right?
D
Okay,
so
the
second
quest,
the
second
part
of
the
of
the
of
the
report,
actually
deals
with
the
process.
So
we
we
wanted
to
ask
ourselves
how
we
can
structure
ourselves
internally
and
disability
counterparties
to
originate
and
monitor
real-world
collaterals
appropriately.
So,
first
of
all,
we
wanted
to
make
sure
that
we
faster
we,
we
incentivize
a
culture
of
healthy,
decentralization
meaning
without
replicating
too
many
roles
and
just
sharing
responsibilities
across
across
the
town.
D
This,
in
order
to
avoid
also
single
points
of
failure,
as
we
know
well
in
a
decentralized
community,
social
capital
and
trusts
go
a
long
way,
but
they
naturally
tend
to
integrate
and
within
within
certain
groups,
a
lot
of
responsibilities,
because
people
want
to
get
things
done
and
the
community
trusts
them.
But
we
want
to.
D
D
D
This
business
proposal
and
this
business
proposal
goes
to
maker
now
this
sometimes
this
whole
stream
could
be
integrated
in
one
kind
of
one
single
agent
like
in
the
case
of
sojourn,
for
example,
that
came
forward
with
like
a
fully
comprehensive
mipsix
that
might
be
satisfactory
or
not,
but
they're
coming
with
the
package
ready
or
sometimes
there
might
be
an
arranger
that
puts
everything
together
all
the
pieces
together,
they
know
maker
and
they
just
come
forward
and
they
present
they
present
the
application
to
maker.
I
think
I
think
makers
should
be
agnostic.
D
D
Years
time,
three
years
time,
we
might,
we
might
see
standardized
structures
emerge,
but
this
is
not
necessarily
the
case
today,
but
once
the
once
the
mipsix
is
submitted.
I
think
the
most
important
part
starts
and
that's
why
what
we
tried
to
design
in
the
report,
so
we
thought
about
a
process,
an
onboarding
process
that
is
multi-tiered.
D
What
does
it
mean?
Let's
say
that
a
mipsix
is
submitted,
the
mistakes
is
submitted
and
we
might
have
a
set
of
one
or
more.
We
call
portfolio
core
units
that
interact
with
the
counterparty
to
analyze
the
mipsticks.
Why
we?
Why
do
we
have
more
than
one
coordinate,
because
we
thought
that
coordinates
should
be
very
specialized
in
certain
types
of
risks,
the
same
person
that
who
knows
how
to
underwrite
real
estate?
D
Prime
real
estate
in
california
has
no
clue
on
the
risk
of
consumer
credit
in
nigeria
or
of
bank
bank
backed
corporate
bonds
in
in
europe.
So
we
thought
we
thought
of
a
set
of
portfolio
core
units
that
are
very
specialized
and
very
nimble
and
very
small
and
certain
types
of
risks,
but
those
core
units
will
be
the
one
that
just
come
forward
discuss
with
a
counterparty
analyze
the
analyze,
the
the
proposal
based
on
the
core
principles
they
might
be
hopefully
backed
by
a
legal
support
core
unit.
D
These
are
not
internal
lawyers,
but
this
this
would
be
the
legal
counsel
of
makers.
So
the
person
who
knows
legalese
who
knows
how
to
interact
with
external
counsel
or
external
legal
counterparties
in
the
same
way
that
it
happens
in
a
in
a
bank
or
in
a
fund,
the
internal,
the
internal
legal
team,
doesn't
take
any
bigger
risk,
but.
D
Who
speaks
the
same,
the
right
charge
now
this
this
level
interacts
their
activity,
counter
party,
analyzes,
analyzes,
the
the
application
and
and
comes
forward
with
a
view.
The
view
is
not
obviously
approval
or
rejection,
because
the
power
stays
at
the
level
of
token
holders,
but
is
a
view,
is,
is
a
qualified
opinion
on
whether
the
the
term
that
has
been
discussed
and
has
been
negotiated
is
satisfactory
not
for
maker.
D
Then
you
see
a
second
level
that
we
call
the
compliance
unit.
The
compliance
per
unit
is
the
it
is.
The
regulator
is
the
regulator
is
the
controller
of
the
controllers?
Let's
put
it
like
that.
The
compliance
per
unit
doesn't
interact
with
the
counterparties,
but
they
they
they
will
provide
a
qualified
opinion
on
whether
the
process
the
portfolio
unit
has
followed
is
compliant
with
the
view
of
maker.
So
it
doesn't
matter
they
don't
have.
They
are
completely
agnostic
on
the
underlying
collateral
encounter
party,
but
they.
D
D
If,
if
the
title,
if
the
type
of
credit
risk
that
has
been
considered
as
compliant
but
the
portfolio
community,
underneath
is
not
what
percent,
but
it's
two
three
four
five
percent
or
is
structured
in
a
different
way.
The
compliance
per
unit
will
probably
say
that
this
level
of
credit
risk
is
not
satisfactory,
based
on
the
eligibility
criteria
that
have
been
voted
by
the
community.
So
it
is
a
second
level.
Second
sets
of
eyes
that
makes
sure
that
everything
is
compliant
and
also
will
be
particularly
important.
D
In
my
view,
fast
forward,
who
knows
how
many
years
the
fight
goes
very
fast,
the
compliance
screen
unit
will
be
the
only
one
remaining
within
the
dow
and
the
rest
will
be
pushed
out,
but
the
compliance
for
unity
will
be
very
standardized,
very
parametrical
and
and
very
bureaucratic.
Let's
say
in
order
to
take
to
see
whether
all
the
boxes
have
been
taken.
Now
the
compliance
community
will
still
publish
an
opinion,
but
ultimately
the
power
to
accept
or
reject
a
proposal
is
still
in
the
hands
of
the
token
holder.
So
there
is
no
mandate.
D
There
is
no
delegation
of
power.
Now
the
delegation
of
power
going
back.
This
is
a
bit
more
detailed,
but
very
important.
Point
delegation
of
power
going
back
to
eric's
point
might
be
within
certain
certain
how
to
say
boundaries,
but
I'll
make
this
example
later
to
make
not
to
yourself
guys,
but
in
the
following
page,
we
we
draw.
We
drafted
at
high.
D
D
D
It
would
be
impossible,
you
don't
you
you,
there
is
some
type
of
pre-approval
required
and
this
always
happens
in
the
credit
market.
What
we
call
it
in
the
current
market
is
forward
flow
approval,
so
a
counterparty
comes
and
say
I
have
this
view.
I
want
to
provide
you
credit
within
certain
certain
characteristics
that
are
very
parametrical.
D
Would
you
give
me
a
line
and
the
and
the
lender
would
say?
Yes,
I
give
you
a
line
subject
to
certain
requirements
and
up
to
10
million
dollars,
12
million
dollars
1
billion
dollars,
the
county
party
doesn't
need
to
come
back
and
ask
for
approval
for
every
single
for
every
single
credit
and
enters
this
bucket
enters
this
overflow.
D
If
it
stays
within
the
bankers,
the
only
thing
they
need
to
do
is
provide
transparency
that
about
what
they're
doing,
because
if
what
they're
doing
is
outside
the
mandate,
then
the
lander
needs
to
have
the
power.
The
lander
of
some
sort
needs
to
have
the
power
to
stop
the
flow
or
liquidate.
What's
on
liquidate,
what
is
not
compliant
or
to
do
something?
They
take
some
remember
some
some
action
now.
D
This
is
very,
very
important
because
I
think
the
type
of
credit
that
we
would
like
to
see
maker,
which
is
short,
lived
and
very
standardized
with
a
high
churn
and
very
liquid,
will
naturally
just
be
financed
and
refinanced
and
repaid
all
the
time.
So
I
think,
having
a
clear
mandate
with
a
for
the
forward
flow
of
credit.
D
So
I
think
I
think
this
goes.
I
this,
I
think,
peyton.
Hopefully
this
answer
somehow
your
question
and
the
last
point
that
I
think
might
be
useful
to
answer
your
question:
is
these
principles?
Actually
there
is
another
point
that
is
very
it's
very
important.
This
principle
principles
of
good
governance
that
we
have
we
have
discussed
here
in
our
view,
would
have
to
be
sorry.
D
Let
me
go
back
here,
so
this
principle
that
we
have
discussed
would,
in
my
view
they
need
to
be
voted
on
chain,
meaning
that
there's
need
there
needs
to
be
a
very
strong
monday
for
these
principles
by
the
community.
How
this
would
work,
in
my
view,
but
again
I'm
just
putting
the
idea
on
the
table
and
hopefully
somebody
will
disagree
and
propose
a
better
idea.
I
think
there
are.
There
is
one
element
missing
here
in
this
framework
and
is
the
existence
of
the
compliance
community.
D
D
If
the
compliance
per
unit
will
be
incubated,
we'll
ask
for
will
ask
for
for
a
monday
within
that
mandate.
We
should
encapsulate
these
core
principles
that
we
have
discussed
here
in
short
form.
I
think
this
will
give
a
very
strong
monday
to
the
compliance
core
unit
that
they
they
can
go
out
and
do
their
job,
and
the
community
agrees
with
agrees
with
the
with
with
the
principles.
A
C
Yeah,
so
I
I
just
just
had
a
question
you
you,
you
talked
about
the
the
first
line,
the
first
line
of
actually
oversight,
which
is
essentially
the
what
I
mentioned
here
is
the
portfolio
portfolio
core
units
rights
with
yeah.
I
think
in
the
next
yeah.
So
in
that
level,
where
you,
where
you
have
like
the
counterpart,
is
interacting
with
the
portfolio
core
units
to
assess
and
give
give
their
recommendations,
and
then
you
have
like
the
compliance
core
unit
as
the
second.
C
I
guess
I
don't
know
if
you
use
the
term
line
of
defense-
and
I
was
my
question
was
more
like
do
we
are
we
also
assuming
that?
Actually,
there
is
an
actual
prior
line
of
defense,
then
actually
the
portfolio
coins
themselves,
which
is
call
it
the
arranger
or
all
the
counterparties
actually
themselves,
which
actually
understand
very
well.
C
Actually,
the
credit
risk
that
they're
bringing
to
the
table
and
therefore
actually
do
some
of
the
heavy
lifting
which
then
kind
of,
I
think,
creates
efficiency
in
the
system
if
they
do,
but
does
that
actually
does
your
framework
actually
contemplate
that
first
line
of
defense
coming
from
the
intermediary
themselves?
The
pass-through
agent-
let's
say
like
that,.
D
D
But
we
think
that
the
first
line
of
defense
should
be
outside
of
the
dial,
because
if
we
go
back
to
the
example,
if
we
go
back
to
the
example
of
the
forward
flow
approval,
we
did
before
we
would
delegate
implicitly
some
under
the
underwriting
authority
to
an
external
counterparty,
because
the
external
counterparty
will
have
a
mandate.
But
then
they
will
be
the
ones
scoring.
B
D
Risk
now
the
reason
there
is
an
element
of
monitoring
and
shadow
rating.
Let's
say
what
these
guys
are
doing,
but
we
can
discuss
this
later,
but
this
means
that
the
external
counter
party
is
the
first
line
of
defense,
so
they
should
be
the
ones
with
the
enough
capital
to
absorb
the
first
hit
and
with
the
power
to
service
the
credit
that
is
not
performing
as
expected.
D
So
this
is
like
this.
This
is
the
most
important
line
of
defense
in
our
in
our
framework.
We
should
hopefully
never
get
to
the
second
line
of
defense,
which,
which
is
that
which
is
when
maker
takes
con,
has
to
take
control
somehow
of
the
collateral
through
other
parties
outside
of
the
dow,
but
just
be
more
active
in
control,
because
the
first
line
of
defense
didn't
work,
and
this
goes
back
to
the
to
the
point
I
was
making
with
with
sebastian
that
we
should
see.
D
D
The
second
one
at
the
compliance
level
is
more
for
operating
risk
than
credit,
because
the
the
compliance
core
unit
will
ensure
that
what
the
core
units
are
doing
underneath
is
virtuous
and
is
not
malicious
and
in
credit.
Unfortunately,
we
always
need
to
prepare
ourselves
for
the
worst
possible
scenario.
D
We
always
need
to
imagine
that
the
world
is
going
to
end
at
some
point
and
we
need
to
prepare
ourselves
for
it,
but
I
agree
with
you
just
a
short
version
is
that
the
person
of
the
fans
definitely
should
be
placed
outside
of
the
community
and
at
the
level
of
the
originator
outside
now
it
will.
It
depends
on
how
the
structure
it
is
and
again
this
primary
structure
agnostic,
but
it
should
be,
it
should
be
outside
of
the
town.
C
C
So
how
do
you
see
that
not
only
kind
of
like
oversight
and
kind
of
essentially
issuing
as
calling
there
like
a
label
of
compliance
certificate,
but
also,
I
think,
reinforcing
some
of
the
best
practices
that
that
learn
that
are
learned
over
time
across
them.
So
that
is
kind
of
like
a
sort
of
feedback.
Loop.
D
D
To
the
others
right,
and
I
think
it's
very
it's
very
clear-
and
I
know
that
you
have
you-
have
the
ambition
of
working
in
a
core
unit
where
you
grow
leaders
that
spin
off
in
other
core
units-
and
I
think
this
is
this
is
conducive-
is
conducive
for
that,
because
you
will
have
a
meta
layer
on
top.
That
is
ensuring
that
all
the
core
units
underneath
they
still
have
a
link
between
them.
But
again,
the
short
answer
that
I
give
is
that
I
am
as
I
I
am
stronger,
strong
believer
of
the
power
of
transparency.
D
So
we
will.
We
should
try
to
make
this
evaluation
process
as
transparent
as
possible
for
the
people
who
are
interested,
because
you
know
these
are
boring
topics
for
people
who
like
like
who
get
they're,
not
the
most
excited
for
the
non-geeks.
But
I
think
we
should
try
to
make
this
as
transparent
as
possible.
C
Yeah,
just
just
one
less
follow-up,
I
think
the
the
thing
that
we
might
have
to
consider
and
that's
a
separate
type
of
discussion
on
this,
the
the
current
setup-
and
I
know
that
it's
it's
a
principle-based
approach.
It's
not
it's
not
supposed
to
be.
I
guess
rigid,
because
there's
still
discussion
to
be
happy
to
be
happening
in
the
community.
C
The
reality
is
there's
quite
a
few
interactions,
also
with
different
core
units
at
different
touch
points
in
time
in
the
current
kind
of
fifa.
World
pipeline
flow
of
how
of
credit
is
underwritten
within
within
the
dow.
So
I
I
know
that
I
have
contemplated
that
in
the
report,
but
I
think
maybe
maybe
just
I
think
it's
some
point
to
touch
points
and
happy
happy
to
contribute
on
that
on
also
the
the
flows
from
both
the
non-technical
side.
C
D
And
I
also
think
we
mentioned
this
in
the
report,
but
we
in
the
spirit
of
decentralization
and
without
just
without
not
replicating
most
of
the
the
skills
within
the
dao,
and
I
think
we
haven't
touched
about
the
technical
side
here,
but
I
think
there
are
some
technical
aspects
in
the
way
we
structure
the
collateral.
We
can
access
the
collateral
and
if
we
are
comfortable
with
the
level
of
decentralization
that
the
external
counter
parties
have
in
in
dealing
with
in
dealing
with
the
collateral.
This
is
something
that
needs
to
be
addressed.
D
It
will
need
to
be
addressed
also
with
the
help
of
core
units
that
are
outside
of
this
scope
of
real-world
financing,
I'm
thinking
about
the
collateral,
engineering,
core
unit
and
the
risk
core
unit
etc.
But
I
think
this
is
a
super
important
point.
It
is
not
it's
not
proper
business
underwriting,
but
it's
part
of
the
structure
we
haven't
draft.
B
Yeah,
thank
you.
So
my
question
was
about
what
do
we
do
in
the
case
of
novel
collaterals?
Like
I
don't
know,
say,
elon
wants
to
come
to
us
with
a
twice-fired
falcon
9
rocket
right.
Are
we
trying
to
spit
up
a
reward
finance
portfolio
core
unit
for
for
every
new
type
or
are?
Are
there
ways
we
can
kind
of
stream
like
that,
to
you
know
not
not
be
so
reactive,
as
as
different
opportunities
become
available.
D
Yeah-
and
I
think
this
goes
back
to
the
fact
that
this
is
a
principle-based
framework
and
not
a
restricted
framework,
so
I
agree
with
you:
we
shouldn't
wait
to
have
a
core
unit
set
up
in
a
very
bureaucratic
way
to
every
possible
risk,
because
it
would
be
very
inefficient,
but
I
think
this,
this
framework
of
having
more
than
one
level
of
controls,
is
conducive
of
that.
What
I
mean
is
if
there
is
generally
hopefully
a
portfolio
core
unit
that
believes
to
have
the
right
skills
that
are
not
necessarily
specialized
in
that
risk.
D
But
there
are
some
parallelism
that
can
be
applied
in
underwriting
that
know
that
another
risk
that
portfolio
you
need
to
step
forward
and
do
the
work,
but
then
we
will
have
another.
We
will
have
still
the
second
layer
of
the
fans,
the
compliance
per
unit
that
will
assess
whether
the
belief
of
the
portfolio
per
unit
of
having
that
that
required
skills
actually
exists
is
cor,
is
a
is
genuine
or
not,
and
again
the
compliance
community
will
never
step
in
and
say.
This
is
wrong
because
this
should
be
done
in
this
way.
This
risk
is
different.
D
We
think
this
process
is
compliant
with
the
with
the
principles,
because
the
portfolio
core
unit,
although
is
specialized
on
risk
a
actually
there
are
a
lot
of
parallelisms
with
risk
b,
and
we
believe
this
is
there
is
there
is
some
portability
between
between
those
two
risks
or
no.
We
think
these
two
risks
are
that
are
very
different
in
nature,
and
we
don't
think
we
have
enough
skills
now.
D
Korean
is
not
perfect,
but
I
personally
think
that
there
is
having
a
second
a
second
layer
helps
at
the
end
again,
the
power
of
accepting
or
rejecting
is
in
the
hands
of
the
token
holders,
but
that
that
there
is
another
there
is
a
second.
There
is
a
second,
I
think
again.
This
second
level
facilitates
the
fact
that
the
level
underneath
is
much
more
fluid,
so
people
are
not
just
waiting
to
comply
specifically
to
a
mandate
that
is
very
stringent
because
they
know
that
there
is
a
second
level
that
is
giving
them.
A
G
Great
thanks,
yeah
thanks
pulling
this
together.
It's
really
interesting.
My
question
is
more
about
so
look.
There's
there's
been
a
lot
of
focus
on
this
about
monitoring
of
risk
and
understanding
the
risk
in
the
collateral
when
we're
on
boarding.
But
my
question
is
more
about
the
ongoing
monitoring
of
the
loans
and
what
happens
in
that
in
that.
G
At
some
point,
then,
there
needs
to
be
an
entity
which
is
monitoring
both
the
arranger
and
the
underlying
collateral
that
that
we're
actually
lending
against.
And
I
wonder
if
much
thought
has
been
put
into
how
that's
resourced
and
how
that's
monitored,
whether
it's,
whether
there's
a
focus
on
kind
of
getting
some
of
that
data
on
chain
and
to
get
on
chain
monitoring
or
whether
that's
something
we're
just
going
to
figure
out
a
bit
later.
D
I
I
can
give
the
first
part
of
the
answer.
No,
the
principle
based,
I
think,
there's
two
two
parts
to
two
elements
in
my
in
my
answer.
The
first
one
is
our
view
is
that
the
portfolio
core
unit
that
was
involved
in
scoring
the
risk
for
the
onboarding
should
be
the
one
responsible
for
the
ongoing
monitoring
of
that
risk.
Today
they
should,
they
should
put
together
the
dashboard
and
the
data
requirements
that
are
part
of
the
of
their
qualified
opinion,
and
they
should
monitor.
D
They
should
monitor
the
risk,
an
ongoing
basis
and
the
compliance
co-unit
will
evaluate
them
continue
continuously,
based
on
how
they're
doing
the
monitoring,
how
thorough
is
the
monitoring?
The
second,
the
second
part
of
the
answer
actually,
which
relates
to
the
first
part
of
your
question,
is
I
don't
necessarily
agree
that
there
isn't.
There
is
a.
There
is
a
misalignment
of
incentive
between
the
ranger
and
the
financier
because
they
arrange
it
always
depends
on.
You
always
and
depends
on
structuring
I'll
make
you
an.
D
Now,
if
they
churn
the
loans,
this
is
actually
not
bad
for
you
as
a
lender,
because
you're
saying,
okay,
you
are
you're
more
liquid,
so
you
can
repay
me
the
line.
There
is
a
lower
risk
of
coming
from
a
liquidity
and
you
might
even
actually
negotiate
with
the
with
the
platform
that
you
take
a
portion
of
those
originating
fees
that
those
guys
like,
because
you
know
you
said
correctly-
some
of
those
business
models,
especially
for
time
tiny
credit.
D
They
make
a
lot
of
money
on
originating
fees
actually
most
of
the
times
they
make
all
their
money
online
fees,
because
the
rest
of
the
spread
just
pass
it
on
to
the
to
the
lender,
but
I
think
it
all
goes
back
to
good
structuring.
That's
why
I
think
credit
is
an
art.
If
you
know
how
to
do
credit
underwriting,
then
you
also
know
how
to
align
your
incentives
with
the
platform.
D
If
you
don't
know
your
passive,
then
you
get
squeezed
and
that's
something
we
don't
want
to
do,
but
it
goes
to
good
structuring
and
in
terms
of
monitoring,
I
think
developing
best-in-class
monitoring,
dashboard
and
tools
it
will.
It
will
be
like
a
heavy
lifting
job
that
we
need
to
do,
but
this
is,
it
will
be.
This
will
be
crucial.
Hopefully
my
my
hope
is
that
hopefully
this
will
be
as
automatized
and
standardized
and
broad
and
chained
as
possible,
but
I
think
it's
a
process
to
get
there.
G
Yeah,
okay
and
then
actually,
yes,
the
slide
follow-up
to
that
is,
is
yeah
what
you
know
your
general
thoughts
or
the
team's
general
thoughts
on
moving
virtually
all
of
this
on
chain.
I
mean
so
personally
yeah.
I
I
quite
like
the
centrifuge
style
model
of
having
you
know,
asset
financing
actually
on
chain,
but
I
wonder
whether
the
view
is
that
yeah,
eventually
there'll
be
billions
and
billions
of
die
going
out,
and
that
will
be
all
on
chain
or
whether,
actually
you
think
it's
fine
to
have.
G
D
D
D
I
think
when
I
call
when
I
talk
talk
about
business
financing
is
any
financing
me
that
is
a
bit
more
complex,
that
financing
on
the
margin
short
term
versus
a
token.
So
if
you
have
any
any
type
of
financing,
even
of
an
unchained
native
business,
that
requires
certain
terms,
structured
in
a
more
complex
way,
etc.
I
think
this
framework
should
apply
to
any
type
of
financing,
and
I
think
this
financing
will
happen
mostly
on
chain
in
the
future,
so
not
only
the
data
but
also
the
underwriting.
D
I
know
well
the
the
underlying
chain
and
the
writing
model
of
the
team
like
pool
of
centrifuge,
maybe
that
I
don't
know
if
that
is
the
future.
The
model
of
the
future
or
not,
but
I
really
believe
that
underwriting
and
the
writing
and
monitoring
structuring
in
the
long
term
will
all
happen
on
chain
and
the
staking
of
capital
risk
across
all
these
levels
will
actually
enforce
a
lot
of
the
controls
that
now
we
have
to
enforce
in
a
different
way.
D
So
I
think
so,
but
I
think
we
are
a
few
years
a
few
years
away.
The
other
important
point,
and
is
that
also
the
reason
why
I
think
it
is
so
important?
I
don't
want
to
take
much
of
your
time
guys,
but
I
think
it's
so
important
to
have
this
presentation.
It's
fundamental
work
now
is
that
I
think
maker
with
real-world
financing
can
be
the
most
powerful
ramp
into
defy
for
institutionals
like
if
you
are
a
bank,
and
you
have
a
10
billion
balance
sheet
that
you
want
to
deploy
in
deep
5.
D
You
cannot
do
it
through
circle.
You
cannot
do
it
through
other,
like
stable
coins
that
have
massive
liquid
to
that
amount,
but
you
can
do
it
through
a
real
world
financing
type
of
setup
when
you
pledge
collateral
off
chain
that
collateral
will
never
go
anywhere,
but
then
actually
you
get
mean
to
die
on
chain
that
not
necessarily
you
want
to
bring
back
off
chain.
D
D
C
E
D
D
So
we
wanted
to
open
a
consultation
phase
where
people
can
ask
for
questions
can
review
the
report
and
we
can
continue
this
type
of
conversation,
because
I
think
it
is
so
important
that
we
cannot
build
anything
unless
unless
we
we
on
board
as
many
people
as
possible
within
the
community
with
their
with
their
with
their
opinions,
and
then
our
ambition
is
to
make
this
real,
of
course,
so
move
to
implementation
phase.
The
implementation
phase
will
require
certain
certain
acts
of
governance
or
team
building
or
incubation
of
potential
communities
in
the
future.
D
Hopefully,
hopefully,
we
will
outline
the
next
steps
in
the
next
few
weeks,
but
tomorrow
we
start
today.
Tomorrow
we
start
a
concentration
phase
to
get
all
your
your
opinion
on
the
report,
then
you
can
contact
me.
You
know
my
details,
I'm
on
the
forum,
I'm
on
discord.
You
have
my
email,
so
I
think
there
are
many
ways
to
contact
me
and
again.
I
wanted
to
thank
everybody
guys
for
the
support.
I
know
a
lot
of
people
have
helped
me
drafting
this
report.
D
A
D
A
To
just
echoes
juan's
point,
thank
you
so
much
for
all
the
the
hard
work
that
has
gone
into
it
already.
We
encourage
everyone
to
check
out
the
forum.
Luca
will
be
posting
the
full
report
here
shortly
and
in
the
coming
weeks,
months
and
future
excited
to
see
the
work
from
yourself.
So
thank
you
again
for
everyone
for
joining
the
first
episode
of
maker
explorer
and
we'll
see
you
next
time.