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From YouTube: Governance and Risk Meeting: Ep. 3
Description
In this Governance and Risk meeting, Steven Becker, our Head of Risk at MakerDAO, will continue guiding us through his Governance Risk Framework document.
This one of many governance-specific meetings we will be holding in preparation for the public launch of Decentralised Governance.
Governance and Risk Framework - Part 1: https://medium.com/makerdao/makerdao-governance-risk-framework-38625f514101
Foundation Proposal: https://medium.com/makerdao/foundatio...
Website: https://makerdao.com
Twitter: https://twitter.com/makerdao
Reddit: https://www.reddit.com/r/MakerDAO/
Chat: https://chat.makerdao.com/home
Email: info@makerdao.com
A
Second,
for
Google
to
catch
up
there
yeah.
Well,
everyone
welcome
to
our
third
governance
and
risk
meeting
with
our
special
co-host.
Even
Becker
will
be
discussing
issues
related
specifically
to
scientific
governance
and
a
risk
framework,
and
that
means
we'll
be
touching
on
mechanics
about
how
governance
might
work
and
we'll
also
be
talking
about
a
lot
of
high-level
issues
relating
to
risk.
The
risk
constructs
what
risk
actually
means
we'll
be
delving
into
some
base
principles
as
well
as
some
some
high-level
and
implementation.
We're
lucky
enough
to
have
Sauron
Peter
in
the
call
with
us.
A
Sauron
is
our
head
of
product
and
he's
the
guy
I
mentioned
last
time,
but
he's
the
guy
that
makes
sure
that
we
actually
build
things.
So
he
has
some
deeper
insight
into
the
implementation
end
of
things
while
were
happily
talking
about
the
theoretical
aspects
of
it.
It's
far
less
pressure,
I!
Imagine
in
our
lives,
let's
introduce
chests.
You
want
to
tell
us
what
you're
up
to
you
know
what
you'll
be
doing
this
in
a
meeting
hey.
B
C
A
C
Now
the
concept
of
risk
management
we
actually
explored
in
in
a
certain
amount
of
depth
through
the
history
of
probability
theory,
because
we
wanted
to
get
a
sense
that
this
thing
actually
has
a
very
deep
and
broad
body
of
knowledge,
and
it
is
that
concept
that
we
define
the
the
sense
of
what
is
scientific.
Now.
Further
to
that,
we
had
a
look
at
the
fact
that,
given
this
broad-based
body
of
knowledge,
we
had
sufficient
tools
to
actually
apply
to
the
the
concept
of
governance.
C
If
we
then
have
time
we
can
go
into
now
how
we
look
to
implement
scientific
governance
through
this
decentralized
risk
function
and
then
maybe
narrow
the
scope
down
to
have
a
look
at
what
a
risk
contract
actually
is,
and
you
know
who
develops
the
first
one
and
then
conclude
with
an
outline
of
the
the
governance
process
and
maybe
give
an
example
of
how
it
actually
pertains
to
to
risk
management.
But,
firstly,
rich.
Do
you
have
any
questions
that
you
know?
C
A
There
there
is
there's
quite
a
list
forming
a
lot
of
them
are
not
targeted
specifically
to
the
topics
that
we've
been
disgusting,
but
I
think
that
they're
worth
addressing
some
of
them
are
gonna,
be
pretty
tough
to
accept
I'm.
What
that
we
don't
have
the
answers
to
some
of
these
questions,
but
I
think
that
if
they're
worth
putting
out
there
soren,
you
might
have
some
insight
into
some
of
these
too.
So,
if
you
have
any
comments,
please
feel
free
to
yeah.
A
We
can
talk
about
these
highfalutin
ideas
all
we
like,
but
somebody
actually
has
to
make
a
tool
to
get
people
to
do
them
and
that's,
what's
pretty
tricky
all
right.
So
marker
5
asked
a
while
ago
whether
we
aren't
reinventing
the
wheel
here.
Could
we
leverage
other
projects
in
the
space
like
Eragon
for
the
governance,
heavy,
lifting
and
I
think
that
Sauron
that
might
overlap
with
some
of
the
things
that
you're
doing
well.
B
You
know
this,
the
the
governance
way
has
has
actually
been
been
in
this
project
from
the
very
beginning
and
it
even
was
inherited
from
bitshares,
with
their
approval,
voting
and
and
the
the
core
team
has
looked
and
thought
deeply
about
this
and-
and
you
know,
never
really
seen
anything
except
you
know,
kind
of
making
sure
that
that
we
develop
our
own.
So
we
really
can
support
the
continued
decentralization
of
this
and
yeah
so
so,
basically,
yeah,
obviously
we're
looking
to
make
sure
we
get
inspiration
from
what's
out
there.
A
I
think
that,
from
from
my
uneducated
and
sort
of
outside
perspective,
the
assumption
that
I
had
was
that
Eragon
kind
of
are
these
other
governance
projects.
They
kind
of
release
a
complete
suite
of
the
total
governance
tools
and
with
our
gradual
decentralization
plans,
we're
looking
people
sort
of
take
baby
steps.
So
the
first
step
is
to
you
know,
establish
collateral
types
and
the
second
step
might
be
to
establish
charitable,
giving
what's.
A
C
It
was
very
interesting,
I
think
they've
got
a
you
know,
fabulous
project.
What
I
understand
about
them
is
that
it
is
like
an
operating
system
which
allows
you
the
granularity
to
create
very
flexible
governance
systems,
and
that
actually
is
quite
exciting,
but
it
still
doesn't
answer
the
question.
What
is
the
governance
system
that
we
require
and
I
I
concur
with
Stern
to
the
point
that,
in
order
to
facilitate
and
understand
what
you
want
to
do,
you've
got
to
create
it
yourself
and
then
once
you've
done
that
you
can
obviously
compare
and
contrast
against.
C
B
All
right-
and
one
thing
that
perhaps
I
also
can
add,
is
that
you
know
it's
really
critical,
that
what
we're
doing
here
is
totally
secure.
So
even
just
at
the
effort
about
auditing
and
a
third-party
solution,
but
also
that
they
may
enter
a
lot
of
resources.
You
know
so
yeah
it's
it's
fully.
As
Stephen
says,
you
know
we
need,
we
need
to
work
towards
what
what
we
ultimately
need
and
then
we
can
obviously
see
if,
if
someone
else
can
can
handle
it
better
going
forward.
A
A
I
can
read
out
your
message
last
time
or
you
can
jump
in
and
ask
yourself
I'm,
not
sure
if
your
audio
capable
it's
a
question,
is:
should
maker
holders
add
additional
weight
to
risk
teams
that
simultaneously
have
long
positions
in
the
assets
they're
proposing,
which
is
an
interesting
question.
Sure
how
do
you
measure
that,
but,
as
I've
been
can
contemplate.
C
That
is
a
very
interesting
point.
It
has
not
been
contemplated
and
my
initial
instinct
is
to
say
no,
the
simple
reason
there
is
that
you
start
forming
the
concentrations
again.
You
know
possible
cartels
again
and
you
might
find
a
systemic
systemic
rather
bias
towards
certain
people.
You
may
have
large
ownership
with
their
own
incentive
structures
behind
it.
To
have
anaphora
scheme
come
in
and
contribute
is
in
essence,
what
you
want.
C
You
want
a
different
point
of
view
that
reaches
you
know,
a
fundamental
conclusion
that
adds
value
to
your
system
and
the
basis
of
it
being
you
know,
long
and
icky.
Our
token
holders
would
be
interesting.
It's
specifically
from
an
activists
point
of
view.
You
should
find
that
activist
type
investors
should
have
a
risk
team
contribution.
It
just
would
make
sense,
but,
more
importantly,
it
shouldn't
be
increasingly
weighted
because
of
that
fact,
that's
just
my
my
initial
reaction,
yeah.
A
I
think
I
see
where
you're
going
so
the
the
primary
focus
on
all
of
these
asset
types
and
the
risk
framework
itself
is
that
it's
scientific
based.
So
it's
based
on
reproducible
results
from
reliable
data
sets
of
whether
whether
the
actual
proposers
are
long
or
short,
shouldn't
really
have
an
impact
on
which.
A
C
Exactly
which
Wilson
talks
to
the
idea
of
plutocracy
I
mean
it's
a
very
natural
state,
especially
with
respect
to
startups
and
while
actually
most
organizations,
scientific
governance
to
a
certain
extent
is
not
going
to
stop
Lou
tock
recei
I
mean
as
previously
mentioned,
but
it
sure
as
heck
is
going
to
show
them
up
as
bad
actors.
If
you
have
a
discourse
that
results
in
a
very
clear
argument
that
favors
one
direction
and
you
find
the
voting
going
in
another
direction,
it's
going
to
be
very
clear
that
there
is
a
bad
actor
involved.
A
Very
cool
I
hadn't
considered
that
aspect
of
things,
so
if
if
a
model
is
being
presented
or
a
proposal
is
being
put
forward
and
it
very
clearly
and
maybe
cogently
points
out
that
this
is
the
type
of
result-
and
this
is
the
attractiveness
of
this
particular
asset
type,
and
then
we
find
that
the
voting
behavior
is
contrary
to
that
assumption.
That
was
put
forward.
We,
we
might
have
a
a
signal
that
something
is
going
wrong
somewhere
in
the
system.
Very.
C
Much
so
oh
there's,
there's
a
cartel
and
an
influence
being
created
on
purpose.
I
mean
this
now
talks
to
the
you
know
some
of
the
constructs
behind
the
the
dark
table.
If
you
do
have
unwarranted
influence,
it
at
least
can
be
flagged
appropriately.
If
it
goes
against
your
scientific
conclusions,
at
least
your
rigorous
conclusions,
what
you
can
do
about.
Well,
that's
a
completely
different.
You
know
kettle
of
fish
I
off
the
top
of
my
head.
C
A
It's
something
that
maybe
it's
a
good
segue,
because
we
were
discussing
this
before
we
actually
started
the
meeting
proper
and
it's
a
conversation.
That's
been
happening
in
the
chat
over
the
last
day
or
so,
where
the
discussion
of
plutocracies
and
whether
they
can
be
avoided
and
I
know
that
you
just
said
that
we
don't
know
what
the
solution
of
that
problem
is.
I
won't
put
you
on
the
spot,
but
em
there's
a
high
level
discussion
about
whether
plutocracies
are
actually
bad
in
a
in
a
business
environment,
whether
they
can
be
avoided
and
I'm.
Wondering
Sauron.
B
Well,
I
would
say
so
far:
it
has
been
outside
of
scope.
It
has
been
in
kind
of
late
as
the
groundwork
that
that
we
use
an
approval,
voting
and
mechanism.
You
know
and-
and
you
vote,
according
with
to
how
much
MK
are
you
hold,
and
you
know
well
of
this
well
there's
something
happening
outside
of
that.
You
know
so
far.
We
we
don't
have
taking
anything
into
consideration
about
detecting
lat,
yeah.
A
A
Right
now,
we're
gonna
be
one
of
the
first
major
dows
to
actually
have
governance
publicly
and
jumping
in
with
a
complete
framework
that
has
been
pre
designed
and
hoping
that
that
covers
off
all
the
edge
cases
that
we
don't
understand
yet
is
probably
with
naive,
so
I.
The
the
baby
steps
brush
that
we're
taking
is
is
the
only
logical
one.
A
B
It's
you
know
that
that
has
been
discussed
quite
a
lot
you
know,
and-
and
that
really
is
is-
is
very
important
that
you,
you
engage
people
and
and
make
it
worthwhile
for
them
to
the
world
and-
and
that
obviously
also
points
to
that.
You
should
be
voting
too
often
on
things
that
that
aren't
really
that
important.
So
so
there
has
been
discussions
about
whether
you
actually
could
could
give
some
kind
of
voting
rewards.
B
A
A
C
The
one
aspect
that
I
I
did
want
to
just
add
to
what
Soren
was
saying
is
that
voter
apathy
is
something
that
traditional
public
companies
have
as
well
when
it
comes
to
the
shoulders
and
and
getting
them
into
do
a
shareholder
vote
on
something
that
requires
a
special
resolution,
and
you
know
that
really
is
a
big
effort.
It's
a
big
lobby,
it's
a
big
marketing
drive.
C
It
really
is
something
you
know
really
important,
but
you
know
one
would
hope
for
that
in
our
space
that
this
education
forum,
that
we
starting
now
and
then
hopefully
the
the
debates
and
resolution
forum
that
will
constantly
have
opened,
will
drive
enough
debate
to
you
know
attracting
enough
people
to
say.
Listen,
ultimately,
you
can
have
a
say
about
something
and
educate
yourself
and
find
a
resolution
in
it.
C
At
the
same
time,
I
don't
know
how
strong
that
is
going
to
be,
but
I
mean
I
think
it
is
a
step
in
the
right
direction
to
to
you
know
fighting
against
that
empathy,
but
you
know
to
move
on.
The
next
topic
is
looking
at.
You
know
how
do
you
actually
implement
scientific
governance
through
this
decentralized
risk
function
now,
to
a
certain
extent,
I've
actually
touched
on
this
before.
C
If
you
recall
it
is
all
about
the
horizontal
and
vertical
elements
of
the
risk
function,
but
what
I
haven't
specified
is
know
where
and
how
these
structures
can
actually
form
a
rigorous
argument.
If
you
remember,
the
one
aspect,
I
said
is
that
the
entire
risk
function
can
look
can
be
seen
as
a
horizontal
function,
where
there
really
is
just
two
major
steps
that
have
to
happen.
The
first
one
is
the
qualitative
approval.
C
Now,
once
that
approval
is
done,
that's
big
step,
one
you
get
on
to
big
step
two,
and
that
is
actually
just
implementing
the
quantitative
aspect.
Now.
Those
two
points,
rather,
those
two
steps
are
increasingly
important.
When
you
have
a
look
at
how
risk
teams
will
contribute
towards
advising
m'kay
our
token
holders
as
to
their
points
of
view.
C
It
will
have
a
rating
attached
to
it
and
that
rating
is
especially
important
because
once
you've
had
a
look
at
the
quantitative
assessment
that
you
would
like
to
apply
to
the
system.
Those
assessments
will
then
be
adjusted
according
to
that
assessment.
So
those
two
steps
interact
with
each
other,
very
importantly,
and
very
effectively
the
more
faith
you
have
in
the
longevity
of
the
organization
back
in
the
token,
the
more
applicable
the
risk
profile
would
be.
C
It's
a
simple
case
of
of
an
adjustment,
but
considering
that
her
horizontal
again,
you
want
to
see
risk
teams
create
risk,
constructs
that,
as
I
mentioned
previously,
are
not
similar
to
each
other,
because
the
dis
similar
I
think
that
the
similar
nature
of
these
constructs
will
actually
add
to
the
benefit
of
the
overall.
It
will
create
an
ensemble
and
that
ensemble
will
be
weighted
appropriately
and
you
get
a
a
final
conclusion
on
what
the
risk
profile
for
a
certain
collateral
type
will
be.
But
specifically,
you
might
find
again.
Those
verticals
will
have
components.
C
You
know
specific
models.
It
may
talk
to
things
like
darter
assessment
and
Quality
Assurance
on
data,
maybe
even
a
transformations
that
are
necessary
to
go
from
one
vertical
step
to
the
next
vertical
step,
and
there
you'll
find
that
that
collaboration,
which
brings
back
to
the
point
of
the
competitive
nature
versus
the
collaborative
nature
of
this
entire
risk
function.
So
how
does
this
stem
into,
or
rather
how
does
this
form
the
basis
of
scientific
governance?
C
Well,
if
you've
constantly
have
this
grind
of
debate
from
different
points
of
views
with
respect
to
either
specific
models
or
specific
constructs,
you
are
going
to
be
assured
of
the
fact
that
your
conclusion
or
whatever
resolution
or
even
are
just
a
compromise
that
you'll
get
from
this
is
well
considered.
It's
almost
like
the
blockchain
itself,
once
you've
engaged
in
this
conversation
and
you've
reached
this
point,
it's
very
hard
to
all
of
a
sudden
change
the
point
of
view
without
revisiting
all
of
the
issues
that
you
have
argued
about
beforehand.
C
So,
by
its
nature,
it
sort
of
replicates
the
idea
of
this
of
the
you
know
of
the
blockchain,
in
the
sense
that
to
try
and
change
everyone's
point
of
view
means
you
have
to
change
pretty
much
everything,
and
once
you
have
a
concluding
resolution
on
what
kind
of
construct
you
want
to
have
in
your
system,
you're
going
to
be
hard-pressed
to
to
act
against
it.
You
know
referring
to
my
previous
remark
about
being
able
to
identify
bad
actors
if
they
vote
against
a
very
cific,
well-thought-out
to
rigorously
debated
conclusion.
So
that
aspect
gives
you
diversification.
C
It
gives
you
assurance
in
in
the
fact
that
you're
constantly
iterating
through
arguments
coming
to
come
to
a
very
well-defined
and
rigorous
conclusion.
So
that
is
a
sort
of
high-level
aspect,
but
effectively
that's
how
you
can
use
the
decentralized
function
to
to
actually
implement
you
know
scientific
governance
and,
at
that
point,
I
think
I'll
pause
and
see.
If
there's
any
questions
or
comments.
A
Well,
I
have
a
question
that
there
is
a
lot
of
sort
of
conceptual
stuff
and
what
you
just
described
it.
Would
it
premature
for
you
to
give
us
an
example
of
what
token,
why
is
being
evaluated
by
these
two
teams
and
maybe
talk
about
how
some
hypothetical
about
how
those
teams
would
interact
in
order
to
push
forward
a
proposal
for
that
common
thing?
Okay,.
C
This
actually
leads
me
to
the
the
the
second
point:
what
is
the
risk
construct
and
who
creates
the
first
one,
because
if
you
understand
the
construct,
you
can
understand
how
to
compete
to
compete
with
each
other.
So,
as
you
know
mentioned
before,
a
construct
is
just
fundamentally
a
collection
of
models
and
a
risk
team.
When
they
put
forward
their
risk
construct
will
be
assessed
by
omakr
token
holders
in
terms
of
what
they're.
Actually
you
know
what
they're
modeling,
what
they're
going
to
produce
and
how
that's
gonna
help
the
system.
C
So
each
of
these
risk
constructs
that
are
approved
by
make
a
token
holders
will
then
compete
against
each
other
in
the
following
way.
Let's
take
like
I
said,
as
you
say,
it
took
an
ABC.
Firstly,
there's
a
qualitative
assessment
that
is
required.
It
gets
split
down
into
certain
features
and
those
features
are
effectively
rated
token
sorry
to
risk
team.
A
might
decide
that
this
token
has
a
rating
of
6.4,
so
it
can
be,
might
decide
that
it
has
a
rating
of
7.1.
C
A
simple
aspect
would
then
be
to
average
them
out
and
they
come
out
with
a
six
point.
Seven
five
score
now:
what
does
that
mean?
That
means
that
you've
approved
this
token
and
you've
approved
initially
the
risk
constructs
underlined
the
assistant,
so
once
that
token
is
approved,
the
risk
profile
that
is
given
in
terms
of
the
debt
ceilings,
the
liquidation
ratios
and
stability
fees,
being
the
primary
risk
profile
of
the
tokens
will
be
calculated,
numbers
will
actually
be
calculated
and
put
forward,
and
those
numbers
put
forward
will
be
weighted
again
and.
C
C
Wildly
divergent
numbers,
these
numbers
would
be,
to
a
certain
extent,
understood
and
expected
before
you
actually
even
approved
a
token,
because
you
would
say
to
yourself:
well,
you
approved
the
risk
construct
from
Team
A
and
you
proved
the
risk
construct
from
team
B
because
they
give
such
different
points
of
view,
which
is
great,
and
if
you
want
those
two
different
points
of
view,
you
are
implying
that
you
wish
to
have
a
compromise
between
them.
What.
C
The
initial
assumption
is
yes,
you
should
find
that
they
should
be
in
more
or
less
the
same
ballpark,
but
if,
for
some
reason
they
are,
you
know
completely
divergent.
The
first
thing
you
can
do
is
obviously
check
up
on
that.
Have
a
look
at
the
risk
constructs
that
you
that
you've
approved
have
a
look
at
the
data
that
comes
with
these
risk
constructs
and
actually
just
to
go
through
an
order
process
yourself
to
make
sure
that
these
numbers
really
make
sense.
C
If
you
want
to
deep
dive
even
further,
you
could
have
a
look
at
where
the
arguments
between
the
the
two
results
might
either
intersect
and
make
sense,
or
ultimately
not
also
where
they
diverge,
and
by
including
these
two
risk
constructs
and
understanding
that
they
may
come
up
with.
You
know
divergent
point
of
views.
You
have
to
admit
to
yourself
that
there
is
a
compromise
that
you
want
between
these
two
views.
C
Basically,
it
might
be
a
case
of
saying
well
they're,
so
polarizing
I
really
wish
to
see
what
is
in
the
middle
I
really
wish
to
see
what
the
compromise
is
between
these
two
polarizing
point
of
views.
I
mean,
ultimately,
you
don't
want
to
have
just
to
risk
teams.
You
want
to
have
many,
so
the
ensemble,
it
gets
rid
of
outliers
and
you
know,
focuses
more
on.
C
You
know
the
the
representative
value
of
what
the
risk
function
as
a
whole
represents,
but
if
we're
only
looking
at
two,
then
there
is
that
understanding
there
is
that
implicit
understanding
of
what
can
be
generated
as
a
result
of
using
these
two
constructs.
Now,
when
you
see
these
two
risk
constructs
and
you
see
the
risk
profiles
that
they
calculate
and
you
create
the
average
or
rather
the
weighted
average
of
this
of
these
risk
profiles.
C
You'll
come
up
with
numbers
for,
as
I
said,
before,
the
primary
risk
parameters
been
there
sitting
in
liquidation
ratio
and
stability
fee,
and
that
will
then
be
placed
as
a
they'll
be
appended
onto
the
executive
vote
that
would
occur
in
the
the
following
quarter,
because
you've
really
passed
the
governance
votes
on
the
the
actual
tokens
itself.
So,
from
start
to
finish,
you
have
a
token.
C
It
gets
approved
that
approval
gets
turned
into
a
batch
of
risk
numbers
which
are
weighted
appropriately,
then
adjust
it
for
its
qualitative
assessment
and
then
appended
to
the
executive
vote
to
be
implemented.
That
is,
in
effect,
the
a
very
simplistic
overview
of
how
this
risk
function.
Willable,
you
know,
actually
work
so
I
want
to
pause
there
for
a
moment.
Any
questions
comments.
B
C
The
whole
idea
is
to
have
transparency
to
the
point
where
every
aspect
can
be
argued
if
I'm
my
as
the
sort
of
first
risk
team,
the
internal
risk
team
I,
will
produce
a
construct
and
at
first
the
only
point
of
argument.
I
will
have
will
be
with
the
community
after
explaining
what
it
does,
and
hopefully
it
will
then
attract
other
folks
that
are
like-minded
to
start
pointing
out
various
things
that
can
either
be
a
prove
improved,
or
there
is
things
that
need
to
be
at
least
address
from
a
higher
higher
point
of
view.
C
A
Weirdy
envision,
all
this
back
and
forth,
and
all
this
debate
happening
so
if
I
was
a
highly
engaged,
voter
I
had
plenty
of
free
time
and
I
wanted
to
know
the
complete
history
of
the
interactions
or
the
evaluations
that
went
into
a
certain
weighting
of
an
assets
that
would
I.
Would
there
be
a
special
forum
where
I
can
go?
You
know
see
how
the
risk
teams
have
been
interacting
with
each
other
or
will
I
be
able
to
see
the
different
constructs
that
went
together
to
build
a
weighting.
Yes,.
C
Sub-Groups
may
be
with
respect
to
utility
tokens
versus
security
tokens,
or
maybe
there
is
one
that
is
so
particularly
intriguing
that
you
know
a
channel
is
made
of
mages
for
it.
Now.
The
one
thing
that
you
brought
up,
which
is
actually
you
know
tantamount
talking
about
like
votes
apathy,
is
that
if
this
whole
thing
requires
taking
up
a
lot
of
your
time,
then
essentially
the
business
intelligence
is
sort
of
failing
somewhere.
As
a
maker
token
holder,
there
should
be
a
place
where
you
can
log
on
to
some
sort
of
portal,
which
is
my
imagination.
C
Hopefully
we
will
have
something
in
the
future,
but
I
mean
it
will
give
you
a
sense
of
what
the
risk
teams
think
what
their
conclusions
are
and
what
the
overall
valuation
evaluation
is.
For
this
token,
from
the
qualitative
evaluation,
all
the
way
through
to
the
actual
either
suggested
risk
profile
or
the
actual
risk
profile
sitting
in
the
system
at
the
moment
and
then
from
there.
If
one
wish
is,
they
could
dive
a
bit
deeper,
going.
C
A
C
C
You
know
the
make
it
our
system
is
at
first
sight,
it
looks
like
something
you
can
distill
distill
down
to
a
couple
of
parameters,
but
when
you
take
a
closer
look,
there
are
actually
many
features
of
it
that
you
need
to
understand
very
clearly
in
order
to,
in
order
to
to
know
how
to
contribute
a
risk
construct
that
attempts
to
capture
majority
of
those
risk
elements
as
well
as
possible.
There
are
certain
features:
you're
not
gonna,
be
able
to
capture,
but
you
sure,
as
heck
can
develop
them
and
hopefully
capture
them
somewhere
in
the
future.
C
You
will
find
that,
obviously,
all
risk
constructs
going
forward
will
be
open
for
everyone
to
engage
with,
but
it
will
slowly
become
abstracted
to
a
higher
and
higher
level,
as
I
suggested,
with
the
business
intelligence.
But
you'll
have
the
the
hardcore
individuals
debating
at
the
at
the
level
of
rigor
and
debating
at
the
level
of
maybe
first
principles
to
idealize
what
should
actually
be
employed
in
our
system
and
all
the
reasons
for
it.
C
But
the
internal
risk
team
will
start
this
whole
function
by
creating
a
construct
that
to
be
voted
in
by
the
make
a
token
holders
and
once
that's
voted
in
then
that
will
be
the
first
basis
for
risk
and
the
first
basis
for
the
acceptance
of
collateral,
and
hopefully,
when
folks
see
how
this
thing
works
in
in
reality,
it
will
attract
other
risk
teams.
I
mean
I've,
really
got
a
few
questions
about.
You
know
forming
risk
teams.
Should
they
be,
you
know
legal
entities,
or
should
they
be
ad
hoc?
C
Well,
you
know
this
talks
to
the
the
fact
that
if
you
want
to
have
your
weighting
improve
over
time,
you
need
to
prove
that
your
longevity
and
your
commitment
to
being
a
risk-
a
contributor,
is
always
going
to
be
there.
You
know
it's,
it's
not
really
good
enough
to
go.
Oh
I
want
to
be
an
independent
risk
Assessor
because
gee
whiz,
it's
fun
right
now,
it's
cool
to
do
that.
But
then
you
know
your
waiting
will
slowly
decrease.
If
you
don't
have
that
consistent
contribution.
C
So
from
that
aspect,
I
think
we've
covered
what
a
risk
construct
is
and
also
who's
going
to
be
the
first
one
to
do
it
and
the
second
item,
or
rather
the
last
item,
is
what
you
know
soren
already
touched
on.
Is
you
know
what
is
this
outline
of
the
government
governance
process
looked
like
and
how
does
it
pertain
to
risk
management?
So
I
think
this
one
might
be
a
little
bit
more
on
the
new
side,
so
I'm
gonna
go
slowly
through
it.
C
Now
there
are
two
types
of
governance:
there
is
proactive
and
reactive,
so
proactive
comes
from.
You
know
the
consideration,
debate
and
resolution
around
appoints
and
an
action
where
the
sort
of
reactive
governance
is
about
more
procedural
intervention
that
reacts
to
a
change
in
the
state
variables
that
are
on
the
blockchain.
Now,
what
do
I
mean
by
the
the
reactive
government's
I'm
sure?
That's
the
burning
question
right
now.
Take,
for
example,
a
debt
ceiling.
C
It
debt
ceiling
will
relate
to
the
amount
of
activity
that
a
certain
token
will
have
in
terms
of
its
trading
profile
and
in
terms
of
the
number
of
tokens
issued
now,
one
could
not
imagine
that
that
just
stays
static
and
constant
through
the
life
of
the
the
organization
that's
going
to
change
so.
Consequently,
the
debt
ceiling
is
going
to
change,
and
when
we
see
the
change
in
the
the
trading
profile
and
the
number
of
tokens
issued
of
a
particular
organization,
we
need
to
react
to
it
appropriately.
C
We
either
need
to
react
by
being
more
competitive
in
terms
of
the
the
debt
ceiling
that
we
require,
and
we
also
need
to
be
reactive
in
terms
of
how
that
debt
ceiling
impacts
the
collateral
portfolio
as
a
whole.
So
that's
where
governance
will
be
more
reactive
as
soon
as
we
see
that
there
is
a
change.
That
change
will
then
be
placed
in
a
governance
vote,
as
Storen
pointed
out,
and
once
we
get
resolution
on
that,
it
will
be
appended
to
the
executive
vote
to
be
included
in
the
next
quarterly
vote
or
approval.
C
Now
this
touches
back
onto
the
idea
of
these
two
kinds
of
vote.
You
know
this
is
the
governance
version.
Is
the
executive
or
the
governance
vote
is
a
resolution.
It's
basically
a
declaration
of
how
everyone
has
come
to
a
specific
conclusion.
It's
almost
like
a
resolution
you
would
have
at
a
board
meeting,
but
in
terms
of
implementation,
which
is
really
unique,
as
opposed
to
the
traditional
organizational
space
is
that
you
can
actually
find
a
quantitative
profile
or
an
effective
profile
that
you
can
vote
on.
C
That
will
change
the
state
of
the
dial
on
the
blockchain
now,
given
that
there's
also
a
time
element
to
these
votes,
there's
one
so
firts.
For
instance,
when
you
vote
in
the
initial
risk
team
that
effectively
will
be
a
once-over
if
you
wish
to
get
rid
of
a
risk
team.
That's
also
a
once-off
vote,
then
you
have
intermittent
votes
now.
This
might
be
with
respect
to
Oracle's
and
maybe
Henry
look
at
the
inclusion
of
new
Oracle's
or
maybe
the
exclusion
of
articles
I
think
that'll
be
more
regular
than
than
just
being
once
off.
C
You
might
find
that,
especially
in
this
space,
the
most
important
thing
is,
we
don't
have
something.
You
know
we
don't
have
a
security
as
information
processor.
You
know
this
is
something
that
you
find
in
the
traditional
space.
It's
right
now,
I
think
SIPP
is
in
the
hands
of
Nasdaq
and
what
they
do
is
in
a
fragmented
market.
They
aggregates
all
the
the
bids
and
offers
together
and
they
find
the
best
bits
in
office,
and
they
then.
C
Disseminate
only
those
best
bits
and
offers,
as
representative
of
the
the
pricing
action
for
that
particular
asset.
So
you
don't
get
this
fragmented.
Look
that
we
have
today
in
the
crypto
market,
but
because
we
do
face
this
in
the
crypto
market,
we
need
to
be
able
to
understand.
Oracle's
very
clearly
understand
how
we
need
to
be
very
cognizant
of
the
security
around
them
and
what
their,
what
their
contributions
really
mean,
and
that
can
change,
and
that
needs
to
be
responded
to
your
property
through
more
of
an
intermittent
voting
apparatus.
C
Then
you
know
just
simply
a
once-off
form
and
then
finally
there's
a
regular
vote.
This
is
when
I
say
regular.
It
doesn't
necessarily
mean
it's
going
to
happen
every
week,
but
it's
going
to
be
something
that
it's
going
to
be
on
the
minds
of
the
maker
token
holders
on
more
than
one
occasion
and
more
than
intermittently,
and
that
basically
is
going
to
be
collateral.
That
is
the
one
as
that.
One
aspect
that
is
constantly
going
to
be
on
the
block
two
to
two
votes,
but
there's
going
to
be
some
collateral
at
some
point.
C
That
needs
to
be
assessed.
There's
going
to
be
some
collateral
at
some
point
that
needs
to
be
voted
upon.
There's
always
going
to
be
a
debate
open
about
new
collateral.
If
there
isn't,
then
the
the
blockchain
as
an
economy
is
in
trouble,
because
I
believe
that
this
regular
voting
around
collateral
and
to
to
just
segue
quickly
into
saurons
a
point
of
view,
might
touch
on
that
apathy
that
we're
worried
about,
because
this
type
of
vote
with
respect
to
collateral
may
be
so
regular
that
you
might
lose
interest.
C
You
might
find
people
going,
oh
just
not
collateral,
for
who
cares.
So
this
one
is
a
little
bit
for
this.
One,
for
me,
is
a
little
bit
tricky
because
it
needs
to
be
regular
because
it
does
show
a
flow
of
economic
growth
on
the
blockchain
and
it
does
show
a
flow
of
growth
for
make
a
dollar,
but
at
the
same
time
it
needs
to
keep
a
high
level
of
interest
to
ensure
that
you
know
the
right
collateral
is
included
in
our
portfolio.
A
Well,
there
was
a
lot
there
to
absorb
so,
and
it
was
good
because
we're
getting
I
feel
like
we're
getting
closer
to
sort
of
implementation.
So
we
can.
We
can
visualize
some
of
the
higher-level
concepts
that
you're
talking
about.
One
of
the
things
that
I
found
interesting
was
the
allocation
of
weighting
to
specific
risk
teams,
and
it
might
be
early
days,
but
it
sounds
like
this
is
a
reputation
management
system
where
and
I'm
curious
about
whether
you
have
any
ideas
about
what
that
that
framework
would
look
like.
How
do
you?
C
Teams
initially
you're
going
to
find
an
equal
weighting,
everyone
gets
an
equal
weighting
and,
as
you
progress
use,
you
have
a
simple
out-of-sample
testing.
You
back
test
yourself
and
you
find
that
you
are
absolutely
marvelous
and
on
that
basis
you
are
approved
by
make
a
token
holders
and
you
get
included
into
the
risk
function,
but
moving
forward
all
that
new
data
coming
at
you
is
all
out
of
sample
data,
and
you
assess
what
your
your
risk
system
is
saying
about.
C
This
new
data
now
there's
two
aspects
to
it,
which
is
quite
interesting
in
the
traditional
space.
When
you
do
this
testing.
Firstly,
you
find
that
there
are
a
certain
amount
of
breaches
or
there
certain
amounts
of
outliers
that
are
acceptable
and,
as
a
consequence,
most
risk
managers
would
then
say.
Well,
then,
just
make
this
whole
thing
a
lot
more
conservative,
so
there's
no
outliers,
even
that
by
itself
is
also
an
indication
that
something
is
broken.
C
C
A
Quite
it
it's
good
to
hear
I'm
all
right
as
a
technologist
I'm,
always
happy
to
hear
about
quantitatively
measuring
people's
performance,
so
you're
saying
that
they
would
buy
back
testing
some
risk
team
will
propose
a
collateral
type
that
will
build
out
a
model
and
then
over
time
there
will
be
this
sort
of
looking
back
to
figure
out
how
accurate
their
model
was,
and
if
they're,
if
their
predicted,
you
know,
liquidity
values,
their
debt
savings.
All
the
rest
of
it
turned
out
to
work
as
well
as
they
predicted.
Then
they're
there
waiting
would
go
up.
You.
C
The
thing
the
thing
here
is
that
there
is
a
lot
of
work
here,
but
if
you
compare
to
where
maked
I
would
like
to
be
I
mean
this
is
going
to
be
the
in
my
eye,
I
like
to
think
big
I,
always
think
of
one
day,
I'm
opening
up
the
financial
statements
of
Amazon
and
I
see
everything
denominates
it
and
I
instead
of
dollar.
You
know,
that's
that's
where
I
am
in
my
head.
So.
Consequently,
if
you
reverse
engineer
from
that,
how
big
is
the
economy?
C
How
big
is
the
blockchain
space
so
who
has
to
look
after
this
whole
juggernaut?
This
amorphous
constantly
moving
dynamic
thing
and
I
can't
imagine
you
know
having
the
structure
built
perfectly
deterministically
right
now,
but
I
can
abstract
it
into
this
into
this
larger
scope
with
the
periphery
that
says.
Well,
ultimately,
you
can
have
so
much
depth.
You
can
have
so
much
breadth,
but
as
long
as
we
don't
constrain
the
bounds
on
this,
we
should
always
hope
to
have
the
appropriate
risk
function.
Looking
after
the
system.
A
A
B
C
It's
a
good
question,
but
this
is
like
most
things
in
life.
You've
got
this
gradual
process.
It's
almost
like
looking
at
most
of
the
the
token
prices
in
like
early
2013
and
14
compared
to
where
they
are
now,
you
have
this
almost
flatline
process
and
then
there's
an
inflection
point.
So
what
we're
doing
now
is
not
I
feel
to
a
certain
extent,
because
you
know
I,
don't
have
700
people
in
front
of
me
and
we're
not
talking
about
the
intensity
and
the
rigor
behind
certain
artifacts
and
risk
management.
C
I
am
aiming
at
that
inflection
point
I'm
talking
to
that
inflection
point:
I,
don't
know
when
it's
going
to
come
and
if
you
cast
your
mind
back
to
when
Krypto
really
sort
of
took
off-
and
you
know
made
fortunes
for
everybody,
it's
the
same
sort
of
idea.
There
was
an
accumulation
of
this
contagion.
There
was
a
sense
of
this
value
and
then
one
day
it
was
somehow
enacted
upon
the
same
principle
works
for
the
the
risk
function.
C
In
fact,
I
think
the
risk
function
is
secondary
to
something
extraordinarily
important,
and
that
is
the
actual
realization
of
economy
on
the
blockchain.
That
is
really
what
I'm
talking
to
you
once
that
has
more
traction,
and
once
that
is
a
lot
clearer
in
everyone's
head,
you'll
find
that
the
goods
and
services
will
come
you'll
find
that
the
facilitation
of
tokens
and
token
growth
will
be
required,
which
means
that
you
need
transactions
and
transactions
need
die.
So
that's
where
this
whole
no.
This
is
where
my
hope
is.