►
From YouTube: Governance and Risk Meeting: Ep. 39
Description
The theme for this call will be 'Collateral Risk'
Governance Segment
- Richard Brown:
- Results of the Poll
- Testing the limits of the SF
- Skipping the next SF poll, polling for better polls?
Risk Segment
Monetary Policy: Vishesh Choudry
Collateral Risk: Cyrus Younessi - 'Collateral Risk Lifecycle' presentation
Weekly Narrative: Matthew V Rabinowitz
We'll then spend the rest of the time in a general Q&A session.
Discussion Thread: https://redd.it/c01eap
Podcast version: https://soundcloud.com/makerdao/sets/governance-and-risk
Summaries: https://github.com/makerdao/community/governance/governance-and-risk-meeting-summaries
Transcripts (Delayed by 48 hours) : https://github.com/makerdao/community/tree/master/governance/transcripts
Foundation Proposal: https://medium.com/makerdao/foundation-proposal-v2-f10d8ee5fe8c
Governance and Risk Framework - Part 1: https://medium.com/makerdao/makerdao-governance-risk-framework-38625f514101
Governance and Risk Framework - Part 2: https://medium.com/makerdao/makerdao-governance-risk-framework-fc8939f3d4e9
Governance and Risk Framework - Part 3: https://medium.com/makerdao/makerdao-governance-risk-framework-part-3-7a4c620f4077
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
A
Right
so
I'm
gonna
crown
you
the
head
of
risk.
There
you
go
SRT's
you
nicely.
The
head
of
risk
will
be
walking
us
through
a
collateral
risk.
Today,
I'm
not
gonna,
steal
his
thunder
I'll.
Let
him
get
into
that.
I
have
some
things
I'd
like
to
say
at
the
top
of
the
calls,
though,
I
want
to
make
sure
that
people
are
as
engaged
as
we
can
possibly
incite
them
to
be
in
these
meetings.
So
in
the
group,
chats
I've
posted
a
link
to
a
reddit
thread
in
that
reddit
thread.
A
Every
week
we
post
a
summary
of
the
call.
So
all
the
interesting
points
david
is
been
kind
enough
to
actually
recap
the
entire
things
for
us.
He
also
provides
links
to
time
stamps
in
the
YouTube
video.
So
it's
easy
for
people
to
get
a
catch
up.
It
got
caught
up
with,
what's
been
going
on
and
in
that
thread
we
continue
the
discussion
for
the
rest
of
the
week,
and
this
is
a
meme
that
I
keep
on
hitting
over
and
over
and
over
again,
but
the
it's
worth
doing
is
I'm
going
to
keep
on
doing
it.
A
That
we
have
discussions
and
we
have
debates
and
resurface
new
issues
and
new
ideas,
and
these
calls,
but
we
don't
make
decisions
here
and
whenever
possible,
I
guess
and
then
we
continue
the
debate
in
mediums
that
have
a
longer
life
cycle
or
a
life
span
than
then.
These
one-hour
calls
in
North
American,
friendly
time
zones
and
we're
currently
that's
reddit.
So
if
we
surface
some
important
issues
get
into
reddit's
that
write
a
thread.
A
Debate
with
us
will
come
up
with
some
conclusions,
get
test
the
temperature
of
the
community
and
see
how
things
move
on
from
there
we'll
be
introducing
new
tooling
in
the
future
that
are
a
bit
more
sophisticated
than
what
reddit
has
to
offer
at
this
point,
but
we
haven't
quite
outgrown
it
yet
so
in
the
interim,
continue
the
debate
there
Premal
number
two.
We
are
extremely
interested
in
hearing
everybody's
opinion
of
these
calls.
We
have
a
lot
of
really
smart
people
here.
A
It's
these
calls
aren't
designed
to
be
me,
Cyrus
vishesh,
talking
they're
designed
for
us
to
talk
and
moderate,
and
it's
our
hope
that
the
smart
people
in
this
call
will
be
asking
questions
at
every
conceivable
opportunity
if
they
have
a
microphone
feel
free.
If
you
have
a
microphone,
feel
free
to
jump
in
and
ask
a
question
whenever
you
like
interrupt
us:
it's
not
a
problem.
A
If
you
don't
have
a
microphone
if
you're
supposed
to
be
working
you're
in
a
cubby
somewhere
type,
your
question
into
a
chat-
and
one
of
us
will
get
to
that
during
the
course
of
the
call
and
we'll
ask
it
up,
ask
it
for
you.
We
also
have
been
having
sort
of
an
extended
Q&A
session
at
the
end
of
these
calls
Sophia
and
a
60
minute
mark
to
be
transitioned
to
a
general
Q&A
type
plan
and
generally
hanging
out
for
a
half
hour,
so
just
asking
whatever
might
be
on
people's
minds.
A
So
if
you're
interested
or
you
have
some
kind
of
off-the-wall
question,
wait
till
the
end
then
we'll
get
to
it
at
that
points.
I
think
that
I'm
going
to
leave
it.
There
feels
like
I'm,
forgetting
one
of
my
favorite
preambles
but
I'm,
not
sure
what
that
is
right
now
so
I'll
skip
it.
Let's
talk
about
governance
for
a
second
we're,
seeing
some
interesting
things
beginning
to
happen
in
the
world
of
governance,
and
that
interesting
thing
that
was
interesting,
I
want
to
talk
about.
It
is
something
that
makes
me
happy.
A
I
guess,
and
this
is
cool
we're
seeing
some
rational
behavior
with
the
voters,
which
is
nice
word.
Governance
is
a
new
thing
in
this
space
and
what's
a
new
thing
for
the
internet
in
general,
I
guess,
but
it's
even
newer
for
crypto
we're
all
trying
to
figure
out
how
governance
works
I
like
to
tell
people,
but
whenever
I
get
the
opportunity
that
governance
is
a
capital
H
heart
problem,
nobody
has
a
solution.
Algorithms
will
not
save
us,
it's
ultimately
about
people
and
communication
and
sociology
more
than
it
is
about
game
theory.
A
But
I
guess,
there's
an
overlap.
You
know
what
I'm
talking
about.
One
of
the
things
that
we've
seen
over
the
last
couple
weeks
are:
is
some
encouragingly
rational,
behavior,
it's
my
impression
and
I'm
willing
to
be
convinced.
Otherwise,
but
it's
my
impression
that
the
voters
are
I'm
fairly
engaged
with
the
data
that's
coming
out
of
these
calls,
and
my
impression
of
that
is
coming
from
the
fact
that
during
the
polling
process,
the
stake
weight
is
being
applied
in
a
conservative
manner.
A
A
If
things
have
gone
off
the
rails,
we
would
see
stakeholders
with
conflicting
incentives
attempting
to
skew
the
stability
fee
in
ways
that
might
benefit
them
most
and
we're
not
seeing
that.
So
the
priority
still
seems
to
be
the
maintenance
of
the
peg,
which
is
what
we're
all
here
to
make
sure
that
makes
me
super
happy.
So
it's.
A
I'm
known
for
my
optimism,
so
I
like
to
start
things
off
with
some
good
news.
The
second
thing
I
want
to
talk
about
today
is
something
that's
far
more
murky
and
far
more
complex
and
we've
been
wrestling
with
this
in
these
calls
for
weeks
now,
I
keep
on
asking
a
question
without
presenting
an
answer,
because
I
don't
have
a
clear
answer
and
this
answer
kind
of
has
to
come
from
the
community
and
so
here's
the
issue.
A
We
have
a
governance
system,
that's
basic,
but
works
its
basic
because
we're
as
a
group
as
a
foundation,
I'm
willing
to
experiment
with
governments,
because
this
is
serious
business.
What
we're
doing
here,
we
can't
really
be
playing
games
with
this
situation
or
testing
out
new
technologies
that
the
world
doesn't
know,
though,
that
we
don't
understand
how
they
work.
So
we
have
a
very
basic
polling
system.
We
have
a
very
basic
governance
system,
voting
system.
We
pull
for
signals.
We
take
that
signal.
We
add
it
to
an
executive
votes.
A
We
wait
to
see
whether
people
think
that
vote
is
good
or
not,
and
then,
when
the
community
moves
in
that
direction,
we
implement
both
those
changes
to
the
system.
It
works.
It's
great
we
this
is
actually.
This
is
another
theme
that
I
keep
on
bringing
up,
and
this
is
the
the
dangers
of
the
new
normal
and
it's
moving
into
an
a
system
and
then
assuming
that's
the
way
the
world
is
always
going
to
work
and
an
example
of
that
was
we
had
the
peghead
deviated.
We
were
locked
at
0.9,
five
point:
nine
six!
A
For
a
long
time
we
raised
the
stability
fee.
We
needed
to
be
responsive
and
agile
in
order
to
do
that,
that
required
a
weekly
cadence
votes,
and
so
every
week
we
all
got
together.
In
this
forum
we
hash
things
out.
Polls
were
put
into
the
voting
mechanism.
Community
voted
happily
we're
in
a
situation
from
the
last
three
or
four
weeks
where
the
peg
is
healthy.
The
the
voters
have
signaled
last
two
weeks,
and
this
is
another
great
signal
is
that
they
prefer
not
to
change
us
to
delay
feed.
A
Also
we're
still
looking
at
16.5
for
this
week,
so
that
raises
the
question:
is
this
new
normal,
the
one
that
we
want
to
be
stuck
in?
Do
we
need
to
vote
every
week
and
I
think
that
that's
a
question
that
needs
to
be
answered
and
we
need
to
figure
out
how
to
answer
that,
and
so
that
runs
us
up
against
this
next
conundrum
that
we
have
where,
in
the
current
voting
system
that
were
presented
with,
we
can
only
have
one
poll
at
a
time
even
more
restrictive.
A
A
Has
this
given
us
enough
breathing
room
to
consider
that
next
week
we
don't
have
a
pole
for
the
stability
fee
at
all?
Next
week
we
have
a
pole
that
is
related
to
cadence,
so
next
week,
do
we
pull
for?
Should
we
be
voting
every
week
or
should
we
be
voting
every
two
weeks
and
it's
my
thinking
that
we
should
also
have
another
poll
or
actually
even
here's
where
things
they
complicate?
We
can
only
have
one
poll
as
I
previously
discussed,
but
here's
the
answers
that
are
the
questions.
I
don't
want
answers
to.
A
How
often
should
we
be
voting,
and
what
is
what
are
the
steps
in
that
vote?
So
do
we
vote
every
week
we
vote
every
two
weeks.
Do
we
vote
in
increments
of
one
percent
for
the
stability
theory
vote
in
increments
of
two
percent
I
think
that
we
can
formulate
questions
that
answer.
They
cover
all
those
options
with
a
single
poll.
A
That
means
it's
going
to
be
some
four
I'm
thinking
about
this
correctly
for
polling
options
with
various
combinations
of
1%
2%
one
week
and
two
week
and
then
next
week
we
assume
that
we're
just
not
going
to
move
the
stability
fee
at
all,
we're
going
to
devote
next
week
to
figuring
out
what
the
proper
Cadence's
the
issues.
The
larger
issues
at
play
here
are
questions
around
apathy
and
friction
and
engagement
levels.
The
community
needs
to
consider.
A
We
have
to
rip
to
ensure
that
the
system
is
secure.
We,
the
system,
becomes
secure
by
having
a
significant
amount
of
MKR
locked
up
in
the
voting
system.
If
we
are
voting
every
week
and
the
there's
no
urgency
to
that
vote,
people
begin
to
drop
off
and
potentially
the
security
of
the
system
begins
to
drop
off
as
well,
and
so
these
are
questions
we
all
need
to
answer.
We
need
to
hash
this
stuff
out.
A
If
somebody
wants
to
go
back
and
listen
to
27
hours
of
risk
meetings,
you'll
find
out
why?
But
I
could
recap
it
for
you.
Rough
consensus
is
generally
matter
of
perception,
so
whoever
thinks
they
got
rough,
concise,
rough
consensus
in
whatever
form
they
happen
to
have
been
conversing
in
and
the
strength
of
their
opinion
generally
decides
what
rough
consensus
was.
You
can
have
20
different
people
come
out
of
the
same
call
with
different
idea.
What
rough
consensus
is?
A
The
reason
why
we
have
a
polling
system
is
so
we
don't
need
to
rely
on
rough
consensus,
so
here's
the
conundrum.
How
do
we
get
enough
consensus
to
alter
the
polling
system
when
the
polling
system
is
the
thing
that
we
use
to
get
consensus
so
I'm
gonna
kind
of
leave
that
with
the
communities
do-over
a
bit
if
people
have
solutions
or
strong
opinions?
Please,
like
fill
me
in
right
now,
if
you
want
to
think
about
it
for
a
bit.
Let's
continue
this
discussion
in
the
reddit
thread
now,
I'll
recap:
my
thoughts.
A
I
was
a
bit
over
the
map
all
over
the
map
on
this
one,
but
ultimately,
I
want
to
know
whether
next
week
we
we
swapped
out
those
stability
for
you
pull
with
a
cadence
poll
and,
let's
figure
out
those
issues,
all
right.
Nobody
has
jumped
into
the
fray
I'm,
not
seeing
anything
in
the
group
chat
as
far
as
questions
go
so
couldn't.
A
A
Yet
this
you
know
a
demand
for
a
delegate
system,
but
people
keep
on
flogging
that
as
a
concept
and
refreshingly
some
people
have
come
into
the
chat
or
to
different
forums
and
said,
like
okay,
I,
don't
understand
governance
I,
don't
really
want
to
I
just
want
to
know
that
it's
somebody,
I
trust,
does
and
I
want
to.
Let
them
vote
with
my
maker
I
think
that
that's
an
enormous
ly,
mature
opinion
in
the
position
to
take
and
I
think
that
fostering
that
would
be
great,
but
here's
something
else
that
I've
been
thinking
about.
A
Recently,
more
and
more,
we
just
had
this
a
long
discussion
about
it
in
the
in
Brockett
as
well.
Is
that
I'm
becoming
more
and
more
a
fan
of
this
idea
where
we
look
to
the
community
to
solve
these
issues
and
from
that
perspective,
its
governance
takes
on
the
same
model
that
maker
Dow
has
taken
on
it's
maker,
dad's
responsibility
to
promote
and
foster
and
grow
the
core
protocol
and
then
create
proof-of-concept
implementations
of
that
protocol
and
then
incentivize
the
community
to
build
on
it
right.
A
So
so
we
write
the
contracts
we
release
those
contracts
to
the
community.
An
enormous
third-party
ecosystem
builds
a
lot
of
amazing
tools
like
an
interested,
app
and
CDP
saver
and
numerous
numerous
other
ones.
Why
don't
we
look
at
governance?
From
that
same
model?
We've
released
the
chief,
we
have
the
code,
that's
the
core
protocol.
We
have
the
building
portal,
that's
the
reference
implementation
and
it's
my
hope
and
actually
that
the
community
as
a
whole
rises
up
and
says:
hey.
You
know
what
we
need
delegation.
We
need
somebody
to
be
trust
to
do
this
stuff.
A
We
need
to
organize
some
kind
of
campaigns
around
different
collateral
types
or
different
stability
fees
or
whatever.
What
have
you
and
then
they
build
out
some
tooling
for
us,
and
then
they
encourage
you
know
maker
community
to
join
the
experiments
of
their
delegated
voting
mechanism.
That
interfaces
with
the
chief
it's
I'm
concerned
that
maker
Dow
begins
to
solve
a
lot
of
edge
cases
and
then
adding
friction
to
the
core
voting
mechanism.
A
That
would
need
to
be
pulled
out
of
the
core
voting
mechanism
if
it
turns
out
that
it
doesn't
work
the
way
that
we
expect
listen,
I,
guess
that
was
a
long-winded
response
to
your
question.
Cyrus
and
I
kind
of
took
it
in
a
direction
that
I
find
more
appealing.
But
I
think
that
delegation
is
a
great
idea,
I'm,
just
not
sure
that
we
should
be
the
ones
that
doing.
B
A
C
A
That
maker
needs
to
do
that.
I
think
that
whoever
comes
up
so
this
is
part
of
the
discussion
that
really
got
very
interesting.
I
should
summarize
it
because
we're
talking
about
the
it
size
into
what
I
said
earlier
and
in
the
call
that
governance
in
the
crypto
space
in
the
experiment
in
general,
the
governance
that
maker
dad
does
is
not
an
experiment.
Governance
that
we
do
is
utilitarian
in
the
extreme.
A
But
people
talk
about
future
keys
to
talk
about
liquid
to
talk
about
how
log
work
for
you
to
talk
about
delegates
to
talk
about
Dow
based
votes,
there's,
there's
a
lot
of
experiments
that
can
be
had
in
this
ecosystem
and
I.
Really,
personally,
don't
think
the
test
maker
does
responsibilities
is
to
experiment
with
how
governance
can
have
Ricci
edge
cases
of
governance,
but
I
think
that
it
is
makers
other
responsibilities
to
encourage
that
behavior
in
the
wider
community
and
doing
it
we
can
to
support
it
and
help
them
rectified.
A
If
some
group
of
people
got
together
and
decided,
okay,
that
we
have
a
future
key
I,
don't
even
know
if
I'm
pronouncing
that
correctly
we're
gonna
build
it
down
around
it.
We're
gonna
spawn
up
an
errand
on
down
we're
going
to
allow
people
to
vote
bet
on
what
the
best
outcome
is
and
we're
going
to
incentivize
make
voters
that
use
our
system
with
some
kind
of
mechanism
and
then
we're
going
to
reward
people
that
go
get
correctly
in
our
future
key
model.
A
A
A
So
that's
great
for
sure.
Let
me
jump
in
there
because
I
was
not
I,
usually
like
to
be
precise,
with
my
language
and
I
was
not
being
precise
when
I
say
responsibility
what
I,
what
I
meant
was
for
us
to
develop
and
implement
and
then
release
I'm,
not
sure
that
that's
the
case
and
I
should
caveat.
This
is
all
my
opinion.
I
don't
run
make
her
down
I.
A
Don't
you
be
amazed
at
the
lack
of
control
I
have
over
over
the
greater
world,
but
I
think
that,
in
my
opinion,
the
community
can
make
this
tool
these
tools
and
decide
for
themselves
how
they
want
them
to
be
organized,
and
then
we
can
help
them
to
do
it
with
like
whether
that's
with
grants
for
them.
It's
with
additional
developer
insights,
whether
that's
having
conversations
in
these
calls
and
we
can
foster
that
activity
I'm,
just
not
sure
that
we
should
be
the
ones
to
implement.
It
is
what
I
mean.
C
Something
else
to
say
about
it
is
that
you
know
there's
a
lot
of
large
maker
holders
that
you
know
are
not
the
foundation
that
it
is
in
their
interest
to
fund
these
kinds
of
initiatives
as
well.
So
if
there
is
large
maker
holders
out
there
that
are
willing
to
give
somebody
a
grant,
you
know
even
privately
completely
apart
from
the
Foundation's
involvement.
That's
that's
a
route
that
the
community
and
maker
stakeholders
should
consider.
That's.
A
These
are
questions
that
you
know,
I,
don't
think
we
have
answers
to,
but
yeah
and
so
yeah,
I,
guess
I'm.
Just
adding
more
questions
to
the
questions,
but
I
think
delegation
is
a
great
idea
in
vishesh.
If
you
have
ideas
about
how
the
community
could
potentially
organize
around
that
or
what
those
implementations
would
look
like,
I
think
we
should
continue
that
discussion,
but
I
don't
have
those
answers.
B
Well,
I
think,
additionally,
we're
also
not
voting
on
on
a
lot
of
different
things
right,
we're
only
voting
on
the
stability
fee,
which
is
basically
a
proxy
for
the
DSR
at
this
point
and
we're
not
really
looking
like
debt
ceilings
and
liquidation
ratios
and
new
collateral
types
and
all
that
kind
of
stuff
I.
Imagine
that's.
Good
engagement
will
pick
up
significantly
once
there's
kind
of
more
on
the
line.
Yeah.
A
That's
a
great
point
like
it's
early
days
and
we
there's
yeah.
So
let
me
organize
my
thoughts
here.
So
here's
the
issues
that
ultimately
we
there's
this
impression
that
we're
not
seeing
it
as
enough
maker
staked
as
we
would
like
we're
not
seeing
enough
individual
voters
turn
out
as
we'd
like.
But
this
is
a
systemic
issue
with
crypto
in
general.
If
you
look
at
any
of
the
large
projects,
I
think
that
we're
actually
coming
out
ahead
as
far
as
voter
engagement
goes
generally
and
I
must
there's
some
outliers
that
are
different.
A
That
are
doing
things
very
well
and
we
should
probably
be
taking
a
close
look
at
how
they're
doing
it
very
well.
I
hear
nothing
but
good
things
about
D
and
there's
a
couple
other
examples
of
that.
But
we,
like
a
Sacre,
said
we're
playing
with
a
single
lever
that
moves
a
single
number
in
a
system
that
is
relatively
new
that
showed
a
drift
from
the
peg
for
a
couple
months
of
its
year,
long
over
a
year
life
cycle,
and
now
that
problem
is
over.
A
A
These
are
early
days,
I
mean
if
we
keep
on
iterating
if,
as
long
as
the
engagement
numbers
go
up
over
a
month
over
a
month
and
we're
on
the
right
path,
I
think
and
whether
people
are
apathetic
right
now,
because
we
lack
a
delegate
solution
or
whether
they're
apathetic
right
now,
because
they
just
don't
see
any
point
to
voting
at
all
because
you
know
the
peg
is
stable.
People
are
already
voting
for
the
thing
that
they
wanted
to
vote
for.
So
what's
the
point,
there's
questions.
We
still
need
to
answer.
A
Okay,
I'm
gonna
actually
got
to
I'm,
it's
nice
that
people
actually
care
and
ask
questions
about
governance,
but
I
want
to
be
cognizant
of
Tonks.
I
know
that
Cyrus
has
a
nuclear
bomb
of
Sciences
he's
gonna
draw
up
on
us.
No
pressure,
Cyrus
so
I'm
gonna
hand
that
off
to
you,
and
then
we
can
start
talking
about
risk.
B
C
A
B
A
B
B
Okay,
so
we're
gonna
sort
of
take
a
step
back
and
just
kind
of
go
through
the
collateral
risk
lifecycle
from
start
to
finish,
so
it
should
hopefully
be
a
little
bit
less
faradic
and
less
frantic.
This
is
kind
of
the
general
process
of
how
this
would
work
start
off
with
the
onboarding
collateral,
which
is
basically,
how
do
we
ingest
new
collateral
types
into
the
system,
followed
by
a
due
diligence
or
fundamental
evaluation
from
which
the
results
get
put
into
the
quantitative
model,
along
with
kind
of
all
the
trading
and
market
data.
B
Then
how
that
passes
to
governance?
How
we
kind
of
continue
and
upkeep
that
governance
over
time
and
then
I
think
after
we
kind
of
go
through
those,
we
can
start
talking
about
actual
I.
Think
by
that
point,
we'll
be
at
a
stage
where
we're
going
to
start
talking
about
specific
collateral
types
and
how
we're
going
to
be
evaluating
them.
So
this
is
obviously
not
in
outline
just
for
today.
B
There's
a
lot
of
stuff
here,
I
think
today
we're
just
gonna
talk
about
the
due
diligence
section
and
the
reason
I'm
skipping
on
board
and
collateral
is
because
there
is
kind
of
a
whole
application
process,
documentation
being
released
very
soon
and
I.
Don't
want
to
jump
the
gun
on
that.
So
sometime
in
the
next
couple
weeks,
I
think
that
should
be
coming
out
and
then
we
can
talk
about
it
in
terms
of
schedule,
I'm
just
tentatively
guessing.
B
This
is
this
is
the
one
diagram
in
today's
presentation
so
soak
it
up,
because
these
things
take
a
long
time.
Okay,
so
just
really
quickly
on
the
onboarding
application,
I'm
not
going
to
spend
too
much
time
on
this
because,
as
I
said
it's
coming
out
soon,
but
essentially
what
this
consists
of
is
a
technical
audit
which
is
essentially
in
evaluation
of
the
contract
code.
B
Looking
at
the
third
party
audit
reports,
looking
at
what
kind
of
special
adapters
whatever
is
needed
to
ingest
the
collateral
into
the
protocol
and
so
on,
there's
a
risk
audit,
where
we
kind
of
basically
just
trying
to
figure
out
if
this
is
a
complete
scam
or
not,
or
something
even
worth
worth.
Considering.
B
Essentially,
we
can
envision
a
situation
where
we
have
hundreds
of
potential
collateral
types
in
the
queue
and
we
need
to.
We
need
to
find
a
way
to
filter
and
prioritize
these
collateral
types.
So
just
kind
of
a
quick
rough
and
dirty
risk
got
it.
In
some
cases
we
might
need
to
do
a
counterparty
audit
just
kind
of
looking,
especially
for
security
tokens
looking
at
the
issuer
is
and
that
kind
of
stuff,
as
I
mentioned.
B
Somehow
you
know
these
decentralized
coins
are
gonna
have
to
present
themselves
to
the
community.
Don't
know
if
that's
gonna
happen
on
reddit
or
on
the
calls
or
whatever,
but
I
think
there
is
a
concerted
effort
to
not
have
everything
just
flow
through
the
maker
foundation,
and
then
we
just
say
here.
This
is
kind
of
this
is
what
we've
been
working
on
in
the
background,
so
yeah
we're
working
on
ways
to
make
that
as
decentralized
as
possible.
B
Talk
a
little
but
the
goals,
how
the
analysis
works
and
a
scoring
framework,
okay,
so
goals
for
looking
at
a
qualitative
assessment
for
a
collateral
first
is
we
want
to
find
risks
that
are
not
are
not
immediately
present
in
the
trading
history
right?
So
so
we
want
to
look
for
aspects
of
the
collateral
that
might
contribute
to
a
CDP
liquidation
that
we
just
we
reveal
through
a
deep
dive
into
the
organization
and
I'll
go
through
some
examples
of
these
in
a
in
a
bit
and
then.
E
D
D
D
So,
if
you're
talking
about
revenues,
yes
liquidations
produce
penalties
which
produces
fees,
but
also,
if
you're
talking
about
liquidations
above
a
certain
size
or
a
certain
frequency,
then
you
get
into
an
additional
concern
when
eath
is
3
or
5%
of
the
maker,
like
1,
3
or
5
percent
of
eath
is
locked
up
in
maker,
then
you
get
into
a
different
level
of
concern,
which
is
okay,
meiyan
current
costs
like
slippage,
and
things
like
that
from
selling
that
quantity.
So
it's
a
different
level
of
concern.
D
B
Okay,
yeah,
and
to
answer
that
question
I
think
ya
know
it's
it's
it
should
be.
It
should
be
clear
that
there
are
certain
aspects
of
collateral
type
that
could
lead
to
very
bad
situation
for
maker
Dow,
that
we'd
want
to
evaluate
from
a
qualitative
perspective
and
and
I'll
get
into
examples
in
a
bit.
Okay,
so
kind
of
mention
kind
of
touch
upon
this
last
week
process
for
how
to
actually
begin
in
valuation
collateral.
B
My
first
step
is
always
a
classification.
Broadly
we
have
bearer
assets
and
registered
assets
or
security
tokens
bearer
assets,
obviously
being
much
more
amenable
to
our
protocol.
As
you
guys
all
know,
recourse
is
not
really
an
issue
there,
there's
a
essentially
no
counterparty
risk
and
big
question
I
get
a
lot
is
obviously
around
wrapped
tokens,
wrap,
Bitcoin
and
all
the
others
that
might
come
down
the
line,
and
essentially
wrapped
tokens
are
a
form
of
registered
or
security
tokens,
because
there
is
that
counterparty
risk
which
has
to
be
evaluated
so.
B
Essentially,
that
counterparty
risk
is
an
example
of
the
recourse
analysis
that
needs
to
be
done.
So
what
is
the
process
behind
actually
claiming
real
Bitcoin
from
rap
Bitcoin?
Now
it
needs
to
be
very
carefully
studied
need
to
study
the
issuer.
In
this
case
it
would
be
bit
go
but
whomever
it
might
be.
We're
gonna
have
to
look
at
all
these
in
in
detail.
B
It
should
be
obvious
that
the
downside
here
is
if,
for
whatever
reason,
you
cannot
claim
your
underlying
asset
from
the
rap
token
then.
Well,
essentially,
you
won't
have
anybody
bidding
on
that
collateral.
The
collateral
price
will
fall
and,
as
it
goes
to
liquidation
again,
there'll
probably
be
nobody
purchasing
a
collateral
except
for
an
opportunistic
kind
of
distressed,
distressed
asset
investors,
which
might
look
to
scoop
up
scoop
up
these
assets
for
pennies
on
the
dollar
and
try
to
try
to
make
money
through
the
legal
system.
B
C
B
Think,
there's
anything:
that's
I,
I,
don't
think.
There's
anything
that
falls
outside
of
these
two.
These
two
divisions
and
really
the
importance
of
this
division
is
mainly
that
we
don't
have
to
do
too
much
of
a
recourse
analysis
right.
No
one
in
single
collateral
has
ever
thought
about
the
liquidation
process
for
each
because
everybody
knows
that
as
soon
as
you
purchase
a
through
the
through
the
auction,
it
just
directly
gets
transferred
to
your
wallet
right
in
certain
situations.
B
That
may
not
be
the
case,
and
we
need
to
be
cognizant
to
that
and
then
now
obviously
it'd
be
nice.
If
we
could
just
stick
only
with
their
assets
right,
everybody
wants
to
just
have
like
eat
only
or
whatever,
but
obviously
there's
an
extremely
high
correlation
between
a
lot
of
the
current
year.
Z22
them
okay.
So
these
are
some
of
the
these
are
some
of
the
bearer
assets
and
oh
and
security
tips
apply,
but
I
think
we're
gonna
need
to
go
through
a
careful
under.
B
We
need
to
develop
a
careful
understanding
of
these
different
tokens,
maybe
not
today,
but
as
we
maybe
we
can
kind
of
do
them
one
by
one
as
we
go
through
actual
collateral
types,
but
pretty
much.
These
are
the
main
ones
as
far
as
I
see
em
I
have
the
base
layer,
token,
such
as
ether,
Bitcoin
or
whatever,
and
and
these
base
layer
tokens
are
typically
subdivided
into
kind
of
money,
candidates
or
non
money
candidates.
B
C
B
B
Yeah
you
can
so
when
it
comes
to
when
it
comes
to
the
security
tokens.
Really
all
you're
doing
is
as
making
a
counterparty
risk
adjustment
to
your
to
your
risk
model.
So
if
you
had
ether
versus
rap
t30
that
was
issued
by
some
centralized
custodian,
then
you'd
have
to
just
factor
in
that
counterparty
risk.
B
So,
okay,
so
after
so
at
this
point,
you
should
have
a
kind
of
a
good
understanding
of
what
this
token
actually
looks
like
what
it
does.
And
then
you
want
to
probably
dig
into
the
actual
project
itself.
You're
gonna
want
to
look
at
the
team
who
they
are.
What
they've
done
I
want
to
look
at
the
technology
they're
the
competency
of
the
developers.
Look
at
the
roadmap
kind
of
adoption
have
they
they
come
up
with
you're
gonna
want
to
look
at
their
community
the
business
potential
kind
of
the
total
addressable
market
who's
their
competition.
B
What's
their
business
strategy,
all
these
aspects
need
to
be
evaluated
by
risk
teams
to
get
a
good
understanding
of
what
this
project
actually
looks
like
we're.
Also,
gonna
I
think
it's
also
important
to
look
at
the
token
distribution
and
potentially,
if
there
was
an
IC
o----,
what
their
funding
was
like
it's
their
legal
structure.
What
exchanges
are
they
on
potentially,
who
was
who
were
their
early
investors?
What
were
the
besting
periods
for
those
investors.
B
Yeah
I
think
it's
I
think
it's
fairly
clear.
That
kind
of
the
first
few
steps
of
looking
at
a
collateral
type
is
understanding
what
it
is
who's
behind
it.
What
does
it
look
like
right?
Just
get
a
good
good
overall
picture,
potentially
in
some
cases
we
could
also
go
ahead
and
build
out
evaluation
model.
This
would
be
ideal,
although
there
is
a
lot
of
overhead
associated
with
this
kind
of
stuff,
but
just
to
give
you
an
example
of
how
important
it
is
you
had.
B
There
were
legitimate
projects
at
the
height
of
the
bull
market
that
were
worth
over
a
billion
dollars
right
and
there's
nothing
wrong
with
the
team
or
the
product
or
whatever
is
just
insanely
overvalued
right
and
from
the
maker
top
perspective.
You
have
to
ask
yourself:
would
you
really
accept
an
extremely
overvalued
asset
as
collateral?
B
No
matter
how
legitimate
the
project
is
right,
so
you're
weighing
in
your
mind,
what
is
the
probability
that
the
market
snaps
back
to
reality
quite
quickly
and
actually
in
the
most
recent
bear
market
I
would
say
that
participants
generally
got
fairly
lucky
in
the
sense
that
assets
kind
of
corrected
somewhat
slowly.
Over
a
whole
year,
right
took
a
whole
year
for
it
to
hit
rock
bottom,
where
in
the
future
may
not
be
so
lucky
because
in
some
cases
would
just
take
a
couple
large
investors
to
just
completely
crush
a
coin
instantly
yeah.
B
But
if
you
want
to
do
valuation
models,
there's
some
funky
ways
to
do
it
with
these
with
the
bare
assets.
For
example,
if
you
ever
looked
at
what
a
Bitcoin
valuation
model
looks
like
with
security
tokens,
it's
fairly
easy.
You
can
just
borrow
from
the
traditional
world
of
how
a
lot
of
these
assets
are
are
evaluated.
B
It
really
just
runs
with
it
right
simple
example,
with
ether
in
2017,
when
eath
was
the
only
money
acceptable
for
icos,
everybody
needed
it
to
get
into
to
get
into
these
projects,
and
then,
when
I
SEOs
died,
people
realized
that
they
didn't
need
eat
this
money
anymore
anymore.
So
these
you
know,
that's
a
that's
a
risk
that
we
have
to
be
on
the
lookout
for
for
money
tokens
for
utility
tokens.
B
We
have
what
are
known
as
velocity
risks
where
people
just
kind
of
trade
where
people
don't
hold
on
to
the
asset
for
any
meaningful
amount
of
time
they
just
kind
of
get
in
and
out
of
them
like
they
would
arcade
tokens
and
the
I
would.
This
is
one
of
the.
This
is
one
of
the
categories
of
tokens
that
took
longest
for
the
general
investor's
base
to
really
understand
the
deficiencies
of.
B
As
we
as
we
start
to
go
through
specific
collateral
types
that
our
utility
tokens,
you
can
kind
of
pick
apart
exactly
how
serious
of
an
issue
it
is
because
that
you
know,
and
in
some
respects
utility
tokens
to
be
honest,
don't
really
have
much
of
a
value
proposition
at
all.
Yet
there
are
still
many
that
persist
in
a
wild,
and
so
we
can
start
to
discuss
why
that
is
the
case
and
in
particular,
branding
tends
to
be
a
a
big
driver.
B
In
my
mind,
a
lot
of
utility
tokens
have
insanely
good
branding
they're
housed
by
very
popular
parent
organizations
where
they
have
a
lot
of.
They
have
a
extremely
loyal
user
base.
Who
is
willing
to
you
know
trade
in
their
big
corner
ether?
For
that
utility
token,
but
yeah
philosophy
risk
is
definitely
something
we
need
to
discuss.
B
Work
tokens
are
susceptible
potentially
to
being
forked
out
and
replaced
with
a
more
native
base.
Token
governance
tokens
suffer
from
value
capture
people
who
own
governance
rights
over
a
certain
project.
In
some
cases
they
have
the
right
to
government,
but
they
don't
have
the
right
towards
any
of
the
value
that
is
created
by
good
governance.
B
B
Historically,
it's
been
extremely
favorable,
extremely
favorable,
almost
shockingly
so
right,
I
think
you
can
remember.
When
the
market
started
to
turn.
Last
year
there
were
quite
a
few
people
calling
for
just
the
absolute
annihilation
of
a
lot
of
these
token
categories,
and
it
just
didn't
play
out
quite
as
bad,
but
we
have
to
be
aware
of
how
this
might
how
this
might
occur
in
the
future.
So.
C
Cyrus
I
have
a
quick
question,
so
is
this
slide
to
do
with
like
the
estimated
shortfall
calculation,
or
does
that
already
happen
like
during
the
quantitative
side
of
things
like,
after
all,
the
qualitative
threat?
Is
this
just
like
it's
a
fact
risk?
Yes,
so
these
are
like
the
lists
of
the
main
risks
per
like
token
category
right
right.
B
And
then,
what
we're
gonna,
what
we're
gonna
do
is
we're
gonna,
essentially
take
this
entire
qualitative
evaluation
every
from
the
valuation
model,
to
the
classification
to
all
the
risks
and
we're
gonna.
Basically,
in
a
in
put
all
this
information
into
kind
of
a
a
model,
and
then
it's
gonna
spit
out
a
a
score
that
will
then
go
into
the
more
broader
quantitative
model.
It
calculates
aspects
like
the
loss
distribution
got.
B
C
B
So
so
I
mean
the
the
first
thing
is.
Hopefully
we
would
have
had
some
valuation
model
for
these
in
the
first
place,
which
is
essentially
presuming
that
these
tokens
are
worth
something
in
the
first
place
after
you
have
an
idea
for
what
it's
worth,
then
you
can
look
at
what
are
the
risks
to
it,
not
being
worth
what
you
think
it
might
be
so,
for
example,
some
of
these
some
of
these
risks
are
quite
low
probability
and,
for
example,
I
think,
I
think
the
fork
risk
of
work
tokens
is
quite
low.
Personally.
B
Really
anyone
any
risk
team
or
anyone
in
the
community
who
is
really
excited
to
see
any
collateral
be
put
into
the
system
has
to
approach
it
from
the
mindset
of
what
is
the
worst
thing
that
can
happen.
How
bad
can
this
get?
How
bad
can
make
her
doubt?
Holders
suffer,
and
this
can
happen
in
a
lot
of
different
ways.
B
Recourse
analysis
very
simple
example
and
I
use
this
a
lot.
But
what
is
a
chance
that
you
don't
recover
your
your
dollars
from
tether
exchange?
Look
to
those
things!
If
you
know,
if
the
tokens
only
let's
run
a
few
exchanges
and
they
start
to
think
listed,
that
could
be
extremely
bad
for
the
token
price,
poor
operational
management
or
leadership.
We've
seen
several
projects
run
out
of
money
when
they
really
shouldn't
have
and.
B
Yeah
I
kind
of
I
kind
of
liken
this
to
having
good
traders
instinct.
In
many
cases,
traders
don't
really
care
about
what
certain
signals
are
certain
ta
or
certain
models
spit
out.
They
just
know
that
this
is
a
terrible
idea
through
experience
and
due
diligence,
and
this
is
really
where,
where
that
kind
of
stuff
comes
in,
how.
C
B
C
B
C
B
So
first
you
have
to
you
have
to
recognize
that
something
is
wrong.
Something
is
a
risk
and
then
you
can
at
least
go
about
trying
to
attempt
to
quantify
that
risk
and
how
bad
it
could
get
and
what's
the
probability
of
it
occurring,
but
just
even
recognizing
some
of
these
risks
is
definitely
instinctual
right.
If
you
think
about
before
the
first
exchange
hack
ever
happened,
I'm
sure
people
didn't
really
think
that
exchange
hacks
were
legitimate,
legitimate
possibility
before
certain
projects
blew
through.
B
B
B
C
B
Okay,
so
essentially
take
everything.
We've
just
discussed
and
you're
gonna
want
to
spit
out
our
risk
rating,
and
this
is
basically
where
people
call
maker
Dow.
The
TCR
of
crypto
are
similar
to
some
sort
of
reading
data,
see
because
the
the
grade
or
the
score
that
we
assign
to
collateral
types
is
what
we
use
to
evaluate
the
more
quantitative
risk.
Rameters
such
as
the
stability
fee,
details
of
this
framework,
I
guess
we
can
go
over
another
time.
A
B
Doesn't
it
doesn't
so
the
actual
risk
parameters
come
after
the
rating
not
before,
but
essentially
the
risk
rating
doesn't
really
matter.
It
just
needs
to
be
something
convenient
and
easy
to
understand
and
needs
to
be
able
to
just
be
standardized,
so
they
can
compare
different
assets
against
each
other.
They
don't
necessarily
map
to
a
direct
stability
feat
right
like
it.
Seven
out
of
ten
is
five
percent
or
whatever,
although
you
could
in
some
ways.
B
So
let
me
just
do
a
couple
quick
examples.
These
are
just
like.
Oh
one,
page
one
page
example
and
then
we're
working
on
much
more
in-depth
evaluations
in
the
behind
the
scenes,
so,
for
example,
for
ether.
Obviously
we're
gonna
have
to
redo
ether
as
a
collateral
type
for
MCD,
and
we
might
as
well
kind
of
apply
this
new
framework
and
try
to
come
up
with
the
most
optimal
risk
rating
and
risk
parameters.
So
ether
would
come
down
the
pipeline
somehow,
and
then
we
do.
A
technical
audit.
Aetherium
has
been
audited
a
couple
times.
B
We
know
that
it
needs
a
wrapper,
doesn't
work
in
its
native
form.
Financial
auto
would
probably
look
at
supply.
It's
inflation.
The
team
just
very
high
level
and
then
we'll
say,
okay
ether.
This
looks
good
enough
to
be
evaluated
more
in-depth,
so
we'll
kind
of
look
at
what
ether.
The
token
actually
looks
like
space
player
token.
You
know
what
it
does.
B
We
evaluated
from
a
fundamental
perspective,
look
at
some
of
the
risks
and
then
we
give
it
a
score
right
and
that's
that's,
basically
what
the
end
of
the
qualitative
analysis
be,
and
then
this
score
is
what
gets
transferred
to
the
quantitative
model
which
we'll
talk
about
next
week.
Another
quick
example
utility
token
same
thing.
B
Okay,
so
if
you
guys
from
the
community
want
to
help
out,
there's
gonna
be
a
ton
of
work
to
do
on
this
end,
verifying
data
that
comes
in
through
the
applications
working
on
diligence
reports
and
all
that
please
reach
out
to
me
right
now,
we're
currently
working
on
a
ether
risk
model,
doing
both
qualitative
and
a
quantitative
analysis
and
yeah
could
always
use
extra
help
and
just
reach
out.
That's
it.
C
B
Hopefully
it
doesn't
get
voted
in
the
first
place,
but
if
we
need
to
so
this
will
be
part
of
the
maintenance
section,
which
is
like
a
few
a
little
bit
down
the
line.
But
essentially
we
have
to
come
up
with
ways
of
how
to
delist
coins
right.
One
method
would
be
to
just
lower
the
debt
ceiling.
Then
there's
a
couple
there's
a
couple
different
ways
to
do
it,
with
varying
degrees
of.
B
D
Yeah
so
I
mean
it's
just
kind
of
like
an
illustrative
question
of
once
the
initial
modeling
is
done
and
the
initial
parameters
are
selected,
what's
kind
of
the
view
of
the
big-picture
process
for
those
maintained
over
time,
we're
adjusting
them
if
they're
off
and
how
does
that
kind
of
fit
in
with
the
severance
process?
Yeah.
B
B
You
know
if
fit
theorem
has
some
major
scaling
breakthrough
right.
That
works.
Everybody
loves
it
then,
eventually,
it's
lower
risk
than
it
was
before
right,
so
yeah.
You
can
definitely
track
these
and
adjust
the
adjust.
This
scoring
adjust
the
ratings
over
time.
Right
I
mean
companies
have
their
risk
ratings,
adjusted
over
time,
all
the
as
well
right.
It's
the
same
concept.
C
B
D
C
D
But
since
the
sixteen
point,
five
percent
increase
I
think
the
the
valleys
have
started
to
pick
up
again
a
little
bit
and
so
I
think
we're
starting
to
see
some
increased
variability
in
die
price,
particularly
the
amount
of
dye
that
trades
below
a
dollar
and
so
I'll
dive
into
that
a
little
bit
more
in
a
a
different
graph.
It's
easier
to
see,
but
trading
volume
has
kind
of
shrank
over
the
past
two
weeks
and
then
spiked
up
again
last
night.
So
that's
just
something
to
keep
an
eye
on
I.
D
Think
those
spikes
as
we
talked
about,
tend
to
coincide
with
one
of
two
things:
either
a
lot
of
eath
being
sold
for
died
when
people
are
cashing
out
on
leverage
or
far
more
often,
people
buying
no
sorry
selling
die
in
order
to
lever
further
up
on
eath
and
based
on
what's
been
going
on
with
some
of
the
secondary
lending
rates
in
the
past
24
hours
or
so.
I.
D
Think
that
was
more
of
the
latter,
where
people
were
levering
up
in
anticipation
of
a
bit
of
a
jump
in
Heath
price
which
actually
kind
of
self-fulfilled
within
12
24
hour
time
scale
so
yeah
to
talk
a
little
bit
about
the
relationship
between
dye
and
eath
price.
So,
as
we've
kind
of
noted
since
mid-april
start
of
May,
the
trend
in
dye,
price
and
eath
price
has
kind
of
tracked.
I
think
we're
starting
to
see
a
little
bit
of
divergence
from
that.
But
it's
a
little
bit
too
soon
to
say
so.
D
In
my
analysis,
the
view
would
be
that
that
tracking
was
actually
a
reversal
of
a
previous
trend
where
people
were
levering
heavily
up
on
dye
and
just
kind
of
continually
accumulating
the
amount
of
eath
leverage
that
they
bought
with
their
dye,
and
so
they
were
accruing
more
and
more
debt,
but
at
the
same
time
they
were
levering
further
up
on
eath.
Then
at
the
start
of
may
you
know
ii.
'the
price
had
started
to
run
up
some
people
cashed
out
and
delivered
a
bit
as
eath
price
came
down
into
kind
of
the
30
ish
range.
D
We
started
to
see
people
get
a
little
bit
more
excited
and
lever
up
further,
and
so
that's
kind
of
like
the
narrative
there
is
initially
there
was
this
huge
lettering
up
then
unwinding
a
bit,
and
now
people
are
starting
to
pick
back
up
again
overall
to
talk
about
what
that
means
for
supply,
so
supply
had
been
consistently
going
down,
but
in
the
past
couple
of
days
that
has
ticked
back
up
even
this
kind
of
cuts
off
with
a
24
hour
delay.
It's
now
around
83
million.
D
So
essentially,
as
the
stability
feed
was
continually
increasing
from
eleven
point,
five
to
nineteen
point
five
percent,
there
is
a
pretty
steady
drop
in
supply
that
kind
of
stayed
stagnant
all
through
the
17
point,
five
percent
decrease,
but
then
around
the
16
point,
five
percent
decrease
that
started
to
tick
back
up
a
little
bit
and
has
now
come
up
a
little
bit
further,
but
that's
probably
a
short-term
effect
from
what's
been
going
on
with
eath
price.
So
in
general
it's
again
rich
asked
me
this
question
all
the
time.
D
How
do
we
decide
what
is
confidence
in
terms
of
which
trend
versus
a
short-term
movement
like
I,
said
I?
Think
time
is
what
generally
tells
us
that?
So,
as
we
look
at
more
of
these,
like
long
run,
averages
I
think
we'll
get
clearer
pictures,
but
my
initial
sense
is
with
the
17.5%
decrease.
There
wasn't
a
huge
effect,
but
with
the
sixteen
point
five
percent
decrease
there
has
been
a
little
bit
of
a
ticking
up
in
the
dye
supply
and
the
amount
of
leverage
that
people
have
been
seeking.
D
Now
that
leverage
that
they've
been
seeking
has
not
just
been
on
maker.
It's
also
been
on
these
secondary
lending
platforms,
which
is
a
topic
that
we've
kind
of
touched
on
so
I'll
circle
back
to
that
in
a
minute
in
terms
of
circulation
of
debt.
This
trend
has
been
like
very
clear,
as
opposed
to
others,
where
it's
harder
to
sorry
all
the
data
just
to
reload
it,
as
we
were
talking
so
after
a
reset
graph,
but
in
terms
of
the
circulation
of
debt,
the
trend
was
fairly
clear.
D
There
wasn't
a
huge
impact
on
the
amount
of
old
debt
being
paid
back,
or
the
amount
of
new
debt
being
taken
up
as
the
stability
fee
was
increasing.
All
the
way
up
to
nineteen
point:
five
percent,
once
we
hit
that
19.5%
more,
there
started
to
be
a
legitimate
impact
where
that
death
started
to
come
down
significantly
and,
and
so
in
that
sense,
the
circulation
of
debt
started
to
increase
and
debt
was
getting
younger.
D
What
is
interesting
is
that
also
coincided
with
kind
of
this
increased
traction
on
secondary
lending
platforms,
so
part
of
it
I
think
it's
good
to
consider
the
effects
of
refinancing,
but
at
the
same
time
as
the
stability
fee
was
dropped
again
to
16.5%.
We
started
to
see
this
trend
kind
of
slow
down,
and
this
is
despite
the
fact
that,
in
the
same
time,
range
dydx
and
compound
v2
were
sort
of
getting
this
renewed
traction.
D
So
just
to
touch
on
this
briefly,
I
kind
of
switched
up
this
graph
a
little
bit
since
the
last
time.
We
saw
it,
but
there's
been
kind
of
this
long-term
downtrend
a
little
bit
in
the
amount,
the
percentage
of
new
debt
of
all
the
debt
that
is
drawn
out.
What
percent
is
drawn
out
on
new
CD
piece?
So,
although
and
and
I
don't
have
this
graph
to
show
you
today,
the
amount
of
unique
users
that
have
been
interacting
with
CDP's
has
continually
increased,
which
is
a
good
metric
in
terms
of
usership
and
traction.
D
The
percentage
of
debt
that
is
being
drawn
out
from
new
CDP's
versus
existing
ones
has
actually
kind
of
periodically
held
steady,
and
then
these
Peaks
have
kind
of
decreased
a
little
bit
over
time
and
the
valleys
have
kind
of
exaggerated.
So
what
that
means
to
me
is
that
over
time
a
larger
portion
of
the
debt
is
being
drawn
out
from
existing
CDP's.
D
So
even
though
there
may
be
more
new,
individual
users,
interacting
with
Kandra
collateralization
so
was
collateralization
was
one
of
the
more
sorry
that
keeps
happening
one
of
the
more
interesting
metrics
in
the
past
couple
days.
So
we
saw
this
huge
run-up
in
collateralization
percentage
after
April
I,
think
that
was
a
hesitancy
for
people
to
make
significant
changes
to
their
collateral.
Despite
the
rise
in
eighth
Christ,
so
essentially
as
eath
popped
up,
people
were
scared
that
it
might
come
back
down,
and
so
they
didn't
make
significant
changes
to
their
CPS.
D
What's
interesting
is
that
again
has
ticked
up
a
little
bit
in
the
past
24
hours
and
it's
actually
even
higher
than
470.
Now
so
again,
I
think
it's
just
kind
of
this
valley
has
kind
of
started
to
be
hit
around
16.5%
in
terms
of
the
attractiveness
of
leverage,
even
at
like
the
eath,
you
know,
232
to
50
price
range
to
just
touch
on
dye
price,
real,
quick,
so
kind
of
reflecting
what
I've
been
saying.
There's
been
this
widened
spread
in
terms
of
dye
prices
and
where
dye
is
traded.
You
can
see
that
also.
D
Everything
was
okay,
which
I
think
was
broadly
the
sense,
but
then
people
started
to
decrease
that
stability
fee
and
then,
over
time,
around
the
end
of
the
end
of
May
starting
of
June,
we
started
to
see
kind
of
a
slight
drift
back
down
below
the
peg,
so
I
think
you
know.
Perhaps
these
are
indicators
that
16.5%
is
slightly
too
low
or
maybe
just
right-
and
this
is
a
short-term
effect-
there's
no
real
way
to
tell
the
difference
between
those
two
things.
D
So
this
is
some
of
the
secondary
lending
platform,
trading
volume
or
activity
outstanding
volume.
So
what
we
see
is
in
the
past.
Let
us
show
the
full
scale
since
the
the
launch
of
these
platforms.
They've
gotten
a
ton
more
of
the
outstanding
die
Baro
volume
on
the
secondary
lending
platforms,
but
in
the
past
couple
of
weeks
that's
actually
held
fairly
steady
and
then
in
the
past
24
hours
that
actually
came
down
a
little
bit,
but
it
was
both
borrow
and
supply
that
came
down
even
though
the
overall
die
supply
ticked
up.
D
D
I
think
there
is
a
it's
very
difficult
to
measure
people's
willingness
to
buy
a
dive
below
a
dollar,
but
I
think
what
we've
seen
is
the
same
kinds
of
stressors
that
in
the
past
had
caused
die
price
to
drift.
Far
below
the
peg
have
now
had
a
lessened
impact
on
die,
rise
and
I.
Think
that
is
most
likely,
because
people
are
more
willing
to
arbitrage
died
when
it's
trading
below
a
dollar.
Yes,
you've
seen
in
the
long
run
more
confidence
that
it
will
return
to
peg
and
they'll
have
a
chance
to
make
a
profit,
but.
B
I
think
it's
important
to
distinguish
that
if
you
I
mean
just
looking
at
this
chart
that
the
vast
majority
of
any
die
trading
below
a
dollar
is
on
Coase's
right
and
people
don't
go
to
Elisa's
to
buy
cheap
died.
This
is
a
result
of
market.
This
is
a
result
of
retail
speculators.
Jumping
the
bid
ask
to
buy
or
sell
e,
which
results
in
a
cheap
die
price.
B
B
D
So,
to
be
clear,
the
upper
tail
100%-
if
you
look
at
like
coinbase,
for
example,
that
price
the
eath
die
price
does
tend
to
stay
centered
closer
around
a
dollar.
Actually,
this
is
somewhat
uncharacteristic.
I
think
this
is
an
effect
of
some
of
the
frenzy
that
happened
in
the
last
24
hours,
where
you
see
more
of
this
Oasis
long
tail
towards
the
the
lower
prices.
D
Usually
it's
actually,
you
know,
swap
that
tends
to
dominate
the
lower
tail
prices,
primarily
due
to
slippage
I'm
assuming,
but
also
to
some
extent,
because
people
are
going
to
Eunice
wat
because
they
need
that
immediate
liquidity
and
they
are
willing
to
take
a
bit
of
a
haircut
and
so
to
your
point,
Cyrus
I.
If
I
understand
your
point
correctly.
D
Yes,
most
of
the
mainstream
trading
sources
do
tend
to
sit
around
a
dollar
the
lower
tail
dye
prices
is
usually
once
one
is
in
the
liquidity
crunch
and
they
need
to
get
quick
access
primarily
because
they're
trying
to
refinance
or
they're
trying
to
lever
up,
and
they
don't
want
to
miss
that
jump
in
Heath
price.
That's
why.
D
B
A
D
E
If
the
DSR,
plus,
whatever
the
Oracle
fees,
are
going
to
be,
plus
whatever
the
risk
team
will
be,
plus
that
call
it
risk
premium
of
the
collateral
package.
I
don't
want
to
call
it
collateral
type.
It
really
the
package,
because
it's
not
only
if
it's
deep,
it's
eat
with
whatever
collateralization
ratio,
debt
ceiling,
liquidation
right
show
all
of
those
things
that
you
mentioned
before
about.
They
can
all
be
different
and
can't
change
its
that
risk
premium.
Those
four
things
equal.
What
would
be
the
that
would
be
stability
fee
for
a
given
collateral
package
right?
E
So
the
question
becomes,
if
you
really,
basically,
let's
assume
for
a
moment
that
Oracle
fees
and
the
risk
fees
are
more
or
less
going
to
be
static
to
discount
the
malicious
ignore
them.
For
the
time
being,
there
is
a
natural
trade-off
between
the
DSR
and
the
risk
premium
that
gets
associated
with
that
collateral
package.
One
that's
somewhat
in
bursts,
where
you're
taking
the
DSR,
which
is
a
riskless,
excluding
technology
risk.
E
It's
a
riskless
return
versus
a
risky
return
that
you
have
to
ensure
pranks
is
a
big
big
game,
and
that
kind
of
you
know
my
narrative
thing
I
put
together
a
presentation
and
forgive
the
fact
that
it
could
have
been
drawn
by
my
third,
my
third
grader,
but
forgive
my
artwork.
But
it
stresses
the
point
which
I
guess
I
can
try
and
share
on
here.
C
C
E
So
you
know
as
we
as
we
assume
that
we
have
a
risk-free
asset,
the
percentage
of
a
given
allocation
to
a
DSR
compared
to
the
the
V,
the
value
of
R.
Its
component
is
inverse
the
more
risky
the
further
you
go
to
the
right,
the
less
percentage.
It
goes
to
the
DSR,
which
somewhat
leads
to
the
logic
that,
as
assets,
become
more
risky,
the
percentage
split
it's
the
same
graph,
but
in
a
different
interpretation
right.
E
This
is
all
after
the
fact
of
everything
that
was
calculated.
One
of
the
components
that's
going
to
be
needed
will
be
the
breakdown
between
what
percentage
on
a
collateral
package
we're
going
to
say,
gets
allocated
to
the
DSR
and
what
percentage
gets
allocated
to
the
VAR
as
kind
of
our
our
launch
percentage.
Wouldn't.
B
E
Well
then,
they
they
equal,
the
ultimate
stability
fee
right
so
I
mean
when
you're
launching
at
the
very
first
time
again,
you
pick
pick
a
US
Treasury
for
a
moment.
They
don't
have
to
be
at
the
expense
of
another,
but
they're
connected
right
one
once
we
know
what
that
once
we
know
what
that
percentages
are,
that
the
question
really
becomes
after
the
fact
that's
like
to
me
there.
E
Is
what
percentage
not
excuse
me
not
what
percentage,
but
we
the
sum
of
those
two
things,
because
when
we
change
the
DSR
and
changes
it
for
everybody,
so
we
have
to
know
what
the
percentage
breakdown
between
the
DSR
and
a
var
for
a
given
collateral
type
will
be,
and
it
shouldn't
change
that
that's
my
point.
It
really
should
be.
The
percentage
should
be
known
and
should
be
set
for
a
collateral
package.
That's
floating
out
there
very
to
invent
security,
that's
traded
in
the
month
public
market.
E
E
E
B
So
I
this
is
okay,
I,
think
I,
think
I
see
what
you're
saying
you're
you're
saying
that
if
a
if
some
particular
asset
ends
up
generating
an
enormous
amount
of
dye
and
that
one
specific
asset
is
responsible
for
essentially
the
dye
price
being
weak,
then
you're
you're,
suggesting
that
a
a
penalty
should
be
applied
to
that
specific
collateral
asset
and
not
to
all
assets
equally
through
the
TSR.
Is
that
right,
absolutely.
E
Am
I
correct
because
the
challenge
is
not
when
you
have
to
the
challenge
is
when
you've
got
60
and
some
of
them
mint
dye,
some
of
them
and
again
forgive
the
drawing
you
know
when
you
have
x
euro.
Some
of
them
are
mentioning.
Some
of
them
are
burning,
and
this
is
only
whatever
I
wrote
on
there
three
or
four,
but
if
you
had
400
of
them,
we
have
to
find
a
way
to
distinguish
what
is
the
blended
DSR
the
to
move
up
by
four
basis
points?
Or
is
it
down?
E
And
it's
all
it's
a
gigantic
simultaneous
equation.
The
the
p
of
the
ID
of
this
out
of
the
PID
comes
later.
The
p
of
it
is,
is,
ironically,
very
similar
to
circuit
theory
of
into
the
gigantic
simultaneous
equation.
That's
all
weighted
based
upon
the
die,
that's
outstanding
per
given
collateral
type-
that's
forgive
my
ignorance,
I,
don't
I
haven't,
don't
know
how
I
make
the
assumption
that
in
an
MCD
world
we're
going
to
be
able
to
see
which
collateral
min
to
die
and
which
collateral
types
burnt
it
that'll
be
visible
on
the
blockchain.
E
C
E
E
The
only
way
I
understand
how
we
can
do.
That
is,
if
you
believe
the
percentage
is
the
same,
but
you
drop
the
collateral.
Is
it
mean
you
drop
the
debt
ceiling
basically
down
to
zero
and
you
launch
another
collateral
package
same
underlying
collateral,
but
with
different
characteristics
and
a
different
breakdown
between
the
DSR
in
the
VAR.
It's
the
only
way
to
basically
wind
down
one
asset
class
in
exchange
for
another
of
which
an
efficient
market
should
show
up
to
basically
refinance
their
debt
from
a
more
expensive
var
to
Alexis
yeah.
E
C
E
That's
my
point:
you're
lowering
the
debt
ceiling,
basically
the
zero
for
that
asset
class
that
collateral
package,
so
no
new
diet
can
be
minted,
but
the
diet
is
down
out
there.
It
just
winds
down
it's
no
different
than
having
a
collateral
cumulative
promotional
package.
When
you
get
a
credit
card
in
the
introductory
rate,
is
zero
percent
and
then
later
it
changes.
It
winds
itself
down.
E
C
C
So
we're
looking
at
this
graph
right
and
this
graph
kind
of
assumes
everybody's
on
like
an
equal
on
an
equal
stability
fee
right,
but
the
reality
is
that
you
know
this
is
like
percentage
of
DSR
usage,
but
it
wouldn't
it
be
unlike
the
same
type
of
graph,
but
instead
of
DSR
usage,
like
actual,
like
DSR
base
rate
on
all
of
these
different
tranches
of
collateral.
Wouldn't
it
be
just
a
common
denominator,
wouldn't
it
be
as
simple
as
that.
B
Some
third
party,
some
counterparty
whomever,
is
kind
of
the
recipient
right,
the
the
counterparty
of
that
margin,
trade
or
whatever
the
DSR
is
essentially
a
rate
that
gets
paid
from
the
borrower
to
the
recipient
that
compensates
them
for
wanting
to
hold
that
die
and
not
in
turn,
immediately
sell
it
for
less
than
$1.
However,
you
want
to
think
about
it
that
that
is
the
DSR
is
a
is
a
rate
applied.
That
is
for
the
benefit
of
the
counterparty
of
that
leverage
trade.
B
Now,
it's
not
entirely
clear
to
me
why
the
recipient
of
the
counterparty
of
the
die
created
from
a
Treasury
collateral
would
require
a
different
compensation
rate
from
the
one
from
the
recipient
of
the
nobody's
die
trait
because
they
both
are
just
holding
die
right
so
that
that's
what
Webber
creates
die
has
to
pay
the
same
fee
to
the
recipient
of
that
die.
Correct.
B
Right
now,
additionally,
if
the
asset
is
riskier,
which
is
a
risk
to
maker
Dow,
there's
an
additional
credit
credit
premium
applied
crime.
So
now
what
so?
What
you're
suggesting,
though,
is
that
if
there
is
an
enormous
amount
of
dye
being
printed
off
of
eath,
for
example,
and
it's
depressing
the
dye
price
that
you
don't
think
that
the
DSR
should
be
applied,
but
rather
in
a
collateral
system.
E
It's
not
that
I'm
suggesting
the
DSR
shouldn't
be
used,
I'm,
saying
that
it
shouldn't
be
used,
it
should
be
used
in
proportion
and
that
proportion
should
be
known,
because
if
we
follow
the
model
where
you're
just
talking
about
where
what
percentage
is
the
question
so
like
if
we
ultimately,
let's
just
pick
for
a
second,
the
best
example
is
for.
Did
we
have
a
Treasury
all
together,
we're
just
gonna
use
MCD,
but
we're
going
to
forget
the
M
and
we're
just
gonna
have
a
vs?
Are
we
launched
it
all
right?
E
So
our
first
instinct
will
be
like
like
I've
mentioned
before.
We
need
to
get
er
a
back
and
forth
over
and
over
to
basically
get
rid
of
the
excess
supply,
which
means
the
DSR
will
find
its
way.
You
can
get
up
to
I,
don't
know
five,
six,
seven,
eight
nine
percent
and
then
both
of
them.
The
DSR
as
well
as
this
be
the
VAR
for
just
eager,
will
find
themselves
to
be
compressed
and
fall
back
down
over
time.
E
But
while
it's
sitting
at
five
or
six
or
seven
percent,
when
the
DSR,
you
will
absolutely
obliterate
your
ability
to
ever
launch
any
type
of
lower
risk
asset,
because
the
DSR
plus
that
risk
premium
is
way
outside
the
market,
because
it's
way
outside
the
aggregate
risk
that
it's
telling.
Because
we
made
we
because
we
put
a
more
risky
asset.
What
we're
not
correctly
pricing
the
risk.
For
that's
my
point
right.
E
I'm
not
really
talking
about
the
price
I'm
talking
right
now,
I'm,
making
the
base
case
that
the
price
is
just
constant
at
the
clerk
is
temporarily
constant,
and
then
you
introduce
a
more
risky
accent
and
a
far
less
riskier
asset
and
both
of
them
in
dive.
What
do
you
do
and
how
do
you
determine?
How
can
we
count
I'm,
not
making
the
case,
then
we
can't
nothing.
D
E
Should
mop
up
the
excess
supply
from
collateral,
a
B
or
C
more,
the
only
way,
I
know
how
to
do.
It
scientifically
is
to
lock
a
percentage
breakdown
between
the
DSR
and
the
bar
for
each
asset
as
they're
used
and
then
wind
it
down
as
the
conditions
on
the
ground
change
based
on
the
credits,
credit,
the
risk
teams,
analysis
of
it.
If
you
know
how,
how
else
could
be
determined?
E
E
That's
why
we
have
ones
on
the
Left
that
are
blue
and
ones
that
are
on
the
far
right
that
are
purple,
because
if
we
don't,
if
we
make
it
a
flatline,
then
we're
basically
treating
the
less
riskier
asset
is
getting
disproportionately
is
going
to
have
to
pay
more
whenever
a
more
riskier
asset
causes
problems.
So.
B
E
It's
not
only
decrease,
it's
only
decreasing
so
be,
there's
excess
sigh
that
got
mint
that
got
burnt
from
some
location
and
we
have
to
adjust
the
DSR
down,
but
will
by
what
amount
that
that's
my
point,
this
piece
of
it,
this
piece
of
it's
far
more
mechanical.
It's
far,
more
close,
it's
closer
to
circuit
theory
than
anything
else,
because
once
we
know
these
percentages
that
things
that
need
to
change
are
the
risk
cards
between
the
credit
risk
characteristics
and
how
much
we
apply
the
DSR
to
change
the
entire
system.
E
E
What
I'm
trying
to
get
at
is
that
market
forces
the
ultimate
stability
fee,
that
an
asset
class
comes
together.
If
we
ultimately
have,
the
underlying
ideas
are
too
high
because
we're
not
properly
allocating
the
risk
we
it's
not
that
maker
won't
choose
to
the
market
will
dictate,
for
example,
just
as
a
base
case.
You
know
if
we
ever
want
to
put
on
Treasuries
on
to
this
system,
but
the
DSR
is
5%.
B
E
B
It's
more
of
the
operational
between
them
care
holds,
which
I
mean
we
can
definitely
discuss
on
this
call
for
sure.
But
it's
not
if
maker
doubt,
holders
want
to
allocate
those
percentages
in
a
certain
way
at
the
social
consensus
level
they're
more
than
welcome
to,
and
then
we
can
try
to
figure
out
what
what
the
right
parameter
should
be.
B
But
I
don't
think
well
he's
speaking
from
the
wrist
angle,
can't
say
what
parameter
should
or
shouldn't
be
whatever
I
mean
if
the
goal
is
to
be
inclusive
of
all
collateral
types,
no
matter
what,
then
that's
something
that
certainly
needs
to
be
discussed,
but
it's
not
clear
to
me
what
exactly
the
mandates
are.
Probably
in
the
coming
months,
I'm.
C
Still
trying
to
think
of
it
in
math,
you
say:
I
got
to
probably
reread
your
your
post
if
you
go
through
the
math
of
it,
because
the
way
you
describe
that
equation
started
to
help
me
understand,
but
I
still
just
kind
of
see.
You
know
the
you
know
the
credit
premium
on
all
of
these
various
collateral
types
being
exactly
that
the
premium
based
on
the
actual
risk
of
the
asset
and
then
that
DSR
is
really
just
what
goes
up
and
down
in
response
to
monetary
policy.
C
E
E
Just
imagine
like
there's
a
like,
unlike
this
is
actually
really
importantly,
unlike
dye
and
people
who
are
people
want
to
use
leverage
based
on
E,
which
is
an
exceptionally
elastic
desire,
where
we've
seen
that
people
are
willing
to
have
stability
fees
that
go
from
zero,
all
the
way
up
to
almost
twenty
right
in
certain
other
markets,
let's
say
real
estate
country
debt
market
sovereigns
once
you
reach
a
certain
percentage
above
where
that
tolerance
is
defined
by
the
external
market,
its
inelastic
there's
zero
desire,
it's
blown
out
of
the
water.
So
if
a
tree.
E
C
B
Think
there
could
be
a
rational
reason
to
not
lock
it,
for
example,
if,
if
maker,
I'm
I
I
really
don't
think
this
will
be
the
case,
but,
for
example,
if
there's
some
phenomenal
asset
XYZ
that
it's
generating
insanely
high
stability
fee
at
low
risk,
then
you
know
to
hell
with
everything
else.
Right,
potentially,
that's
one
I
mean
I'm
again,
that's
that's,
not
even
the
philosophy
of
maker
down
as
far
as
I'm
concerned
I'm
just
saying
it
definitely
needs
to
be
carefully
spelled
out
and
from
the
consensus
on
how
how
we
want
to
kind
of
drive.
C
E
Continue
the
discussion,
the
point
I'm
trying
to
bring
up
is
not
that
of
this.
This
concept
should
be
applied
to
being
any
aspect
of
the
risk
and
the
risk
in
my
respectful
and
it
needs
to
make
those
decisions
about
how
risky
a
given
collateral
package
is
with
all
of
its
characteristics
and
define
it
plotted
and
set
it.
B
This
has
to
answer
a
question
about
parameters
really
quickly.
Who
can
change
them?
I
mean
for
how
often
I
mean
who
is
obviously
I'm
care
holders,
changing
how
often
Kate
into
something
that
I
have
to
figure
out.
Eventually,
what
parameters
can
I
think
any
parameter,
this
subject
to
be
changed,
and
what
do
you
mean
by
does
that
model
converged
to
SCD?
Well,.
D
It's
a
more
stable
system
could
theoretically
be
that
the
answer
to
the
most
stable
system
in
that
scenario
is
just
one
single
collateral
type
that
is
like
relatively
well
trusted,
which,
although
would
make
sense
in
terms
of
the
individual
value
at
risk
and
DSR
allocations,
might
overall
from
some
sort
of
holistic,
bird's
eye
view
perspective
not
be
optimal,
because
we
are
trying
to
maintain
this
kind
of
relative
lack
of
correlation
between
assets.
Writers
need
to
keep
in
mind
yeah.