<p>While the focus is currently to onboard up to 4 <a href="https://forum.makerdao.com/t/poll-rwa-working-group-centrifuge-model/4381">Centrifuge-based <span>11</span></a> collateral for the June, 11th executive, we are also working on a standardized version of the Trust model. This post is giving you news on where we are heading and let you provide feedback if needed.</p>
<p>The high-level idea we have can be represented by the following schema:</p>
<p></p><div><a href="//makerdao-forum-backup.s3.dualstack.us-east-1.amazonaws.com/original/2X/e/eabd06be09f4d1bbc74044933f5cd18a3d9f1c5d.png"><div>
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<p>The underlying assets will be managed by a Delaware Trust or a Collateral Agent. The main difference is that the first one is a legal entity but not the second (but is more expensive).</p>
<p>In both cases, the flow of money passes through the Cayman Islands. This is due to tax issues as it is unclear how you can deduct interest expenses on a DeFi loan. As Cayman Island doesn’t have income taxes on foreign revenues, that solves the issue.</p>
<p>The problem with Trust and Collateral agents is that they don’t want to take any decision. Someone needs to tell them what to do and take the possible liability. This is quite sensitive when the decision is whether or not you should accept to make a loan or liquidate the collateral. <a href="https://forum.makerdao.com/t/sixs-rwa-001-6s-preliminary-contracts-assessment/8233">In the 6S scheme <span>5</span></a>, a Trust Sponsor has the capacity to do almost everything so the Trustee is quite useless.</p>
<p>The Trust Sponsor, the Cayman Orphan SPV, is a Trust. The same issue as the Delaware Trust is present, they don’t like making decisions and risking a liability. This is why you have Maarten in the 6S case. We are working on how to make this decision process secure and defending MakerDAO interests. We consider two cases:</p>
<h1>
<a name="triggering-predefined-action-and-judgment-calls-1" href="#triggering-predefined-action-and-judgment-calls-1"></a>Triggering predefined action and judgment calls</h1>
<p>In most cases, we need someone to trigger a simple predefined action, i.e. transferring the money from the Cayman Entity to the Delaware Trust.</p>
<p>In some cases, this might ask for a judgment call. Should we trigger a liquidation of a defaulting note? Should we accept a specific note as collateral presented by an asset originator following some framework?</p>
<p>Those are not the kind of decisions where we want to engage Maker Governance.</p>
<p>Having 3 Maker Representatives and the need of 1 signer (triggering predefined action) or 2 signers (more complex situations and adding a new signer in case of a default of one) would bring enough safety and redundancy. Having many signers disperse the liability as well (if any).</p>
<p>Those Maker Representatives could serve on the Cayman Orphan SPV and/or the Wyoming DAO. As the Delaware Trust has access directly to the funds, we don’t want the Maker Representatives to any power there (they might still instruct the Trustee or the Collateral Agent).</p>
<p>I would expect Maker Representatives to be Mandated Actors (RWF, Legal, …).</p>
<h1>
<a name="governance-decisions-2" href="#governance-decisions-2"></a>Governance decisions</h1>
<p>While having a Verification Agent can be one way to enable modification from the MakerDAO Governance, another path could be to use a Wyoming DAO. This legal entity recognizes the smart contract decisions as legit.</p>
<p>This might be useful when we want to change significantly the design or windup an investment.</p>
<p>For tax reasons, no financial operations are done in this legal entity. This entity is not an incorporated version of MakerDAO. It is merely a subsidiary to enable Governance decision-making for Real-World partners.</p>
<p>–</p>
<p>We are in the process of hiring a Cayman law firm (which will analyze the 6S “Cayman-part” as well). We are getting late on the US law firm as well (internal processes on their end to work with a “DAO”). This will lead to significant expenses on the RWF end (the 20k per month from the budget will be eaten for sure).</p>
<p>The Wyoming DAO part will probably come in a second stage.</p>

Trust model - Work In Progress While the focus is currently to onboard up to 4

Trust model - Work In Progress

ALM framework for MakerDAO The following is a proposal for an ALM framework for MakerDAO

ALM framework for MakerDAO

<h1>
<a name="summary-1" href="#summary-1"></a>Summary</h1>
<ul>
<li>This paper models the balance sheet over the next 18-month based on assumptions coming from CUs</li>
<li>The solvency constraint (Capital at Risk &lt; Surplus Buffer) is a limitation but should be manageable by allocating more carefully, reducing expenses and taking into account that some opportunities will not be concluded</li>
<li>The liquidity constraint is not a concern, there is still an excess of 700M of liquidity in the tighter maturity (1-week)</li>
<li>It is suggested that community use this work as a basis for discussing capital allocation for MakerDAO and strategic directions</li>
<li>While liquidity is not an expected concern, the current Surplus Buffer limits our ability to invest if we want to above to the solvency constraint</li>
<li>One could consider the current pipeline of assets as light, but it is already big enough to put all our Surplus Buffer at work</li>
<li>If we exclude a capital raise, capital creation should be seen as the main current objective of MakerDAO</li>
<li>
<strong>The key learning is that we need to get back to profitability with the current Surplus Buffer to increase it, invest more and grow faster.</strong>
<ul>
<li><strong>If we can’t get back to profitability with the current Surplus Buffer we will get stuck</strong></li>
</ul>
</li>
<li>Beside hoping for better rates in DeFi, there is two solutions to this problem:
<ul>
<li>Reduce expenses</li>
<li>Allocate to higher RoE investments</li>
</ul>
</li>
</ul>
<h1>
<a name="open-questions-for-the-community-2" href="#open-questions-for-the-community-2"></a>Open questions for the community</h1>
<p><em>Feel free to ask/discuss others questions.</em></p>
<ul>
<li>Would you like to see a different high-level allocation? This one was bottom-up (deal we have, where does that lead us). Would you prefer the opposite process (community deciding asset allocation then community finding the deals)?</li>
<li>Do you have a view on the constraints, of both solvency and liquidity, that MakerDAO should decide? (already asked before, still trying to get some thoughts)</li>
<li>How should we optimize? All else being equal, we should invest in the highest RoE first. But reality is more complex than that. You can’t stop providing DeFi loans because TradFi rates are higher today. What are your thoughts about this subject?</li>
</ul>
<h1>
<a name="introduction-3" href="#introduction-3"></a>Introduction</h1>
<p>The article <a href="https://forum.makerdao.com/t/a-balance-sheet-approach-to-executing-an-aggressive-growth-strategy-the-road-to-300m-revenues/14818">balance sheet approach to executing an aggressive growth strategy <span>5</span></a> called for CU collaboration to improve the input parameters and get a clearer view on the project’s pipeline. This work provides an 18 months forecast of the MakerDAO balance sheet.</p>
<p>MakerDAO remains a startup operating in an uncertain and volatile market. It is also impossible to predict governance actions and wishes as MakerDAO is decentralized. It is one forecast of many that can be as valid as this one as all depends on assumptions. While the model is unlikely to be right, we will use it as a guide to infer learnings that might be valid even with deviations.</p>
<p>The model source used for this analysis can be found <a href="https://1drv.ms/x/s!Asg5FEQOu74tg2R3sdY-QCGFmknP?e=Qnceh8">here <span>4</span></a>. The broader <a href="https://forum.makerdao.com/t/alm-framework-for-makerdao/12994">ALM framework can be found here <span>12</span></a>.</p>
<h1>
<a name="methodology-4" href="#methodology-4"></a>Methodology</h1>
<p>The methodology remained similar to <a href="https://forum.makerdao.com/t/a-balance-sheet-approach-to-executing-an-aggressive-growth-strategy-the-road-to-300m-revenues/14818">the original work <span>5</span></a> but was extended in many ways:</p>
<ul>
<li>While still regrouped into buckets (changed a bit see below), the assets are now more detailed, and we track 27 assets types</li>
<li>We added a time component to model the evolution of the balance sheet over 18-months and taking into account the timeline of investments</li>
<li>We added a more elaborated maturity profile taken from <a href="https://forum.makerdao.com/t/modeling-dai-maturity/15961">previous research <span>2</span></a>
</li>
</ul>
<p>The asset categories are the following:</p>
<ul>
<li>Crypto-vaults: previously crypto-backed loans. It is the same thing but adds DeFi Money Markets (D3M Aave and Compound). It was grouped as it is of the same nature, and we are now able to track maturity more precisely in another dimension.</li>
<li>Crypto-assets: contains all crypto-related assets held outright by the protocol. It includes <a href="https://forum.makerdao.com/t/signal-request-deploy-the-balance-sheet-in-eth/14834">ETH holdings</a> and <a href="https://forum.makerdao.com/t/mip76-makershire-redux/16400/1">Makershire redux</a>. Due to the speculative nature of crypto-assets, the profit they should generate are not taken into account in recurring metrics nor in the Surplus Buffer.</li>
<li>Private Credit: Previously RWA. RWA is confusing for people as it is used for risk weighted assets in TradFi.</li>
<li>Public Credit: Previously Short-term bonds.</li>
<li>Stablecoins: No change, it represents the PSMs, the stablecoins LP are considered as stablecoins for simplicity. No yield is currently attributed here but SF, in association with other CUs, is working on plans to deliver permissionless on-chain RoA without divesting or reallocating away from stablecoins.</li>
</ul>
<p>The table below presents the main characteristics of each asset type. Each asset is attached to a category (described above) and given an owner within MakerDAO CUs. Then, you have the Return over Asset (RoA), which is the expected average return of this asset, and the Capital at Risk (CaR), which represent the possible loss that this asset might generate over a 1-year horizon. CaR multiplied by the exposure of an asset gives the proposed requirement in terms of equity (Surplus Buffer) to invest safely in such an asset. The next column, Return over Equity (RoE) is just the division of RoA by CaR and presents the expected possible return using the minimum amount of equity and a cost of DAI funding of 0%. The reader can refer to the <a href="https://forum.makerdao.com/t/alm-framework-for-makerdao/12994">ALM Framework <span>12</span></a> for more details.</p>
<p>The remaining columns are inputs to model exposure to those assets with a starting date (in the past for what is already present), a starting and ending debt ceiling (DC, assumed to be fully used), and a ramp up time in month which interpolate between starting DC and ending DC.</p>
<p></p><div><a href="//makerdao-forum-backup.s3.dualstack.us-east-1.amazonaws.com/original/3X/a/0/a05219ce77016550e118a3fb56cb58d2f1adea62.png"><div>
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<p>For the expenses of MakerDAO we are using recent numbers and keeping them constant over time.</p>
<p>As always, modeling is about trade-offs so there are plenty of limitations:</p>
<ul>
<li>The model doesn’t take interest rate fluctuations, it is unlikely that rates will stays constant</li>
<li>The model assumes a constant CUs expenses and doesn’t model MKR compensation</li>
<li>We don’t model a change in DAI demand</li>
<li>We don’t model a diversification effect</li>
</ul>
<h1>
<a name="results-5" href="#results-5"></a>Results</h1>
<h2>
<a name="exposure-6" href="#exposure-6"></a>Exposure</h2>
<p>The following chart shows the evolution in terms of exposure (asset allocated) in the different asset classes. As you can see there is an increase in crypto-vaults (IVs, L2/sidechains launches) and private credit (HVB, Centrifuge/Blocktower, …). Yet, the bulk of the increase on the public credit side with Monetalis/Clydesdale, Backed and two more unassigned short-term bonds buckets.</p>
<p>Crypto assets, represented by ETH holdings and Makershire remain quite muted during this period.</p>
<p></p><div><a href="//makerdao-forum-backup.s3.dualstack.us-east-1.amazonaws.com/original/3X/3/6/3658390fde85069641adc29fc16ed75ae0459653.png"><div>
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<h2>
<a name="makerdao-profitability-7" href="#makerdao-profitability-7"></a>MakerDAO profitability</h2>
<p>The chart below shows the annualized recurring net protocol income (rNPI) by contributors. The expense side (light pink) is kept constant and based on the current expenses. MKR compensation is not taken into account (but is one order of magnitude smaller at this price level).</p>
<p>Crypto-vaults are providing the bedrock of revenues during the period but fail to compensate for the operating expenses. While both crypto-assets and private credit are providing revenues, those are not main drivers. The public credit investments are providing the bulk of the rNPI. Notice that while represented, crypto-assets are not contributing to the rNPI due to their speculative nature.</p>
<p></p><div><a href="//makerdao-forum-backup.s3.dualstack.us-east-1.amazonaws.com/original/3X/0/c/0c28671a816170071f628b7f5b6ad07382d8ec8a.png"><div>
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<p>Overall, at the end of the period under study, revenue mix is leaning towards TradFi credit. This is mainly due to the depressed lending rate in DeFi. We expect that TradFi and DeFi rates will converge providing a more balanced revenue mix.</p>
<h2>
<a name="capital-adequacy-8" href="#capital-adequacy-8"></a>Capital adequacy</h2>
<p>According to the <a href="https://forum.makerdao.com/t/alm-framework-for-makerdao/12994">ALM Framework <span>12</span></a>, we need to maximize revenue generation while keeping the solvency and liquidity constraints. Let’s start with the solvency constraint and check if we keep an adequate capital buffer (i.e. the Surplus Buffer).</p>
<p>As you can see in the chart below, we start with a Surplus Buffer bigger than needed to sustain the financial risk generated by the assets (mainly crypto-vaults). The increase in crypto-vaults (due to institutional vaults and L2/sidechains MCD deployment) increases the equity needed over time.</p>
<p>Nevertheless, the main Capital at Risk increase is driven by private and public credit in roughly the same proportion.</p>
<p>We can see a period where the Surplus Buffer is lower than the Capital at Risk. The difference is, in our view, not a source of concern as it can be solved by adjusting public credit investments and/or returning operating wallets excess budgets to the Surplus Buffer. Community should nevertheless prioritize the allocation that makes the most sense. The balance sheet allocation should be optimized to generate some capital so we can invest more and generate even more capital. If we don’t get to a point of being profitable, we will not generate capital and be stuck.</p>
<p></p><div><a href="//makerdao-forum-backup.s3.dualstack.us-east-1.amazonaws.com/original/3X/e/4/e4824f076647ce421c4175a06116210a224af3ab.png"><div>
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<p>Now that we have reviewed the solvency constraint, let’s move to the liquidity constraint.</p>
<h2>
<a name="asset-liability-mismatch-9" href="#asset-liability-mismatch-9"></a>Asset-liability mismatch</h2>
<p>The liquidity constraint is about being sure that the DAI holder will be able to redeem for a fiat-backed stablecoin at a PSM (see the <a href="https://forum.makerdao.com/t/alm-framework-for-makerdao/12994#maturity-risk-15">Maturity risk in the ALM Framework</a>). The expected redemptions of DAI are based on the <a href="https://forum.makerdao.com/t/modeling-dai-maturity/15961">DAI maturity profile <span>2</span></a>.</p>
<p>Maturity on the asset side is inferred from the underlying asset and the expected governance delay to take an action. For instance, crypto-backed loans are in the 1-month maturity bucket because governance would have to increase the stability fees (SF) or the collateral ratio (CR) to incentivize borrowers to unwind (which will take a bit of time as well).</p>
<p>In the chart below, the darker the gradient, the longer the maturity with assets on the top and liabilities (DAI and protocol equity) on the bottom. There is no mismatch.</p>
<p></p><div><a href="//makerdao-forum-backup.s3.dualstack.us-east-1.amazonaws.com/original/3X/d/f/df7a33a8b27da3cdbc50d39432e8a72be3261a82.png"><div>
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<p>If we zoom in at the beginning and the end of the timeline we can see (on the left) that we start with a lot of very short-term investments (stablecoins), and we migrate them slowly over time to longer maturity assets. The liquidity gap (in purple) stays always above the zero line (meaning no maturity mismatch), and keeps a healthy buffer.</p>
<p></p><div><a href="//makerdao-forum-backup.s3.dualstack.us-east-1.amazonaws.com/original/3X/2/f/2fbd309a1aa7f3317dbc2f950f9769a329e63aed.png"><div>
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<h1>
<a name="conclusion-10" href="#conclusion-10"></a>Conclusion</h1>
<p>As we have seen in the exposure chart, MakerDAO is moving toward a more diversified balance sheet allocation to reduce its exposure to stablecoin and generate more revenues.</p>
<p>While liquidity is not an expected concern, the current Surplus Buffer limits our ability to invest. One could consider the current pipeline of assets as light, but it is already big enough to put all our Surplus Buffer at work. If we exclude a capital raise, capital creation should be seen as the main current objective of MakerDAO. This is going back to profitability within the current Surplus Buffer constraint. Failure to do so will lead us to be stuck.</p>
<p>While capital allocation should be optimized, it is important to remember that we live in a volatile world. While public credit is currently the best way (yet still untested) to generate revenues, this could change going forward if DeFi rates are increasing. If we start to have to pay the risk-free rate to DAI holders, private credit will be required to generate a spread due to the illiquidity premium.</p>
<p>We might want to both optimize the short-term and build the foundation to be agile in the longer-term.</p>

MakerDAO ALM forecast 
  Summary 
 
 This paper models the balance sheet over the next 18-month

MakerDAO ALM forecast

<p>This post is way to probe the MakerDAO community on what will happen with Maker in the medium term. I assume the medium term as being MakerDAO more or less self-governed with a Foundation less present than currently. I also assume DeFi being way bigger than it is currently with maybe 100M users (1B?), with some only through CeFi (Square, Nexo, …). The overall market cap of all projects (excluding infrastructure) being around 100-1000 billions. BlockFi is a public company with 1000+ employees and 10B of asset under management (AUM), same for Nexo and Aave (the company not the protocol, cf <a href="https://en.cryptonomist.ch/2020/08/25/defi-aave-fca-license/">this announcement <span>3</span></a>).</p>
<p>In such world, I see 2 possibilities for MakerDAO.</p>
<p><strong>The protocol future</strong></p>
<p>The first one is focussing around the Maker Protocol and being the minter of DAI. MKR valuation is around DAI minted * natural rate of interest * price earning ratio of the day.  Evolutions are expected to be done by either the foundation, the rest of the ecosystem or through some DAI taken from the surplus buffer. Maker would be the lego brick to mint DAI.</p>
<p>It is more or less like today but with more collateral and some fat stability fees that burn MKR.</p>
<p>What changes is the environment. Currently, Nexo is the only institution using Maker. <a href="https://forum.makerdao.com/t/mip10c9-sp6-whitelist-yearn-finance-on-ethusd-oracle/3773">Yearn will come soon <span>4</span></a>. We can expect the trend to grow larger and larger. For instance, Yearn has <a href="https://etherscan.io/token/0xfC1E690f61EFd961294b3e1Ce3313fBD8aa4f85d#balances">70% of aDAI <span>1</span></a> in circulation (was more earlier). It’s more than the DAI liquidity on Aave ( ). Big businesses and other protocols will use Maker Protocol as an underlying.</p>
<p>Now what can happen when your main clients are big fishs and you are a protocol? My guess is that they take control. If the Maker Protocol is important to them, they will put 10 FTE to work on it. Obviously, they will prioritize their work according to their needs. They will also have more power in lobbying, credit and marketing than any other MKR community member. They also have the financial power to buy/borrow MKR shares as needed. Or fork the whole thing, if it’s too much pain to handle a community. You can look toward Mooniswap that already have a third of the liquidity of Uniswap with a steady adoption (and not even cutting fees, neither having a big marketing budget).</p>
<p>Now that feels a bit like <a href="https://en.wikipedia.org/wiki/Society_for_Worldwide_Interbank_Financial_Telecommunication">SWIFT</a> . It’s an awesome (for the time) protocol that runs the financial world. Now if we compare revenues and profit with Paypal or Stripe, it’s almost insignificant.</p>
<p>Another example that I can think of is the Bank of England (in 1800 era where it was having private shareholders and without support/supervision from the state). Bagehot explains how it was an underperforming bank because there was no incentive to perform. The bank directors didn’t care much of the performance it was more of an utility. The Bank of Scotland was more profitable for its shareholders (until the 2009 subprime crisis).</p>
<p>Last example is GitHub. I think GitHub earning are not the main driver for Microsoft. What matter is the PR, the marketing and cross-selling. Would you buy a GITHUB token?</p>
<p><strong>The business future</strong></p>
<p>The alternative is to play the business way and having resources.<br />
<a href="https://forum.makerdao.com/t/mip13c3-sp3-declaration-of-intent-strategic-reserves-fund-srf/3765/1">MIP13c3-SP3: Declaration of Intent - Strategic reserves fund (SRF)</a> is a step towards that (financial resoucres). Another great post by <a href="/u/mitote">@Mitote</a> earlier this year goes in that direction <a href="https://forum.makerdao.com/t/makerdao-needs-a-treasury-to-provide-compensation-to-its-workers-post-foundation-focus-on-workers-for-now/1091">MakerDao needs a Treasury to provide Compensation to its Workers post foundation (focus on workers for now) <span>1</span></a> (financial + HR resources, a lot of good insight here).</p>
<p>Another part is adding <a href="https://forum.makerdao.com/t/adding-real-world-assets-rwa-as-dai-collateral-is-a-critical-step-for-maker-to-stabilize-the-peg-and-in-doing-so-we-change-the-world/3653">RWA <span>8</span></a> which is like having a B2B baking relationship. It doesn’t come cheap on labor at scale.</p>
<p>Basically, if you want to compete against 1000+ employees you need to have the same size. Having a DAO governing at this scale would be a first, a challenge that the Maker community can probably accomplish.</p>
<p><strong>The way forward</strong></p>
<p>While I’m sure that the protocol way isn’t profitable for MKR holders (but I would love to see convincing arguments), there is most likely a continuum of futures between the protocol one and the business one. And getting there (whatever that <em>there</em> is) will demand some kind of path as well.</p>
<p>Therefore, I would love to know what is on your mind regarding this subject. What MakerDAO should look like in 5 years for you (using the context provided in preambule or providing your own) and how to get there if you have an idea. You can be creative obviously (  it’s uncharted territory!) or more inspired by existing DAO / theoretical frameworks.</p>
<p>It seems important to have a consensus on where we are going to get there right? .</p>
<p>Edit: Linking to <a href="https://forum.makerdao.com/t/long-term-vision-for-maker/3969">Long Term Vision for Maker <span>5</span></a> which is similar but more open. Feel free to contribute in any thread.</p>

[Discussion] MakerDAO in 5 years This post is way to probe the MakerDAO community on

[Discussion] MakerDAO in 5 years

<p>Some might say we are short term focused and <a href="https://forum.makerdao.com/t/opinion-2021-till-infinity-makerdao-community-owned-and-operated/5642">prone to micro-management <span>11</span></a>. A <a href="https://forum.makerdao.com/t/discussion-makerdao-in-5-years/3804">previous post explored <span>17</span></a> what MakerDAO can be in 5 years (without getting a clear view at the end). This post focus on the mission and objectives we can collectively decide for 2021.</p>
<p>Here, I define a <strong>mission</strong> as a short sentence that should be used as a red wire in almost all we do, how we should define MakerDAO in 1-3 years. The idea is to pick one in the end even if we can agree with many. Let’s define <strong>objective</strong> as a big chunk of work we want to be done around the end of 2021. We can have as many objectives as we think we can achieve. They should be open but still with a descriptive part.</p>
<p>This post is only for brainstorming, so we can propose anything, discuss anything and we will poll next year when the thing settle if there is enough traction. Maybe discussing the mission is more interesting, maybe starting with objectives makes more sense (quite sure there is a loop). I let you decide.</p>
<p>The following of the post will be updated with your addition/comments.</p>
<h2>Mission list</h2>
<h3>Maker the CryptoBank corporation</h3>
<p><strong>Be the biggest bank amongst DeFi and CeFi thanks to a first-class workforce and governance.</strong></p>
<p>Banks being defined as what a bank means in the future. Expanding the competitive landscape to CeFi (Square is next on the list, then HSBC and BoA). Put an emphasis on the importance of the workforce (paying our teams with the protocol money, being the best place to work) and the governance community.</p>
<h3>Maker Autonomous Protocol</h3>
<p><strong>Be the leader in stablecoin lending and provide a good return to MKR holders</strong></p>
<p>This is a narrower mission and it avoids pushing the scope too far and over-investing to remunerate the MKR token holders. One target is to have the least human interaction in the day to day activity. So most likely a small or no dedicated workforce and low governance overhead.</p>
<h3>Maker The Money Lego</h3>
<p><strong>Be the key building block in DeFi and change the world</strong></p>
<p>Support all the DeFi by having the best permissionless, trustless system. Be at the bottom <a href="https://newsletter.banklesshq.com/p/global-public-goods-and-the-protocol">on the Protocol Sink Thesis <span>12</span></a>. Put an emphasis on the protocol versus front-end for instance. Also, need a lot of interaction with other protocols to collectively create the best possible version of DeFi.</p>
<h3>Maker Making the World a better Place</h3>
<p><strong>Banking the Unbanked</strong></p>
<p>Put an emphasis on the retail market, marketing, and the front-end. Leverage the work done by the Foundation in Latam and elsewhere.</p>
<h2>Objectives list</h2>
<h3>Sustain a workforce</h3>
<p>Attract, nurture, and retain a sizable workforce. See <a href="https://forum.makerdao.com/t/discussion-makerdao-contributors-compensation-brainstorm/5625">[Discussion] MakerDAO Contributors compensation brainstorm <span>3</span></a>, <a href="https://forum.makerdao.com/t/discussion-request-daos-organigram/5674">[Discussion/Request] DAO's Organigram <span>3</span></a>, and probably other discussions. Target full autonomy from the Maker structure (i.e. all facilitators and domain paid by the protocol).</p>
<h3>Create EUR-DAI</h3>
<p>Expanding from the DAI success, we will launch a Euro (or another currency, just for illustration here). It will be an independent copy/paste of the current DAI credit system (but all based on MKR at the end).</p>
<h3>Depeg from USD</h3>
<p>In order to avoid regulation issues, a new version of DAI will be launched (on the side) not related to any currency (maybe something inflation-linked). In case of a regulatory issue, we would depreciate the $-based DAI.</p>
<h3>Launch Real World Assets</h3>
<p>Target $300M RWA loans for the end of 2021.</p>
<h3>Limit stablecoin exposure</h3>
<p>The stablecoin exposure is around $500M at the end of 2020. It should be significantly lower (&lt; $100M) at the end of 2021. The main solution is to add new collaterals but reducing SF or any other solution might be needed as well. <a href="https://forum.makerdao.com/t/mip30-farmable-cusdc-adapter-cropjoin/5163">cUSDC <span>1</span></a>-type vaults are considered as stablecoin exposure.</p>
<h3>Third-party protocol specific vaults</h3>
<p>Integrate with at least one third-party protocol like Yearn (like yETH, yYFI) or <a href="https://forum.makerdao.com/t/informal-poll-would-the-maker-community-want-to-onboard-a-new-collateral-e-g-wbtc-b-backed-by-b-protocol-that-has-lower-cr-with-the-same-sf/5652">B-Protocol <span>2</span></a> by providing them dedicated vault facilities. We can give them better risk parameters because we are confident that they will manage their position more carefully.</p>
<h3>Develop a solution to bank the unbanked with the Maker ecosystem</h3>
<p>Open to suggestions on this one by basically expanding <a href="https://forum.makerdao.com/t/fears-about-new-dust-limit-increase-pr-responsibility-for-new-small-account-users/5307/20">on this post <span>3</span></a>. Maybe having &gt; xM users in LATAM at the end of 2021?</p>
<h3>Use MakerDAO balance sheet to generate revenues other than stability fees</h3>
<p>Basically, <a href="https://forum.makerdao.com/t/mip32-peg-stability-module-compound-mixed-exposure/5684/1">MIP32: Peg Stability Module - Compound Mixed Exposure</a>. Can also link to <a href="https://forum.makerdao.com/t/balance-sheet-manipulation-how-to-yield-farm-safely-on-uniswap/5722">Balance sheet manipulation: How to yield farm safely on Uniswap <span>4</span></a> and <a href="https://forum.makerdao.com/t/mip31-active-reserve-via-amm/5639">MIP31: Active Reserve Via AMM <span>1</span></a>. Objective: generates more than $10M of revenues on an annual basis from such channels.</p>
<h3>Layer 2 solution (including other chains)</h3>
<p><a href="https://forum.makerdao.com/t/should-makerdao-dai-run-simultaneously-on-another-chain/3317">xDAI or something else <span>9</span></a>. Autonomous or just a L1-L2 bridge. More info on <a href="https://forum.makerdao.com/t/ethereum-l1-gas-issue-for-little-dai-holders-investors-es-en-pt/4547">Ethereum L1 Gas Issue for little Dai holders/investors (ES/EN/PT) <span>1</span></a></p>
<h3>Own and manage Maker assets</h3>
<p>More or less take ownership of <a href="http://makerdao.com">makerdao.com <span>3</span></a> and establish a MakerDAO brand on it. Currently, things are <a href="https://forum.makerdao.com/t/discussion-request-daos-organigram/5674/7">confusing <span>2</span></a>. That would also mean paying a team to manage that.</p>
<h3>Improve protocol functionalities</h3>
<p>We should keep up with the competency. There is a lot we can do in this regard, adding Flash Mint module, we could use it to improve our internal functionalities, permitting things like Collateral Swap for the Vaults (integrating properly with Uniswap),</p>
<h3>Special features for MKR holders</h3>
<p>i.e. special lending feature for them, permit to borrow from special reserves, anything which makes holding MKR something with greater benefits</p>
<h3>Governance by “political parties”</h3>
<p>Delegated voting to bridge the discussion between the governance forum and the MKR whales.</p>
<h3>Decentralize MakerDAO</h3>
<p>Having MKR_t token/DAO for each collateral and automate the DAI_t &lt;=&gt; DAI convertibility if some solvency rules on this MKR_t DAO are satisfied. <a href="https://forum.makerdao.com/t/brainstorm-2021-mission-and-objectives/5809/26">See more here</a>.</p>
<h3>Partners support</h3>
<p>The value of DAI depends on having a whole ecosystem using it. Foster “Internal Incubators”  encourage our world-class people to build things using our Credit System: what better way to harvest intelligence than to make your people use your product, love it and have “skin in the game” to improve it? (as old as Ford selling cars to his employees) Plus, with a truly global workforce, you could make Maker/DAI truly global.</p>
<h3>Make Maker/DAI explainable to 5 year olds</h3>
<p>With global communication, ideas spread fast. Simple ideas spread faster! If we want DAI in Latam, Africa and everywhere else, we should make it the most simple and powerful idea ever </p>
<h3>Implement mechanisms to keep us opened to new DEFI users</h3>
<p>This has become IMO a very important objective given what has been discussed in <a href="https://forum.makerdao.com/t/signal-request-increasing-dust-parameter/5963">Signal Request to Increase the Dust Minimum</a>.</p>
<p>We could start with simple proposals like <a href="https://forum.makerdao.com/t/informal-poll-creating-a-bite-rebate-contract-for-keepers-acting-on-small-vaults/5979">Creating a Bite-Rebate Contract for Keepers Acting on Small Vaults <span>1</span></a></p>

Trust model - Work In Progress

ALM framework for MakerDAO

MakerDAO ALM forecast

[Discussion] MakerDAO in 5 years

[Brainstorm] 2021 mission and objectives

A Balance Sheet approach to executing an Aggressive Growth Strategy - The road to 300M revenues

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