MakerMan: MakerMan: I spent a long time before purchasing DAI and using the system to borrow before I entered these markets and hope others will do the same…

As you’ve said before Maker is EXTREMELY complicated. I am not sure if its actually possible to fully understand the entire system (risks), each part is constantly changing and all those changes interact with other parts, changing them. It is not reasonable to expect every user to understand those dynamics.

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Maker is actively marketing the product. From the disclaimers I have seen on multiple UIs 13% is generally presented as the liquidation penalty. Presentation of the system in this manner is significant.

I also agree with characterizations others have made describing the keeper situation as a “failure”. MKR holders ratified foundation devs work on auctions and the mechanism did not work as intended.

Failure is expected in such a experimental system, complete collapse has not taken place yet so this is still an excellent learning opportunity. The desire to learn and grow yields deeper understanding. Here’s my thoughts on recognizing users that were misled:

First point:

Marketing needs to match the reality of the system. Maker is a really expensive experiment that basically no one understands completely. No one knows exactly how the maker specific software infrastructure, governance ( and all its messy social/economic realities), ethereum, and the wider crypto/global market will interface with each other. The robustness of MCD is unknown, it has only been live for ~5 months, and it was not released completely finished. Things like the GSM were to risky to implement immediately and the dark fix mechanism needed to be conceived. Migration from SAI hasn’t even finished…

Many other governance tools still need to be developed (both social and technical). For example on black thursday LFW and I were going to give the first presentation on a formal collateral on boarding process. Almost half a year into MCD and no clear path for onboarding collateral had been substantiated. Sorry for rant . TLDR: This recognition does not compensate vault holders, but defines a responsibility for matching marketing (communications) to the presently understood reality of the system. This obligation aligns with “scientific governance” rather than business inspired marketing which aims to communicate simply and promote the system.

Second point: some sort of compensation:

Way trickier, its hard to judge how vaults “should” of been liquidated because its an auction, the market was going crazy, which would of influenced bidding regardless of how many keepers were participating. As Maker_Man stated at best 21% of the collateral would of been returned. Compensation should be less than 21% of loss collateral. Arbitrary, but how about returning 10% to vaults which lost more than 90% of their collateral? Calculated in terms of eth. I’m not knowledgeable enough on gathering eth data to do this, but I am pretty sure it would be possible to figure out.

Maker still isn’t in the clear, its an active situation, so in my mind the actual compensation for vault holders has to come in the future. The short term stability of the system is very much in question currently, adding a larger deficit right now might be dangerous. Also the dev team has little to no extra bandwidth.

Thanks everyone for their stories and rationales.