[TEMP CHECK] Freeze MAI from Aave

Summary

QiDao, owner of MAI Finance, is adopting QiDao Guardians, synonymous to Aave’s own Guardians. Per the Aave docs, the Guardians represent a 6/10 multisig and hold responsibilities allowing them to intervene during times of crisis in order to protect the protocol.

Both QiDao Guardians and Aave Guardians have similar roles:

  • Guarding the respective protocol against possible governance takeovers by having a veto power on any deemed malicious AIP.
  • Acting as failsafe emergency actors, if needed.

However, QiDao Guardians have additional duties:

  • Managing the minting and burning of MAI to regulate debt ceilings for collateral vaults.
  • Overseeing bridge diversification allocations for both MAI and QI.

Furthermore, they are expected to actively engage in multisig operations, staying alert, responsive, and prompt in action when necessary; and uphold the protocol’s best interest, promptly revealing any potential conflicts of interest.

Based on QIP197, although a Snapshot hasn’t been established yet, the following timeline is suggested:

  • Activation of the QiDao Guardians: May 31st, 2023
  • Addition of the Timelock to the multisig: June 15th, 2023

QiDao currently utilizes a 2/4 MultiSig on Optimism and Arbitrum, and a 3/5 MultiSig on Polygon. The proposed changes aim to address the existing situation where QiDao members alone could manipulate the supply and distribution of MAI. The new setup would require 4 of 6 members to pass emergency actions, including minting and burning MAI. The six delegates are composed of two QiDao team members and one QiDao community member:

  • Marc Zeller from Aave Chan Initiative
  • Hamzah Khan from Polygon Labs
  • Weso from Beefy Finance
  • 0xNacho from QiDao Community
  • Benjamin.lens from QiDao Protocol
  • Pablo the Penguin from QiDao Protocol

Market Risk Overview

From a market risk standpoint, Gauntlet has recommended the removal of MAI from the Stablecoins eMode category across all chains. An analysis of user positions reveals that few complex positions are collateralized by MAI (added to Optimism and Arbitrum ~2 weeks ago):

  • On Optimism, only $105 of MAI is supplied, and $27 is borrowed.
  • On Arbitrum, only $469 of MAI is supplied, and $345 is borrowed.
  • Roughly half of Polygon users merely supply miMATIC to generate interest, while the other half borrows various volatile assets.

Hence, it does not seem that MAI is being utilized by users in the same capacity or with the same diversity as other stablecoins, such as USDC or DAI.

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