# Maker Atlas Immutable Alignment Artifact ## Preamble ``` MIP#: 101 Title: Maker Atlas Immutable Alignment Artifact Author(s): @rune Contributors: Tags: constitution, endgame, pregame Type: General Status: Accepted Date Proposed: 2023-01-31 Date Ratified: 2023-03-27 Dependencies: Replaces: Forum URL: https://forum.makerdao.com/t/mip101-the-maker-constitution/19621/ Ratification Poll URL: https://vote.makerdao.com/polling/Qmbndmkr#vote-breakdown ``` ## 0: Definitions ### Organizational Alignment Organizational alignment is a traditional business concept and can be described as the process of implementing strategies and philosophies to ensure that each member of an organization, from entry-level positions to executive managers, shares a common goal and vision for the success of an organization. ### Ecosystem Intelligence Ecosystem Intelligence is a way to look at a decentralized ecosystem as a single entity that acts with a greater or lesser amount of intelligence. Ecosystem Intelligence isn't just determined by the sum of the intelligence of each of its constituent parts, but also of the alignment of them. Counterintuitively, very intelligent, but spiritually misaligned participants in a decentralized ecosystem will actually lower its Ecosystem Intelligence. ### Aligned Structure An aligned structure is a network, ecosystem, entity, organization that actively employs alignment engineering. ### Universal Alignment Universal Alignment means an actor holistically understands their connection to their external context, and can extrapolate how their actions impact everything else, and the second order effects that reflect back on the actor, in the context of human morality and values and the natural world. Being universally aligned allows an actor to understand the intention of universally aligned rules, and discover discrepancies between the technical incentives of rules and their universal intention. Lacking universal alignment, or acting in a way that is against universal alignment, is being misaligned. Preventing misalignment is the fundamental objective of Alignment Engineering and Alignment Artifacts. ### Universal Alignment Assumption Universal Alignment is a spectrum, and actors are more or less Universally Aligned. In theory Universal Alignment is absolute, but in practice it cannot be measured deterministically and thus practically will always be subject to debate and changes over time. Alignment Engineering aims to minimize the degree that actors experience their own, and others, Universal Alignment changing over time. ### Alignment Artifact Strength The Strength of an Alignment Artifact determines the minimum level of universal alignment required for an actor to, upon interaction with the Alignment Artifact, take universally aligned actions. Alignment Artifact Strength occurs by making sure the Ecosystem Intelligence evolves such that each actor's self-interested incentives correspond as precisely as possible with requirements of Universal Alignment, so that misalignment can be overcome with minimal Inner Incentive. ### Inner Incentive Inner incentive is the second-order incentive that a universally aligned actor uses to counteract the first-order (or self-interested) incentives that are present pre-Alignment Engineering and/or caused by a misaligned structure. ### Alignment Engineering Alignment Engineering is a philosophy of organizational design introduced through this Alignment Artifact. It aims to anchor internally sustainable Ecosystem Intelligence within Alignment Artifacts that embody recursive trends towards increased Alignment Artifact Strength over time. ### Letter of the Rule vs Spirit of the Rule The distinction between the letter of the rule and the spirit of the rule refers to whether an individual interprets and follows a rule strictly based on its precise wording, or instead also considers its underlying intent or larger purpose. Based on the Universal Alignment Assumption the underlying intent of rules always aims to serve human values and promote public benefit within a given context. A "letter of the rule" interpretation adheres strictly to the rule's language, often exploiting ambiguities or loopholes to achieve a specific outcome. This approach allows the rule's exact wording, even if flawed or misaligned with its goals, to dictate the result, particularly if it benefits the interpreter. A "spirit of the rule" interpretation seeks to comprehend the rule's true purpose and how it contributes to universal alignment, while remaining bound by the letter of the rule. When faced with inconsistencies or errors in the rule's language, this approach appeals to a pre-established method for disabling, disregarding or substituting the rule as needed to prevent outcomes that contradict its intended objective and the greater purpose it serves. Example: Imagine a large corporation discovers a loophole in the environmental regulation of its jurisdiction that allows them to generate profits by using a specific type of pollutant that isn't regulated as a greenhouse gas, but when emitted is as harmful as regulated greenhouse gasses. By exploiting the "letter of the rule," the corporation complies with the regulations on paper but continues to harm the environment and public health in practice. A universally aligned actor in this situation, such as an environmentally conscious competitor, would interpret the regulations based on their "spirit" or underlying purpose — protecting the environment and public health. Recognizing that exploiting the loophole contradicts the regulations' intent, the universally aligned actor would voluntarily choose not to emit the harmful pollutant, even though doing so might be profitable and technically legal. A universally aligned actor would also actively work with the government and other stakeholders to close the loophole and strengthen the regulations to ensure that they effectively serve their intended purpose, and to protect themselves from misaligned competitors. ### Incentivized Alignment Incentivized Alignment is the outcome of an actor’s myopic and self-interested following of the letter of the rule with the first order incentives of an Aligned Structure, but is not likely to be inherently Universally Aligned and lacks Inner Incentive. ### Misalignment Misalignment is when it is possible to prove that an actor does not possess Universal Alignment or acts in a way that goes against Universal Alignment. ### Slippery Slope Misalignment Slippery Slope Misalignment is the shortest path to misalignment where tiny misaligned acts are justified through various means, which could include ignoring the potential significance and larger impact of acts due to their small scale, the trivial way the misalignment occurs, the good intentions of the actor, or that the ends justifies the means. Understanding Slippery Slope Misalignment means understanding that any misalignment at all is always very serious and if not dealt with results in increased risk of disequilibrium and alignment failure. In the context of a DAO this could mean a governance attack or financial collapse. ### Scope Scope is a particular focus area of Maker or a SubDAO. There are five scopes: - **Stability**, focusing on financial stability and the core Dai stablecoin product - **Accessibility**, focusing on frontends and distribution - **Protocol**, focusing on technical development, maintenance, and security - **Support**, focusing on ecosystem support, tools and activities - **Governance**, focusing on Alignment Artifact interpretation and balance of powers ### Alignment Artifact Alignment Artifacts are outputs of alignment engineering, and can be used by universally aligned actors to coordinate to achieve a positive sum outcome. ### Scope Bounded Mutable Alignment Artifact (Scope Artifact) The Scope Artifact is an Alignment Artifact that is designed to align the actions and incentives of participants within a specific scope defined by the Atlas. It provides a framework for decision-making, resource allocation, and governance within the defined scope. Each scope has its own unique set of challenges and objectives that require a tailored approach to alignment. The strength of a Scope Alignment Artifact depends on how well it aligns with Universal Alignment principles, as well as how effectively it is communicated and understood by participants within the defined scope. A strong Scope Artifact can help prevent misalignment and ensure that all participants are working towards a common goal for the benefit of the entire organization or ecosystem. Scope Artifact must not be changed beyond their Scope Boundaries defined by the Atlas, as this constitutes Slippery Slope Misalignment. ### Atlas Immutable Alignment Artifact (The Atlas) The Atlas is the foundational set of rules that underpins the Scope Artifacts. It is immutable from the moment the Maker Ecosystem enters the Endgame State. Its immutability mitigates the potential and actual damage caused by Slippery Slope Misalignment that could result in erosion of its potency in favorably impacting Alignment Engineering over time. ### Alignment Conserver Alignment Conservers are external entities that play a fundamental role in facilitating and protecting the Maker Governance process by ensuring it occurs according to the processes defined in the Atlas. As such, they enable MKR holders to participate in Maker Governance in a manner where it is easy for MKR holders to make the decisions that best benefit their long term interests as MKR holders, even if the MKR holders as a single group have relatively little alignment. ### Aligned Voter Committee (AVC) Voter Committees are groups of MKR holders that publicly coordinate to analyze the best voting behavior based on a particular strategy, and publicly coordinate political positioning with other Voter Committees and voting blocs to reach compromises and middle grounds that minimize bad decisions. The base form of Voter Committees are the Permissionless Voter Committees which is a very simple designation for any kind of organized voting group. AVCs are standardized Voter Committees made up of Alignment Conservers that hold MKR, and publicly coordinate to analyze the best voting behavior based on a particular strategy, and publicly coordinate political positioning with other Voter Committees and voting blocs to reach compromises and middle grounds that minimize bad decisions. They are subject to specific requirements enforced by the Governance Scope, and receive various benefits, resources and support from the Support Scope. AVCs are stewards of the spirit of the rules, and prioritize responding proactively to any evidence or allegation that letter of rules are being introduced or used in ways misaligned with the spirit. Bullet point highlights: AVCs are groups of MKR holders that: - Publicly coordinate for best voting behavior - Analyze strategies - Develop Unique, Universally Aligned Strategic Perspective - Coordinate political positioning - Work with other AVCs and voting blocs - Aim for compromises and middle grounds - Minimize bad decisions - Are subject to Governance Scope requirements - Receive benefits, resources, and support from the Support Scope - Ensure day-to-day rules align with the spirit of rules ### Aligned Governance Strategy The Aligned Governance Strategy is a document that describes the instructions from the AVCs for how ADs should vote with their Governance Strategy Link for the AVC. Aligned Governance Strategies must be Universally Aligned, and both AVCs and ADs are responsible and can be penalized in case of their involvement with a misaligned Aligned Governance Strategy. ### Scope Advisory Councils Scope Advisory Councils are groups of Ecosystem Actors approved by Maker Governance to perform Scope Artifact Advisory Projects that aim to produce objective, fact-, data- and expertise driven upgrades to the Scope Artifacts they specialize in. Their Advisory output is used as the starting point for Aligned Scope Proposals. ### Aligned Scope Proposal The Aligned Scope Proposals are documents that describe the desired updated state of each of the Scope Alignment Artifacts from the perspective of the AVC that makes them. The Aligned Scope Proposals may be created based on a starting point developed by Scope Advisory Councils, where the AVCs then take steps to ensure it is Universally Aligned, and apply their unique strategic perspective, to for instance make it more or less *dovish* or *hawkish*. ### Aligned Delegate (AD) Aligned Delegates are Anonymous Alignment Conservers that use the Protocol Delegation System to enable regular MKR holders to easily and safely delegate their MKR voting power towards implementing the Aligned Governance Strategy of an AVC, while earning Governance Participation Rewards in the process. Because they directly control large amounts of incentivized MKR voting power, ADs are the most powerful and potentially dangerous type of Alignment Conserver and the primary way the Alignment Artifacts need to work is by providing tools for ADs and all other actors in the ecosystem to keep ADs in check and acting Universally Aligned. The most important task of ADs is to use their power to protect the spirit of the Atlas and maintain Universal Alignment of the Maker Ecosystem. ADs are subject to strict requirements enforced by the Governance Scope, and receive various benefits, resources and support from the Support Scope. ### Governance Strategy Link (GSL) A Governance Strategy Link is a vote delegation module controlled by an AD. Each GSL is paired with a specific AVC, and the AD is required to faithfully follow the spirit of the AVCs Strategic Perspective when voting, while safeguarding against misalignment by the AVC. ### Facilitator Facilitators are anonymous Alignment Conservers that can be engaged by FacilitatorDAOs to directly access governance processes and smart contracts that the FacilitatorDAOs control, to help ensure the FacilitatorDAOs fulfill their responsibility under the Alignment Artifacts. ### SubDAO SubDAOs are semi-independent DAOs that are linked to Maker Governance and whose core design enables a derisked, second layer of the ecosystem to foster fast-moving, risk-adjusted innovation, growth and experimentation. SubDAOs also enable delegation of responsibility and risk within specific, highly complex areas. In general, complexity, responsibility, decision-making authority and risk is off-loaded from Maker Core and pushed to the SubDAOs, except if the Maker Core Alignment Artifact specifies otherwise. ### FacilitatorDAO FacilitatorDAOs are the administrative SubDAOs that are tasked with organizing the internal mechanisms of MakerDAO, AllocatorDAOs and MiniDAOs, based on the processes specified in their Scope Frameworks. They ensure that all internal processes have a collateralized actor responsible, who is providing insurance for the task and processes running as it is specified, and they also ensure that neither MakerDAO or the SubDAOs need to have a notion of an “internal team” or similar that could be a centralization risk. ### AllocatorDAO AllocatorDAOs are the most prominent SubDAOs. They can generate Dai Directly from MakerDAO and allocate it to the most valuable opportunities in the DeFi ecosystem from the Allocator Vaults. They also operate decentralized frontends that act as the entry point to the Maker Ecosystem. They can also incubate and create MiniDAOs. ### MiniDAO MiniDAOs are created by AllocatorDAOs through a simple Governance decision. MiniDAOs enable AllocatorDAOs to innovate many new products and ideas they can then diversify and decentralize by spinning them off as MiniDAOs. MiniDAOs can be very diverse and in some cases very short lived as they try out a new idea that may or may not hit product market fit. Because of their extremely low barrier to entry and ease of creation they can be highly experimental and creative, allowing some of them to hit surprising home runs. ### Aligned Voter Committee (AVC) Subcommittee Meeting The AVC Subcommittee Meetings are events where AVC Members gather, together with other key stakeholders such as ADs, Facilitators, and Advisory Council Members, and other stakeholders like MKR holders and Ecosystem Actors invited by the AVC. The Subcommittee Meetings always cover one of the 5 Scopes in a weekly rotation, covering each Scope twice every quarter. The AVC Subcommittee Meetings are used to discover the pathway for the AVC to align on an Aligned Scope Proposal for each Scope for the quarter. ### Communication Channel Communication Channels are a critical consideration of the Maker Alignment Artifacts as they have a significant impact on incentivized alignment. ### Governance Scope (GOV) The Governance Scope Alignment Artifact codifies rules that regulate the critical balance of power processes defined in the Maker Atlas, and adjudicate on appeals processes related to misalignment in the ecosystem. ### Support Scope (SUP) The Support Scope Alignment Artifact codifies rules that regulate various tasks of ecosystem support, including governance process infrastructure and management, SubDAO ecosystem support, Public Good Purpose System. ### Protocol Scope (PRO) The Protocol Scope Alignment Artifact codifies rules related to the core technical MakerDAO protocol, the NewChain, and the Two-Stage Gravity Bridge. ### Stability Scope (STA) The Stability Scope Bounded Mutable Alignment Artifact codifies the rules related to managing the core stablecoin product, Dai, and supporting factors related to financial stability, such as surplus buffer and decentralized asset reserve. ### Accessibility Scope (ACC) The Accessibility Scope Bounded Mutable Alignment Artifact codifies rules related to accessibility and distribution efforts, and regulates user-facing frontends of MakerDAO Core and SubDAOs. ### SubDAO Scope Bounded Mutable Alignment Artifacts SubDAO Scope Bounded Mutable Alignment Artifacts are internal Scope Alignment Artifacts for SubDAOs. All SubDAOs begin with a standard genesis Scope Artifact that they can modify. They can also create additional Scope Artifacts with new Scopes. Unlike MakerDAO, SubDAO Scope Artifacts have much fewer restrictions on how they can be modified and what strategic opportunities they can cover. ### Governance Equilibrium A Governance Equilibrium is a state in a Decentralized Governance dynamic where the governance process is able to remain decentralized over time with a very high degree of confidence. It requires redundant feedback loops that can counteract the natural incentives that push the governance process towards disequilibrium and centralization. ### Endgame State The final technical and Alignment Engineering state of MakerDAO where all aspects of the Ecosystem that can be made immutable, have been made immutable. It is triggered with the deployment of NewChain. The aim of the Endgame State is to create a highly resilient Governance Equilibrium. ### Easy Governance Frontend The EGF is a standardized decentralized frontend for participating in MakerDAO governance that all SubDAOs must make available for MKR holders to access. It is the standard way to access the Governance Participation Incentives defined in the Maker Atlas. ### Governance Participation Incentives The Governance Participation Incentives are a set of rewards available to users who participate in Maker Governance and Lockstake their MKR into the Lockstake Engine. The Governance Participation rewards include choosing either Dai and SubDAO token farming. For the Maker Lockstake Engine, it also includes the ability to generate Dai. ### Lockstaking Lockstaking is a form of governance participation used by the governance tokens in the Maker Ecosystem. When a user Lockstakes, they immediately begin to earn significant rewards, but must pay an exit fee to access their governance tokens again. This makes it a lot more beneficial to lockstake if the user expects to remain in the system for a long term. Because there's a penalty for exiting, Lockstaking helps generate additional skin in the game and makes incentivized alignment more long-term aligned. ### Farming Farming means using a token to receive a different token. Often, the token received is a volatile token, such as a governance token. ### Neural Tokenomics An advanced tokenomics system that involves feedback loops, value distribution and value recapture with the aim of improving Ecosystem Intelligence. ### Explicit Incentives The first order incentives that are coded into rules in Alignment Artifacts. ### Implicit Incentives The incentives that an actor can estimate through the letter of the rules interpretation of an Alignment Artifact and the probability of enforcement. ### Incentive Slack Incentive Slack means that there's a gap between the explicit incentives and the implicit incentives in an Aligned Structure. Incentive Slack can occur if coded rules aren’t enforced, or if they are made to be overly restrictive or unworkable, and thus necessarily setting precedence of bypassing the rules. High Incentive Slack creates a perception that rules are likely to be ignored generally, without regards for the spirit of the rules. Incentive Slack means significant risk of widespread misalignment because it cannot occur if the aligned structure contains universally aligned actors enforcing the rules. ### Whole Weeks The Alignment Artifacts defines quarterly and yearly cycles that determine fixed points in time by counting whole weeks from the beginning of a quarter. The first whole week of a quarter is defined as the first week that contains all of its days, starting with Monday, inside the quarter. Another definition would be “the week starting with the first Monday of the quarter”. ### Strategic Perspective The Strategic Perspective of an AVC is its internal bias around what modifications and improvements are most needed for Maker. It can also be referred to as the bias. Every AVC must have a Strategic Perspective, because it is impossible to define a truly objective Universally Aligned interpretation of the Atlas. All AVCs and all other actors must collaborate to find something that is as close as possible to true Universal Alignment, each using their Strategic Perspective to pull in the direction they think is most strategically sound. ### Major and Minor SubDAOs FacilitatorDAOs and AllocatorDAOs are Major SubDAOs because they are incubated directly by MakerDAO, while MiniDAOs are Minor SubDAOs because they are incubated by AllocatorDAOs (another SubDAO). ## 1: The Atlas This MIP specifies the legacy Atlas. The legacy Atlas will soon be upgraded to Atlas v2, which is a version of the Atlas that no longer relies on the legacy MIP system, and consists of a single file that contain all Atlas Documents as a nested tree. Before the upgrade to Atlas v2, there may be inconsistencies in the Atlas, and between Atlas and the Scopes. In case of conflicts between the Atlas and the Scopes, the Scopes takes precedence as they are generally more up to date. Facilitators must be careful in using their judgement and common sense to ensure that all interpretations and use of their powers is in accordance with the goals of Endgame Launch: To ensure maximum growth and smooth operations and minimize governance red tape while the first Endgame Products are released, while ensuring actual, pragmatic security of the system is not jeopardized. Document identifiers do not have to be in order or be sequential. ### 1.1: Atlas v2 Upgrade Process When Atlas v2 is ready to function as a drop-in replacement for all MIP and Atlas functions, in preparation for Endgame Launch, the upgrade to Atlas v2 can be triggered through the weekly governance cycle using a regular governance poll. The Atlas v2 upgrade can be triggered by a Facilitator or the Maker Forum account Le_Bateleur representing the Atlas Core Development Ecosystem Actor Atlas Axis. When the Atlas v2 upgrade happens, all MIPs and legacy Atlas MIPs are deleted and their functionality fully replaced by Atlas v2. ## 2: The Governance Scope - GOV The Governance Scope covers rules that regulate the critical balance of power, and adjudicate on appeals processes related to misalignment in the ecosystem. ### 2.1: Scope Improvement - GOV1 The Governance Scope must have a specialized Advisory Council that is able to propose improvements to the language of the Mutable Alignment Artifact that increase Alignment Artifact Strength and increase efficiency and security of the Maker Ecosystem. #### 2.1.1 The Governance Scope must have a customized strategy towards its display and interaction through the DAO Toolkit. ### 2.2: Atlas Immutable Alignment Artifact - GOV2 The information contained in the Atlas is the most important for determining the rules and incentives of the Maker Ecosystem, and supersedes and overrides all other competing rules or decisions. The Atlas is interpreted and used as the source of truth for determining what is Universally Aligned and what is misaligned. However, in practice it is not possible to always interpret all aspects of the Atlas directly, as the Maker Ecosystem may encounter situations that the Atlas didn’t predict. In such scenarios, it is crucial that the Atlas is interpreted in a way that is maximally Universally Aligned and prevents misalignment or slippery slope risks. GOV2 contains the structure for Maker Governance to scrutinize and disambiguate the elements and other contents of the Atlas Immutable Alignment Artifact and define the effects and consequences in practical situations. #### 2.2.1 The principles for when Atlas interpretation is necessary, and how it is initiated. ##### 2.2.1.1 This must cover the delineation between when Atlas interpretation can be used to cover shortfalls or gaps in the Atlas that are congruent with the spirit of the Atlas, and when interpretations are reaching too far and are going against the spirit of the Atlas and as a result, are misaligned. #### 2.2.2 Principles and processes that must be followed when deliberating and deciding on Atlas interpretations. #### 2.2.3 List of all settled Atlas interpretations with all necessary context. ### 2.3: Scope Bounded Mutable Alignment Artifacts - GOV3 Scope Mutable Alignment Artifacts (Scope Artifacts) are important tools in enabling Maker Governance to evolve over time while staying aligned with, and protected by, the Atlas. They specify in maximal practical and required detail how Maker Governance operates, within the constraints and boundaries set by the Atlas. #### 2.3.1 Scope Artifacts are continuously updated. Their updates must always be aligned with the specifications of the Atlas. #### 2.3.2 GOV3 must cover a ruleset for ossification of mutable elements, ensuring that significant changes to the Scopes take a long time and provide a lot of time for input. #### 2.3.3: Types of Scope Elements ##### 2.3.3.1: Strengthening Elements Strengthening Elements are regular elements that ossify over time and are meant to eventually never change as they reach a sufficient strength that the Letter of the Rules remain Universally Aligned. Every update to a Strengthening Element must make it stronger, more future proof and long term focused, and less likely to be changed in the future. ##### 2.3.3.2: Active Elements Active Elements are mutable elements that need to change as a part of the normal operations of Governance. An example are lists of active state or parameters. The rules for changing an Active Element are codified in adjacent Strengthening Elements. ##### 2.3.3.3: Budget Elements Budget Elements are elements that contain budgets and that can trigger valid executive votes for deploying smart contracts that can perform payments controlled by FacilitatorDAOs. ##### 2.3.3.4: Template Elements Template Elements are elements that specify templates used for other elements. Template Elements don’t have to follow the regular Alignment Artifact formatting standards for its subelements. #### 2.3.4 The Article must contain a process for ecosystem participants to petition for an appeal where they believe a Scope is misaligned, and the process for the Governance Scope to accept and process appeals, including fees and conditions. #### 2.3.5 The Article must contain processes for how the outcome of appeals are recorded in Scope Artifacts #### 2.3.6 The Article must cover specific rules related to Ecosystem Agreement appeals. ### 2.4: Alignment Conservers - GOV4 Alignment Conservers are external entities that play a fundamental role in facilitating and protecting the Maker Governance process by ensuring it occurs according to the processes defined in the Maker Core Alignment Artifact and with Universal Alignment. They enable MKR holders to have Universally Aligned participation in Maker Governance with minimal Inner Incentive, by ensuring it is very easy for MKR holders to make aligned decisions, and that there are strong protections against misalignment. #### 2.4.1: Roles of the Alignment Conservers Alignment Conservers can have two critical roles: - Aligned Delegate - Facilitator ##### 2.4.1.1 Alignment Conservers may only be operationally active in a single Alignment Conserver role. They may not simultaneously assume multiple Alignment Conserver roles, or other ecosystem roles such as Ecosystem Actors. ##### 2.4.1.2 When assuming the special roles available to Alignment Conservers, they also become subject to additional requirements specific to their role. These role-specific requirements are described in the relevant Atlas Articles and in the Governance Scope Artifact. Breaking these requirements also means breaking the Alignment Conserver requirements. #### 2.4.2: Alignment Conservers Eligibility Requirements Alignment Conservers must always act to preserve the spirit of the Atlas Immutable Alignment Artifact and to fight against, and make public, all forms of corruption, organizational drift and other misalignment threats that they discover from their embedded position near the inner workings of MakerDAO. They must be held to a high standard in terms of acting with Universal Alignment. #### 2.4.3 Alignment Conservers may never collude or secretly organize to change the Alignment Artifacts or the governance dynamic of MakerDAO in general, except within the clearly delineated processes and frameworks of the Maker Core Alignment Artifact. #### 2.4.4 If an Alignment Conserver is discovered to act against the requirements outlined in *2.4.2* and its subelements their Alignment Conserver status must immediately be derecognized by the FacilitatorDAOs. GOV4 must specify the processes for derecognition so that they are fair and minimize risk for the Maker Ecosystem. ##### 2.4.4.1 In cases of mild “slippery slope” breaches, a warning may be given and recorded in the Governance Artifact with no further consequence for the first breach. ##### 2.4.4.2 In severe cases that can be described as Governance Attacks, in addition to being derecognized, the Alignment Conserver is also stripped of all reputation recognized in reputation systems of the Scopes. #### 2.4.5: Alignment Conserver Anonymity and Privacy Alignment Conservers are encouraged to be anonymous. Some Alignment Conserver roles are required to be anonymous, and their identities must be derecognized from acting as Alignment Conservers in general, in case their privacy is breached. ### 2.6: Aligned Delegates (ADs) - GOV6 ADs are Alignment Conservers that have registered based on the processes specified in the Governance Scope Artifact. ADs receive various benefits while being subject to specific requirements in addition to the general Alignment Conserver requirements. ADs have significant physical power over the Maker Protocol as they control votes obtained from delegation of voting power. As a result their focus is to protect the Maker Ecosystem against abuse of this power by themselves or others, and to use the power to protect the Maker Ecosystem in case other parts of the Governance Process take misaligned actions. #### 2.6.1: Protocol Delegation Modules (PDMs) Protocol Delegation Modules are NewChain Modules that can be created and controlled by external smart contracts or accounts, and can receive delegated voting power from MKR holders and Lockstake Engine users. ##### 2.6.1.1 PDMs function with a season system begins on the monday of the 11th full week of the first quarter of the year, and ends on the friday of the 12th full week of the first quarter of the following year. The period where seasons overlap, from the monday of the 11th full week of the first quarter to the friday of the 12th full week of the first quarter in the same year, is called the Election Season. ##### 2.6.1.2 PDMs are Seasonally Active from the moment they are created, until the Season they were created in ends. If they are created during the Election Season, then they count as being created in the later overlapping Season. PDMs expire and lose their voting power at the end of the second season of their existence, with a total lifetime of up to approximately 2 years and 2 weeks. ##### 2.6.1.3 Delegating to Seasonally Active PDMs will qualify Lockstake Engine users for Governance Participation Rewards throughout the entire Season, until the monday of the 12th full week of the first quarter of the year for PDMs of the earlier overlapping season. #### 2.6.3: Aligned Delegate Budget and Participation Requirements ADs are eligible to receive budget from the Maker Protocol if they are among the top ADs based on total votes delegated to their PDM, and they fulfill specific participation requirements. Delegates receiving a budget are called Prime Delegates (PDs). ##### 2.6.3.1 The Atlas Immutable Artifact specifies the number of PD slots. ###### 2.6.3.1.1 The top 6 ADs by number of delegated votes are the PDs. ##### 2.6.3.2: AD Buffer The AD Buffer is an account of NST that builds up when an AD achieves PD status. The budget that an AD is responsible for accumulates in the AD buffer. It cannot be spent until it contains at least 1 month’s worth of budget. At that point, the AD budget starts paying out the to account that controls the AD-PDM. ADs can use this budget for personal compensation, compensation to team contributors, research expenses, and more. ###### 2.6.3.2.1 If an AD loses all its budget stream, or loses a part of its budget stream by moving from PD to RD, the AD Buffer starts paying out the excess funds it contains so that it reaches 1 month’s equivalent budget. If an AD loses all its budget stream, this means that all of the contents of the AD Buffer can be spent. ###### 2.6.3.2.2 The AD Buffer is also used as collateral for a whistleblower bounty, which is capped at one half of one month of an AD’s budget, in case the AD acts misaligned or has their privacy compromised. ##### 2.6.3.3 The budget that a PD is responsible for can be reduced if the PD doesn’t fully comply with participation requirements. ##### 2.6.3.4 Actual AD budget stream amounts are modified by voting activity metrics for the last 12 months, which includes overall voting activity in all of the votes that the ADs are able to vote on. If an AD is active in less than 95% of all votes over the last 6 months, they receive a reduced amount of AD budget. The reduction in budget is proportionally linear until it reaches 0 AD budget at 75% voting activity. If an AD falls below 75% voting activity over the last 6 months, it loses qualification for AD income and any AD budget rank they may be eligible for is passed on to the next highest AD by total amount of MKR delegated to their Seasonally Active PDM. A PD can lose their PD status this way, and even if their activity metric recovers they do not automatically become a PD again, except through the regular process of becoming a PD outside of the Election Season. ##### 2.6.3.5 Actual AD budget stream amounts are modified by AD communication metrics for the last 12 months, which requires the ADs to write an explanation for each vote. If the AD actively communicates on less than 95% of all votes over the last 6 months, they receive a reduced amount of AD budget. The reduction in budget is proportionally linear until it reaches 0 AD budget at 75% communication activity over the last 6 months. If an AD falls below 75% communication activity over the last 6 months, it loses qualification for AD budget and any AD budget rank they may be eligible for is passed on to the next highest AD by total amount of MKR delegated to their Seasonally Active PDM. A PD can lose their PD status this way, and even if their activity metric recovers they do not automatically become a PD again, except through the regular process of becoming a PD outside of the Election Season. ##### 2.6.3.6 The PD slots each have a continually accruing budget equating to 48,000 NST per year. ##### 2.6.3.7 As an exception to the general requirements of Alignment Conservers, ADs are allowed to work on work related to Atlas improvement, drafting, data collection, in addition to their roles as PDs and ADs. #### 2.6.5: Aligned Delegate Alignment Risk Mitigation Delegates are not allowed to provide “kickbacks” from their compensation to MKR holders that delegate to them. Any violation of these requirements constitutes breaching the Alignment Conserver requirements. ##### 2.6.5.1 If a FacilitatorDAO finds that an AD has performed a misaligned act or breached their requirements, they can derecognize the AD and confiscate their AD Buffer. The AD Buffer can be used as a whistleblower bounty in case an ecosystem actor provided useful data, information or evidence that led to the derecognition of the AD. GOV6 must specify sufficient safety mechanisms around the payment of the whistleblower bounty. ###### 2.6.5.1.1 All FacilitatorDAOs must immediately review the evidence and either support the decision to derecognize the AD, or propose a vote to overturn the derecognition and penalize the FacilitatorDAO. ###### 2.6.5.1.2 If FacilitatorDAOs fail to take action against misaligned ADs, they must be severely penalized. #### 2.6.6: Aligned Delegate Operational Security ADs must maintain a high level of operational security, and follow best practice for privacy, security and physical resilience. This must be done at a level that adequately protects the Maker Ecosystem from physical risk posed by the potential for attacks against ADs. If there’s clear evidence or significant suspicion that the operational security of an AD has been compromised, or that they have failed to follow best practice or otherwise made operational security errors, FacilitatorDAOs must immediately derecognize the AD. As specified in 2.6.3.4.3 part of the AD Buffer can be confiscated and used as a whistleblower bounty in case an ecosystem actor responsibly provided useful information for determining that the operational security of an AD was compromised. GOV6 must specify sufficient safety mechanisms around the payment of the whistleblower bounty. To support the security of the protocol, PDs and RDs must use the PagerDuty emergency tool to deal with spell related emergencies. The operational security requirements of ADs must conform to enable high opsec, best practice use of PagerDuty by ADs. ##### 2.6.6.1 FacilitatorDAOs must err on the side of caution and act in case there is any kind of real possibility that the operational security of an AD is compromised. They are afforded a significant autonomy in making judgement calls related to operational security standards for ADs, but if there is clear indications that they are abusing this power for misaligned ends, then the FacilitatorDAO must be penalized for open misalignment. ###### 2.6.6.1.1 All FacilitatorDAOs must immediately either support the action or propose overturning it and penalizing the FacilitatorDAO when an operational security breach derecognition is initiated. Failing to act is itself misalignment and results in penalties for all the FacilitatorDAOs that failed to act. ### 2.7: FacilitatorDAOs and Facilitators FacilitatorDAOs are a type of SubDAO that can be given responsibility over MakerDAO Scopes and SubDAO Scopes in return for tokenomics rewards. #### 2.7.1 When a FacilitatorDAO has responsibility for an Alignment Artifact, they are fully required to follow all instructions and rules of the Alignment Artifact elements. If they fail to follow the instructions and rules correctly, they can be penalized by the Governance Scope. The penalties and process for penalizing must be specified in the Article 7 of the Governance Scope. #### 2.7.2: Assigning Responsibility of MakerDAO Alignment Artifacts to FacilitatorDAOs The Governance Scope must specify a process used by Maker Governance to assign responsibility of a particular MakerDAO Alignment Artifact to a particular FacilitatorDAO. A process must be in place to enable FacilitatorDAOs to request responsibility of a MakerDAO Alignment Artifact, and in ordinary times Maker Governance should only assign responsibility of a Scope based on a request by the FacilitatorDAO. ##### 2.7.2.1 All FacilitatorDAOs always have responsibility for the Governance Scope. ##### 2.7.2.2 There must always be a FacilitatorDAO assigned to all Scopes, and if necessary due to extraordinary circumstances, Maker Governance must directly assign responsibility of a Scope to a FacilitatorDAO. GOV7 must ensure a process for detecting and acting on such situations to minimize risk. ##### 2.7.2.3 If a FacilitatorDAO has responsibility for the Support Scope or the Stability Scope, they are considered Core Facilitators and cannot be assigned responsibility to SubDAO scopes. #### 2.7.3: Assigning Responsibility of SubDAO Scopes to FacilitatorDAOs GOV7 must specify the process with which AllocatorDAOs and MiniDAOs can assign Responsibility of their Scopes to FacilitatorDAOs. Being assigned responsibility of a SubDAO Scope requires the FacilitatorDAO to agree to take on the full responsibility of the Scope. ##### 2.7.3.1 Once a FacilitatorDAO has agreed to take responsibility, they cannot exit their responsibility with less than 3 months notice, unless justified by an event of misalignment or clear breach of good faith occurs. ##### 2.7.3.2 If a FacilitatorDAO does not have responsibility for the Support Scope or the Stability Scope, they are considered SubDAO Facilitators and can be assigned responsibility to SubDAO Scopes. #### 2.7.4: FacilitatorDAO Responsibility Rewards FacilitatorDAOs benefit from a special tokenomics system called FacilitatorDAO Responsibility Rewards, which rewards them based on the amount of Responsibility they have over Scopes. A total of 300 million NewGovToken are distributed to all FacilitatorDAOs per year. ##### 2.7.4.1: MakerDAO Scope FacilitatorDAO Responsibility Rewards 120 million goes to responsibility for MakerDAO Scopes ###### 2.7.4.1.1 40 million is distributed proportionally to Scope Weight. Scope Weight is as follows: | Scope | Scope Weight | |---|---:| | Support Scope | 3 | | Protocol Scope | 1 | | Stability Scope | 3 | | Accessibility Scope | 1 | When multiple FacilitatorDAOs are responsible for the same Scope their Scope Weight is divided between them. ###### 2.7.4.1.2 40 million NewGovToken is distributed according to Budget Weight Budget Weight is calculated by determining the relative amount of budget each FacilitatorDAO controls, including both fixed budgets and Allocated Budgets. When multiple FacilitatorDAOs are responsible for the same Scope, the fixed budgets of the Scope are divided between them. ###### 2.7.4.1.2.1: Adjusted Budget Weight In some cases Budgets will have specified an adjusted weight inside the Budget Element. This is in case the budget is not meant to be spent on a regular basis and as a result the actual number is higher than what would be used on average. The Adjusted weight must still account for the work involved in preparing for the contingency situation where the budget would need to be spent. ###### 2.7.4.1.3: Minimum Threshold 40 million NewGovToken is distributed proportionally to all Core FacilitatorDAOs. ##### 2.7.4.2: SubDAO Scope FacilitatorDAO Responsibility Rewards 180 million NewGovToken is provided as reward for Responsibility of SubDAO Scopes, divided accordingly: ###### 2.7.4.2.1 80 million NewGovenToken distributed according to AllocatorDAO Weight, which is determined by the proportional amount of Maker Elixir that the AllocatorDAO holds, compared to the total amount of Maker Elixir held by all AllocatorDAOs. ###### 2.7.4.2.2 60 million NewGovToken distributed according to MiniDAO Weight, which is determined by the proportional amount of Allocator Elixir the MiniDAO holds times the proportional amount of Maker Elixir its parent AllocatorDAO holds. ###### 2.7.4.2.3 40 million NewGovenToken proportionally for any FacilitatorDAO that is actively Responsible for at least 1 AllocatorDAO Scope, or at least a fraction of total MiniDAO Weight equivalent to one divided by the total amount of SubDAO FacilitatorDAOs. #### 2.7.5: Facilitators Facilitators are anonymous Alignment Conservers that can be engaged by FacilitatorDAOs to directly access governance processes and smart contracts that the FacilitatorDAOs control, to help ensure the FacilitatorDAO fulfills their responsibility under the Alignment Artifacts. ##### 2.7.5.0 Facilitators allow a FacilitatorDAO to scale up its ability to be responsible for multiple Alignment Artifacts, but also create the risk of misaligned Facilitators attacking the system or stealing funds. ##### 2.7.5.1 The FacilitatorDAOs are responsible for any wrongdoing by their chosen Facilitators, and will be penalized for any theft or abuse of budgets or protocol access. The FacilitatorDAOs have to manage this risk through carefully set, limited permissions and fallback mechanisms that ensure the FacilitatorDAOs cannot take a significant loss in the worst case scenario. ##### 2.7.5.2 Facilitator Operational Security Facilitators must maintain a high level of operational security, and follow best practice for privacy, security and physical resilience. This must be done at a level that adequately protects the Maker Ecosystem from physical risk posed by the potential for attacks against Facilitators. If there’s clear evidence or significant suspicion that the operational security of a Facilitator has been compromised, or that they have failed to follow best practice or otherwise made operational security errors, FacilitatorDAOs must immediately derecognize the Facilitator. The FacilitatorDAO that chose a Facilitator that is found to have inadequate operational security must be penalized unless they act immediately to derecognize the Facilitator. ###### 2.7.5.2.1 FacilitatorDAOs must err on the side of caution and act in case there is any kind of real possibility that the operational security of an Facilitator is compromised. They are afforded a significant autonomy in making judgement calls related to operational security standards for Facilitators, but if there is clear indications that they are abusing this power for misaligned ends, then the FacilitatorDAO must be penalized for open misalignment. ###### 2.7.5.2.1.1 All FacilitatorDAOs must immediately either support the action or propose overturning it and penalizing the FacilitatorDAO when an operational security breach derecognition is initiated. Failing to act is itself misalignment and results in penalties for all the FacilitatorDAOs that failed to act. #### 2.7.6: Decision-Making powers of FacilitatorDAOs FacilitatorDAOs can make interpretations and take discretionary decisions based on the language of the Alignment Artifacts. *2.2* and *2.3* of The Atlas and GOV2 and GOV3 place significant checks and restrictions on how FacilitatorDAOs can do this. FacilitatorDAOs are not meant to be experts on how to run ordinary business operations, but instead must follow the instructions and make judgment calls based on the language contained in the Scopes. ##### 2.7.6.1 All FacilitatorDAO decisions related to ordinary operations must be clearly explained and justified based on public information. FacilitatorDAOs must not claim to make decisions based on some internal knowledge or undisclosed data. ###### 2.7.6.1.0 Generally, FacilitatorDAOs are supposed to minimally "think for themselves" and instead just faithfully follow the instructions of the Scopes and focus on the critical role of monitoring that the spirit of the Alignment Artifacts isn't violated. ##### 2.7.6.2 FacilitatorDAOs are allowed to take unilateral action based on the Alignment Artifacts in determining whether an Alignment Conserver or other governance participants are acting misaligned and must be derecognized. If there is evidence that an Alignment Conserver needs to be derecognized, all FacilitatorDAOs are responsible for taking action. ###### 2.7.6.2.1 FacilitatorDAOs that fail to take action against misalignment must be penalized, including failure to promptly derecognize ACs that have acted misaligned. ###### 2.7.6.2.2 FacilitatorDAOs control one or more EGF instances and must immediately remove derecognized ACs from their instances of the EGF. ###### 2.7.6.2.2.0 To prevent the damage possible for malicious or negligent abuse of the derecognition powers, each FacilitatorDAO controls only specific EGF instances. This means a single rogue FacilitatorDAO cannot instantly cut off all EGF access to an AD. ###### 2.7.6.2.3 If FacilitatorDAOs act misaligned and abuse the ability to derecognize ACs or abuse other leverage available to them under the guise of penalizing misaligned actions, they must themselves be severely penalized. ###### 2.7.6.2.3.1 All other FacilitatorDAOs must also be penalized if they don't immediately propose penalties when a FacilitatorDAO takes misaligned actions. If all FacilitatorDAOs are simultaneously misaligned, the situation can be resolved through the whistleblower process. ###### 2.7.6.2.4 All the restrictions that apply to FacilitatorDAOs also apply to Facilitators. Facilitators cannot directly engage with counterparties. The only exception to this rule is in situations where Facilitators are coordinating to set up governance processes, if the interactions are clearly documented. ##### 2.7.7.0 *It is critically important that all interactions by the Facilitators are documented, so there is clear documentation that details what work is required for the governance processes to function. This reduces the risk that things will fail if a particular Facilitator becomes inactive for any reason.* ### 2.8: Professional Ecosystem Actors - GOV8 Professional Ecosystem Actors are external actors that are paid through the Scopes to do important work that benefit the MakerDAO ecosystem. Two types of Professional Ecosystem Actors exist: Advisory Council Members and Active Ecosystem Actors. Advisory Council Members is the most direct check on Active Ecosystem Actors, and as a result there is significant conflict of interest risk that must be avoided by ensuring Ecosystem Actors always fall into only one category or the other. #### 2.8.1: Advisory Council Member Ecosystem Actors Advisory Council Member Ecosystem Actors perform research and publish advice for the DAO to use in improving the Scopes Artifacts and their contained processes. Often, this is used as a check for choosing the best Active Ecosystem Actors available to supply a need defined in a Scope Artifact. The work of Advisory Council Members is implemented exclusively through modifications to the Scope Artifacts, and can also be used to receive advice regarding the specific interpretation of Scope Artifacts (which, if followed, must then be included in the Scope Artifact). The Scope Artifact improvements researched and suggested by the Advisory Council Members are presented to the ACs who then determine to what extent they want to follow their suggestions for designing MIP102s. #### 2.8.2: Active Ecosystem Actors Active Ecosystem Actors work according to the specifications of Scope Alignment Artifacts to receive funding for performing specific projects such as developing new features, performing data collection or analysis, performing marketing, growth, outreach or educational activities, legal work, government outreach, and other operational activities that benefit the Maker Ecosystem. Active Ecosystem Actors are the only type of actor that interacts with the Scopes that is allowed to do “real work” that isn’t strictly defined in, and bounded by, the Alignment Artifacts. ### 2.9: Interaction of Aligned Delegates, FacilitatorDAOs, and Advisory Council - GOV9​​​​​​​ #### 2.9.3: FacilitatorDAOs and Scope Advisory Councils A critical governance interaction is ACs getting professional input from Advisory Council Members about specific improvements that are possible in the Scope Alignment Artifacts. This happens with the FacilitatorDAOs following the instructions defined in the Advisory Council Articles. FacilitatorDAOs can also provide input directly to ACs. ##### 2.9.3.2 FacilitatorDAOs follow the instructions in the Advisory Council Articles to propose the onboarding of new Advisory Council Members, and to allocate resources for Advisory Projects to existing Advisory Council Members. ### 2.10: Core Governance Security - GOV10 GOV10 must cover Governance Security processes for deploying and reviewing executive votes. This must include multiple types of security review and automated tests. ### 2.11: SubDAO Governance Security - GOV11 GOV11 must cover the minimum security rules related to SubDAO governance actions. This includes ensuring SubDAOs do not take unnecessary technical risk. It also covers defining and preserving the MKR holder veto over all SubDAO governance actions. Attempts by SubDAOs to circumvent or remove the protections from the MKR voter veto is considered misalignment. ### 2.12: Scope Bootstrapping - GOV12 Before the Endgame State, the Governance Scope articles must be modified to accommodate the needs of the bootstrapping phase leading up to the Endgame State, and to minimize transition costs and friction. GOV12 must also contain processes for quickly fixing issues in any scopes that put the bootstrapping of governance at risk. The bootstrapping measures can override requirements and specifications in the Atlas as long as they are temporary and needed, and must all come to an end when the NewChain is launched. ### 2.13: Weekly Cycle Atlas Edits This article defines a Weekly Governance Cycle that provides a predictable framework for edits to the Atlas. #### 2.13.1 Every Monday, the Weekly Cycle for edits to the Atlas is carried out as governance polls, if any Weekly Cycle proposals have been submitted before the Monday giving the Governance Facilitators reasonable time to prepare the poll. The polls run for three days. Successful polls trigger direct edits to the Atlas. #### 2.13.2 PDs can trigger a Weekly Poll if they have at least 1 month of budget within their AD Buffer. To propose an Atlas Edit, a PD must post it in the Maker Improvement Proposal section on the forum, or reply to someone else’s proposal that they are submitting it to the weekly cycle. If it’s voted down, they lose their AD buffer. #### 2.13.3 Facilitators can reject a Weekly Poll if it is misaligned. If a Facilitator rejects a Weekly Poll for misalignment, the PD who triggered the poll loses their AD buffer. #### 2.13.4: Minimum Positive Participation Weekly Atlas Edits must have at least 20,000 MKR equivalent of yes votes to be accepted. ### 2.14: Monthly Cycle Atlas Edits This article defines a Monthly Governance Cycle that provides a predictable framework for edits to the Atlas. To propose an Atlas Edit, the author must post it in the Maker Improvement Proposal section on the forum. The final version of an Atlas Edit must be posted 7 days before Formal Submission, and cannot be Formally Submitted if it was changed within the last 7 days. #### 2.14.1: Governance Cycle Breakdown The first Monday of each calendar month marks the beginning of the Monthly Governance Cycle. Time is inclusive and based on UTC (Coordinated Universal Time) and the Gregorian Calendar. ##### First Wednesday after first Monday of the month Atlas Edit Authors can formally submit their Atlas Edit proposals before this Day. It is done through a message on the forum thread containing the Atlas Edit Proposal. ##### Week 1, Thursday The Governance Facilitators must come to consensus on whether each submission warrants moving forward to a Ratification Poll. ##### Week 2, Monday The Governance Facilitators publish the set of Ratification Polls. The format of these is defined in Atlas Article **2.14.2**. Ratification Polls are published to the community GitHub, submitted on-chain and appear on the official Voting Portal. ##### Week 4, Monday The Ratification Polls conclude, and each proposal or set of proposals is marked as either Accepted or Rejected by the Governance Process Support Ecosystem Actors or Governance Facilitators. #### 2.14.2: Ratification Poll Ratification Polls under the Monthly Governance Cycle must meet these requirements: - Duration: 2 Weeks. - Minimum Positive Participation: 10,000 MKR. - Type: Binary Poll (yes/no/abstain). Ratification Polls under the Monthly Governance Cycle must contain: - Links to a specific version of a single proposal within the official Atlas GitHub. In order for a Ratification Poll to conclude successfully and the contained proposal(s) move to Accepted status, triggering an edit of the Atlas, each of the following conditions must be true: - Yes vote-weight must exceed No vote-weight when the poll closes. - Yes vote-weight must exceed the Minimum Positive Participation value of 10,000 MKR when the poll closes. #### 2.14.3: Calendar Exceptions Due to the multitude of cultural and religious holidays occurring in and around the month of December, there will be no Monthly Governance Cycle in the December of each year. ## 3: The Support Scope The Support Scope covers various critical tasks that support the ecosystem, including governance process infrastructure and management, SubDAO and Ecosystem Actor support, and management of the Public Good Purpose System. ### 3.1: Scope improvement - SUP1 SUP1 must cover the key specifications and processes necessary for the Scope to reliably improve itself long term without risk of misalignment. #### 3.1.1 The Support Scope must have a specialized Advisory Council that is able to propose improvements to the language of the Scope Artifact that increases its Alignment Artifact Strength and increase efficiency and security of the Maker Ecosystem. #### 3.1.2 The Support Scope must have a customized strategy towards its display and interaction through the DAO Toolkit to make it maximally user friendly. ### 3.3: DAO Toolkit Core Development - SUP3 The DAO Toolkit is a unified system for displaying the Alignment Artifacts and all of the data, processes and interaction necessary for Maker Governance and internal SubDAO governance to function optimally. It is distributed by all AllocatorDAOs and FacilitatorDAOs as a part of their SubDAO Frontend. SUP3 must cover all necessary processes to ensure its underlying technology develops appropriately. #### 3.3.1 Core Development and Maintenance Management and Strategy. #### 3.3.2 Identification and development of standardized, common reusable modules. #### 3.3.5 Research and specification of best practice for using the DAO Toolkit by Scopes. #### 3.3.6 Monitoring of adherence with best practice and flagging to governance in case of issues. #### 3.3.7 Development of the client side Tookit AI systems for using the DAO Toolkit and interacting with the CAIS. #### 3.3.8 Contributor and Alignment Conserver privacy tools and support. ### 3.4: Core Artificial Intelligence System (CAIS) - SUP4 MakerDAO must have a cutting edge system of diversified AI tools that is accessible by Alignment Conservers and tokengated for MKR holders and SubDAO token holders. #### 3.4.1 SUP4 must define a robust and aligned solution for the core model to ensure it will have the greatest possible positive impact on the ability of Maker Governance to strengthen the Alignment Artifacts and monitor all governance processes for alignment and efficiency. The Core Model must also be a powerful tool for the incubation and growth of the SubDAOs. #### 3.4.2 The CAIS must use a technical approach that is diversified, and continuously improved based on the latest science and practical experience of operating and using the CAIS. #### 3.4.3 SUP4 must maintain a well balanced model for token gating access to CAIS, weighted in favor of MKR holders but ensuring that SubDAO token holders can also access and unleash the benefit of CAIS for SubDAO governance, innovation and growth. ### 3.5: Budgets, Milestones and results reporting standardization - SUP5 SUP5 must ensure that there is a solid baseline understanding of how to measure and monitor results and how to distinguish between goals that actually benefit the DAO and goals that are misaligned. #### 3.5.1 SUP5 must develop and maintain best practices for how to ensure budgets are tightly connected to results and milestones, and that this connection is easy to understand and it is possible to comprehend whether a budget is performing or not. #### 3.5.2 SUP5 must ensure that there is adequate research into hidden risks that may compromise transparency over time or hide inadequate results. #### 3.5.3 SUP5 must ensure processes are in place for monitoring and flagging of failure to properly implement best practice to prevent risks. #### 3.5.4 SUP5 must contain a real time, up to date overview of all data and information relevant to understand budgets and the results they are producing. ### 3.6: SubDAO Incubation - SUP6 New SubDAOs are continuously created by the core protocol logic of NewChain, and SUP6 must ensure that the necessary infrastructure is available to maximally support this incubation process and support the new SubDAOs in generating as much value as possible for the Maker Ecosystem. #### 3.6.1 SUP6 must specify Genesis Scope template elements designed for FacilitatorDAOs, AllocatorDAOs and MiniDAOs, to ensure that they have everything they need from the moment they are incubated to function properly and carry out their specific roles. #### 3.6.2 There is always a Major SubDAO incubating, and as it is incubating the communication channels for its future community must be maintained and moderated, based on specifications provided in SUP6. ### 3.7: Ecosystem Actor Incubation - SUP7 Alongside the new Major SubDAOs that continuously incubate, SUP7 must ensure the proper elements are in place to incubate relevant Ecosystem Actors that can support the new SubDAOs #### 3.7.1 Clear Incubation Objectives must be specified that describe what gaps and opportunities exist in the ecosystem that Maker Governance wants to promote new companies to inject innovation for. #### 3.7.2 SUP7 must specify a strong proposal review process that describes how Facilitators must review and choose Incubation Proposals. AVCs or MKR holders must not interfere or micromanage with the selection process beyond setting objective guidelines, as this creates significant risk misalignment. #### 3.7.3 A high quality milestone and budget review process must be defined that applies specifically to Incubating Ecosystem Actors, in addition to the regular requirements specified in SUP5. #### 3.7.4 Infrastructure for monitoring and recording currently incubating Ecosystem Actors. #### 3.7.5 Maker Governance is allowed to have a relatively granular influence on the long run development of the ecosystem through SUP7, and as a result it must be monitored for misalignment risks, and must develop checks and balances that are as robust as possible over time. ### 3.8: Ecosystem communication channels - SUP8 SUP8 must cover the overall unified communication infrastructure used for governance ecosystem communication, including channels for inter-SubDAO communication and Ecosystem Actor interaction. ### 3.9: Ecosystem Agreements - SUP9 SUP9 must specify and standardize how Ecosystem Agreements work, to make it as convenient and easy as possible for Ecosystem Actors to do business in the Maker Ecosystem with guardrails and fair treatment. #### 3.9.1 SUP9 must specify a standardized way to publish and formally agree to Ecosystem Agreements. #### 3.9.2 SUP9 must specify a process for Ecosystem Agreement standardization that ensures that recurring patterns are dealt with uniformly, and that deviations from established standard patterns will incur proportional penalties and still be treated in the standardized way. #### 3.9.3 SUP9 must cover the methods for Ecosystem Agreement enforcement. #### 3.9.4 SUP9 must cover dispute resolution and the appeals process. ### 3.10: Resilience Fund - SUP10 SUP10 must cover the Resilience Fund, including relevant definitions and a secure claims process. ### 3.11: Resilience Research and Preparedness - SUP11 SUP11 must cover the resilience research and preparedness efforts. ### 3.12: Purpose System - SUP12 The Purpose System aims to fund public good open source AI and software projects that benefit the Maker Ecosystem and public good. At all times, at least 10% of the Purpose System funds must be used for more direct and specific impact solutions. #### 3.12.1 The Maker Protocol emits 60 million NewGovToken per year for the Purpose System from the moment NewChain is launched. #### 3.12.2 SUP12 must cover the long term Purpose System and the process for allocating purpose funds to SubDAOs in the yearly purpose contest, from the moment NewChain is launched. ## 4: The Protocol Scope In preparation for the upgrade to Atlas v2, the protocol scope is entirely defined by the Protocol Scope Bounded Mutable Alignment Artifact. ## 5: The Stability Scope The Stability Scope covers the management of the Dai Stablecoin. The Dai Stablecoin must be a permissionless and useful currency available to anyone. Its stability and risk must be managed to generate as much value for MakerDAO and public good as possible. ### 5.1: Stability Scope Improvement - STA1 STA1 must cover the key specifications and processes necessary for the Scope to reliably improve itself long term without risk of misalignment. #### 5.1.1 The Stability Scope must have a specialized Advisory Council that is able to propose improvements to the language of the Scope Artifact that increases its Alignment Artifact Strength and increase efficiency and security of the Maker Ecosystem. #### 5.1.2 The Stability Scope must have a customized strategy towards its display and interaction through the DAO Toolkit to make it maximally user friendly. ### 5.3: Core Stability Parameters - STA3 The Dai Stablecoin is stabilized with the help of the core stability parameters. STA3 must specify principles and processes for optimizing these core stability parameters to be Universally Aligned with their purpose. #### 5.3.2: The Dai Savings Rate The Dai Savings Rate is the rate Dai holders can earn on their Dai in the Dai Savings Rate smart contracts. It is determined algorithmically based on the Base Rate and the DSR Spread parameter. #### 5.3.3: Price Deviation Sensitivity Price Deviation Sensitivity is an algorithmic parameter set by Maker Governance that uses the Dai Price Oracle to determine if Dai is above or below its target price. If Dai is above the target price, the Base Rate is reduced. If Dai is below the target price, the Base Rate is increased. The rate of increase or decrease is determined by the algorithm chosen by Maker Governance with the aim of maximizing the Stability of Dai. ### 5.5: Real World Assets - STA5 Real World Assets are assets used as collateral for the Dai Stablecoin that are enforced through legal recourse by Arranged Structures. They have unique risks that must be safeguarded against. #### 5.5.1: Arranged Structures Arranged Structures are special legal structures set up by Ecosystem Actors to secure Real World Assets to help stabilize the Maker Ecosystem. PRO5 must define strict and detailed standards for how to properly establish, fund, interact with, monitor, improve and wind down Arranged Structures. Each Arranged Structure has a Conduit system that is automatically connected to all AllocatorDAOs, and allows them to send and receive Dai or other assets. ##### 5.5.1.1 Arranged Structures must have an AllocatorDAO owner. The owner assigns instructions to the Arranged Structure on behalf of MakerDAO, and determines if and how other AllocatorDAOs can access the Conduit of the Arranged Structure. #### 5.5.2: Arrangers Arrangers are Ecosystem Actors that assist in the design and operation of Arranged Structures. They are generally prohibited from ever being in a position where they can cause damage or loss to the Maker Ecosystem, beyond delays or annoyance. They advise in the creation of Arranged Structures, and Arranged Structures must always have an Arranger attached to it, to perform reporting on it. All details related to this must be covered in PRO6. The Arrangers manage a restricted function on the Arranged Structure Conduit that allows them to send assets onwards to the predetermined blockchain account of the Arranged Structure. ##### 5.5.2.1 The AllocatorDAO owner of the Arranged Structure can change the blockchain account of the Arranged Structure and change the Arranger. ### 5.9: Surplus Buffer and Smart Burn Engine - STA9 STA9 must cover the processes for setting various economic parameters related to Maker Protocol Surplus. #### 5.9.1: Surplus Buffer Upper Limit The Surplus Buffer Upper Limit determines when the Surplus Buffer sends its funds to the Smart Burn Engine. ### 5.11: MKR Backstop - STA11 If the Dai Stablecoin becomes undercollateralized, the Maker Protocol will automatically generate and sell MKR to recapitalize the system. #### 5.11.1 STA11 must define an emissions rate for the MKR backstop function that prevents risk of sudden failure. This must be continuously assessed and improved to maximize stability of the system in worst case scenarios. #### 5.11.2 STA11 must define a maximum level of MKR emission per undercollateralization event. This must be continuously assessed and improved to maximize stability of the system in worst case scenarios. #### 5.11.3 The protocol must contain an override mechanism that allows Maker Governance to continue emitting MKR beyond the maximum level. STA11 must cover processes for research and principles for which situations it should and can be safely used. #### 5.11.4 The protocol must contain an MKR backstop halt mechanism that immediately halts the backstop event in case of severe risk of total failure. #### 5.11.5 In case the backstop limit is reached and not overridden, or in case the backstop is halted during the event, the Dai target price receives a haircut to settle the remaining bad debt of the system. STA11 must cover this worst case scenario and research ways the damage can be mitigated. ### 5.14: Scope Bootstrapping - STA14 STA14 must cover all necessary measures to ensure the Stability Scope is properly bootstrapped before NewChain is launched and the Endgame State is reached. During the bootstrapping phase other Atlas Articles may be temporarily overridden if necessary for ensuring the success of the bootstrapping, until NewChain is launched. ## 6: The Accessibility Scope The Accessibility Scope covers accessibility and distribution efforts, and regulates user-facing frontends of MakerDAO Core and SubDAOs. Operational rules are defined in the Accessibility Scope Mutable Alignment Artifact, which can specify and optimize behavior and processes within the following constraints. ### 6.1: Scope improvement - ACC1 ACC1 must cover the key specifications and processes necessary for the Scope to reliably improve itself long term without risk of misalignment. #### 6.1.1 The Accessibility Scope must have a specialized Advisory Council that is able to propose improvements to the language of the Scope Artifact that increases its Alignment Artifact Strength and increase efficiency and security of the Maker Ecosystem. #### 6.1.2 The Accessibility Scope must have a customized strategy towards its display and interaction through the DAO Toolkit to make it maximally user friendly. ### 6.2: Brand Identity - ACC2 ACC2 must specify the brand identity of Maker, and processes for refining and improving the details and examples of the brand identity to ensure it is as good as possible. The brand should be reliable and stable over the long term. ### 6.3: Accessibility Reward System - ACC3 ACC3 must specify accessibility reward systems for third party frontends and SubDAOs to incentivize them to attract NewStable users, DSR users and SubDAO farm users. ACC3 must also specify an accessibility reward uniquely available to SubDAOs that bring MKR holders to Lockstake into the Sagittarius Lockstaking Engine. ### 6.4: Accessibility Assets - ACC4 ACC4 must specify principles and processes for managing the accessibility assets, such as communication channels and communication presence on external websites. ### 6.5: Accessibility Campaigns - ACC5 ACC5 must specify principles and processes for managing accessibility campaigns.