# MIP6c3-SP2: Modify the Collateral Application Form ## Preamble ``` MIP6c3-SP: 2 Title: Subproposal for changing the collateral application form Author(s): @lollike, @monkey.irish Contributors: Tags: mip-amendment Status: Accepted Date Proposed: 2022-03-09 Date Ratified: 2022-04-25 Forum URL: https://forum.makerdao.com/t/mip6c3-sp2-modify-the-collateral-application-form/13787 Ratification Poll URL: https://vote.makerdao.com/polling/QmTGxRjL ``` ## Specification ### Motivation Since the inception of MIP6, MakerDAO and Core Units involved in collateral onboarding have gained a lot of insights from onboarding new collateral types into the Maker Protocol. These insights allow us to better understand what collateral types are desirable for MakerDAO from a risk, cost and revenue perspective. Furthermore, analyzing the past work has allowed us to more precisely estimate the amount of work and cost of onboarding and continuously maintain collateral types in the Maker Protocol. In addition, CES has analyzed previous domain team assessments and have solicited general input from said domain teams to understand what data is necessary for them to make an informed assessment. The fact that the MakerDAO community has greenlit many assets, of which the majority according to Core Units involved in the collateral onboarding process is not fit for onboarding is a symptom of lack of relevant information to make an informed decision. The conclusion of this analysis by CES and Collateral Management Onchain (CMON) Stakeholders is that the current application template does not contain all necessary information for Core Units or MakerDAO to make an initial informed decision whether or not a collateral type should be greenlit. This leads to Core Units and the general MakerDAO community having to spend time searching for information, rather than just verifying the correctness of data presented upfront. The goal is therefore to amend the collateral application template to contain relevant questions that allow Core Units and the MakerDAO community to more easily make an informed opinion on whether or not a collateral type is fit to be greenlit to be onboarded into the Maker Protocol. Comparing applications based on the new application template with the (soon to come) recommended metrics should therefore give the MakerDAO community a much better framework for assessing collateral applications. ### List of Changes to Application Questions The template has been rearranged and grouped into new sections. Therefore the entire new collateral template, containing both existing and new questions is proposed below. **Background Information** 1. Who is the interested party for this collateral application? 2. Provide a brief high-level overview of the project, with a focus on the applying collateral token. 3. How long has the project been live in production? 4. Provide a brief history of the project. 5. Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated. **Asset Information** 6. What type of asset is it? (e.g. store of value, currency, commodity, capital asset, governance token etc.) 7. How is the asset used and does it give any rights to holders? (e.g. financial claims, dividends, governance rights) 8. What is the market cap for the asset? 9. Where does exchange for the asset occur? 9.a Provide exchange data on market liquidity, volume and order book depth. 10. Is the asset settled on chain (trustless) or off chain (trusted)? 11. If offchain (trusted) settlement: describe what are the involved entities, process and estimated time. 12. List any possible oracle data sources for the proposed collateral type. 13. List any parties interested in taking part in liquidations for the proposed collateral type. **Business Questions** 14. What is/are the expected use case(s) of the Dai generated by the vault? 15. What is the amount of Dai expected to be generated against the collateral and what is the timeline? Is there a commitment on a minimum amount of Dai to be generated? 16. What are the strategic benefits for MakerDAO in onboarding the collateral? **Legal Questions** 17. What are the legal risks associated with the tokens? 18. (Optional) Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in? 19. (Optional) Has your project obtained any legal opinions or memoranda regarding the regulatory standing of the token or an explanation of the same from the perspective of any jurisdiction? If so, those materials should be provided for community review. 20. (Optional) Describe whether there are any regulatory registrations for the token and provide related documentation (including an explanation of any past or existing interactions with any regulatory authorities, regardless of jurisdiction), if applicable. 21. Is issuance of the asset decentralized (trustless) or centralized (trusted)? 20.a If centralized/trusted: by which legal entity, type of entity and jurisdiction? **Technical Questions** 22. Link any available audits of the project. Both procedural and smart contract focused audits. 23. Has the token (and/or supporting protocol) been formally verified? 24. Does the asset follow a token standard? (E.g. ERC20, ERC721, ERC1400) 25. Is the asset, or asset balances, controlled by a central actor, or group of actors (e.g. through a multisig, or DAO)? 26. Does the token have whitelist or blacklist functions? If so, what is the process for utilization and what stakeholders are involved? 27. Can the token implementation be upgraded/changed? If so, what is the process and what stakeholders are involved? 28. Does the token contain rebasing logic?