Unchained - El Auge de MakerDAO: Un Viaje Personal - Ep.171

Episode Date: May 6, 2020

Hi everyone, this is an essay by Mariano Conti of MakerDAO that was so popular, personal and relatable, especially to those living in Latin America, that we decided to have Mariano translate it and read it in Spanish. Share it with your Spanish-speaking friends who still don’t understand what crypto is about, to show how it solved real-world problems for at least one person.  Mariano Conti, jefe de contratos inteligentes de MakerDAO, nos lee su ensayo sobre su experiencia personal con criptomonedas, desde el punto de vista de un Argentino cuya familia ha experimentado períodos de hiperinflación, y de un freelancer que recibe pagos por su trabajo desde varios países. Mariano describe la evolución de Maker desde Dai de Colateral Único (ahora Sai) hasta Dai Multi Colateral, y también brinda su perspectiva de los eventos del Jueves Negro y las subastas de deuda subsecuentes que el protocolo debió llevar a cabo para regularizar su situación. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi everyone. This is an essay by Mariona Conci of MakerDAo that was so popular, personal, and relatable, especially to those living in Latin America, that we decided to have Mariano translate it and read it in Spanish. Share it with your Spanish-speaking friends who still don't understand what crypto is about to show how it solves real-world problems for at least one person. Hello to all right. My name is Laura Shin and I'm periodista that Kubriroprimeneiras. Also, I'm the amphitriona of this podcast, Unchained. This is an ensign of Mario Conti of MakerDAO that was so popular, personal, and facile to relational, especially for those that live in America Latina, that we decided that Mariano he would read it in Spanish.

Compartalow with friends that still not understand of what it's trat to the cryptocurrencies to show how resolved problems of the world real for at least one person. It's an example and I hope to hear your comments. And now, here is Mariana Conti, laying his ensigno, The Auge of Maker-Dao, a voyage personal. The Auge of Maker-Dao, a voyage personal. The Enshadow.

My ex-uels were without having access to his arras of all. the life. In 2001, Argentina traversed one of the worst crises economic of its history. The pesoysal-Argentino, artificially, vinculated one-a-one to dollar American, no could resistor. The exportations

were made to be competitive, no existia a policy monetary and independent, the people changed their pays their pesos for dollars, extradying of the banks, and a menudo transfiring to the or guardando

below the colchon. There was a time of a corridor a corridor. Then, the 1st of December of

2001, the government the government was the money of the money of the person, and instituted the

corralito, a congelament in the countries of the people that was that were just a

little a particular a particular a particular not a not it not were in retire

in dollars to not that accept to convert those dollars to pesos, the targetas of credit and debit continue functioning, but the scarcity of effective caused many problems in the economy. From the 21 of December of 2001 until the 1st of January of 2002, there were five presidents in the country.

Five presidents in 11 days. The situation empeorrable. The congelament of the banks continued, but now the major part of the deposits were changed by bonuses, denomined those accounts in dollars, all the accounts denomined as dollars

also were converted to pesos, or pacificated. Inmediately, despite, devalued the peso. At the commencing, back to one to one-four pesos per dollar, and then,

while, to let them floater liberally, he'll cancel the four pesos per dollar in a few months. around December of 2002. It's you can be

to do you do you're not your chaves, not are your monies, your money in the

bank or in the money or in the money, I would be recited this mantra to my

abelos. For the this not was the first that something that was

that I'm long of the years Argentina has suffered various devaluations

of the mona, period of hyperinflation corridos bankers, controls of capital, and congelament of active,

among other things. It's one of the reasons for the people buy dollars and they have gone under the colchon,

for the abuelos they give to their nietos in their year and for those that in Argentina,

the population in general not confia in the government or in the bankos. This also is the

reason for that I think that I think the Argentinians, a sometimes are more

disposed to get to risk of other areas, and they're more experts

in finances than other places in other places. Here, the majority of the

people work to do not learn to get to get to

get to money, if one gets to a year after, you know,

has a got a money a money to get

the reason for that we we investigate every alternative available, always in

a business, something that many times has been never been never been the response in the

crypto-monedas. My my voyage. My voyage with the crypto-monet was in 2014,

for necessity to have control of my money. But let me give me another path to

after. After a long period of living in the city of Mexico,

me moved to I knew there in the 86 to six

years, I'm to go to the city where I'm

a final of 2010 never I never was

I'm that never ever had ever ever to

that I did come to think that I

think that it was so in April of 2011

and having term the relationship with my my novi,

I, I gave or regal the majority of my pertenances, and I went to

New Yorker with two ballies, one with a other with a computer.

I could have had been a moment better to make

you know, but your so their economy in the

economy, in the major part of the most I've only through stories, anecdotes of parietes or the news.

Just six months after my country of origin, the government instituted new controls of capital. A the people common was prohibit to buy dollars in banks or casas of interchamble of divisas. Summated to this, an economy that vizabeth to be in a manner regular, an inflation of double-digit and the apetito Argentino for the dollars, was a recipe for the disaster and the markets Negroes. The dollars were used with a prima of the 50% of the value official,

and this has continued for years. Then, in 2014, when I saw working in a small agency digital in Buenos Aires, negotiated a salary regular in pesos and another below the mess in dollars. This was a practice common between professionals of the sector IT and technology. The problem was receiving the pay in dollars.

My employer no could deposit dollars in my account of bank, denomined in dollars in Argentina, because they were converted to pesos instantaneously to a tax 50% inferior to what I could vendar those in the market black. We're called market as well or dollar-asul. No, question for what. In that moment, the tariff official of the government

was around $8.00. In the market a blue, a dollar, me comprava $14. A deposit in my account bankaria local not was the ideal. Volar to Miami, I'd bring a bank and was out of discussion. PayPal, had time that was prohibited. My employer

me debed more than six months of salary. Until a day, mention it Bitcoin. The era Bitcoin. Bitcoin was a Frencher was known in Argentina, but not was my. The freelancers Argentinians had been using Bitcoin as a medium of pay of companies European and

Americanes for a long time, a menudo negotiating salaries that were denomined in dollars and with the liberty to receive their salary in something that the government no could be able toer. No put it was a potential until that personally me in the necessity to find a way to have my money in something more than the weight.

Then, I investigated a little, I discovered that was absolutely the same money, and I proceeded to cover six months of the time that

took the transference of Bitcoin, to something more later, I'd discoverer that me convert in part of a group more

great, tantos in Argentina had already had come to use Bitcoin, many because they'd

their potential, but many also too also, too also, too, for necessity. Was this other way that that conduce to dollar

and maintains a rasha the inflation? If it's so, we'd give us the good- was a way to vencered

a system, a way to maintain possession of the job of a bank traditional.

No, was without problems. Someone to who was a person to be paid to

be sure sure to be they're they're at the time of the month or when

is a complete a project. What is the type of change? It's when when it's when finally it's realise

the pay. Depending on the responses to these questions, it was to get to earn or to earn

money. A menudo these transactions not terminated because to the volatility. I'm

the liberty that Bitcoin me bring down. But it had to be something

more, right? Chega Ethereum. Discovered Ethereum, at end of 2015, some months after

of the mainnet, and I'm instantaneously. Here was the blockchain and cryptocurrency

that had all the benefits of Bitcoin, but, also was programmable. Nothing

better for my brain of the engineer. The possibilities not

had limit. It was like to discover a new world another

again. I put the most part of my I had been there's aorros in Ethereum, knowing that was there where they'd be

where I'd be my enfoque. Stillia no there was much there, but the idea of what could be was attractive.

And then so said the Dao-hack. No destrozo my experiences in Ethereum, but me

recorded of the risks involved in any new technology. Me I said to me myself that

all about all about with bifurcation or without bifurcation. Decidid that the risk were acceptable, being the alternative to the

utilization of the system of the system of traditional to the but Ethereum still had

a little a little. Stability Maker Dao I'm a maker in 2016 thanks to a series of

coincidences, the agency digital where I still was contracted by Maker and me uned as

a developer junior at the age of 35. I'm began to I was to learn about the premise of Maker little-a-pocket of centralized and

of finances abertas. I did the design of the first version of the Oraculos of Maker, the which still still are using. My motivation principal was the promise of a money stable vinculated to the dollar

American-united, unidantable, but with all the benefits of a crypto-moneda. Yeah, I was down. This was my new mission. No, I was part of the

team initial that scribed the document technical and not I worked in the first prototypes, but I also me consider a OG of Maker.

During those days, we still were in the type of design and experimentation. No existia

open sepeling, or if existed, still were in their commences. All the what we

did we were new. If we needed a a tool to resolve a problem, we'll construct. The uner me a maker also means to

to get my salary in Bitcoin and start to receive itter, what resulted is something for me, because the price of ether, and in reality

of almost all the cryptomonetas subia and subia. But to change something of ether to pay the

alchilar and the food not was so easy. Bitcoin still was the cryptocurrency was the cryptocurrency was the

market, for what had to go to Ether to BTC before to put ingressed to the world of the money traditional. Even so, it was a pain. It's June of 2017.

After years of work, Maker launched a version private of Dai of Collateral Unico, what we now call us SAI. The only purpose of this first version was being launched in Mainnet,

where the foundation would an CDP or position of deuda collateralized, with ether of collateral, and would create a sufficient SAI to pay the salaries of some volunteers in the maker

that were trying to prove for us the product that we're constructing. After to acuniar SAI and envi-lawed to the system would be paid immediately

and those tenedores of SAI would have a portion of the ITER used as a collateral. And functioned to the perfection, and

we showed that the system was ready for his moment stellar. Pocas months

after and after correct some version was a second version is the version to that actually

we referable as pro-sai. Only the foundation Maker and some new associates could have provided

this version. But even even a first cryptocurrency cryptocurrency stable respalded for an

active in the blockchain of Ethereum vinculated one to one to dollar state and respalded

by ether and another in a demonstration extreme of how to prove

your product many employees and not included for

the we're we're we're going that our money was

a moment historic To see those numbers in a transaction of Ethereum, knowing that, while the system functioned correctly, was a moment it was a experience revelator. Vinnered to my memory of the DAO,

that then was converted on the records of the system banked Argentino, and me sentia a salvo. If I'm going to confian in someone with my money, that are the nerds and the innovators, not the politicians, the banks, or the government. No, there was much to do with my recently emitiedy

even was a version beta-privada, no existia the tax of interest of Dye, no existia or Epo compound. More

a lot of enviars it, the idea was to convert it to either a other once. This

happened some times during the development, but we gave an idea of the

possibilities, of the future. And so we're we're December 2017. The month in

that Dai, of collateral unico, was launched. This was the launchment adequate, the ecosystem

was there during much time, and not us defraud. It's a great to grow to

a system financial under your own own your own own the simple promise

of an active stable. Presence we the nasimbing the finance

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are so ubiquous in the actuality, not would have been to almost a year after almost a year after. I love to think, and I hope that stay in mind with me, that the existence of Dye of Collateral Unico, put on march to many of the projects that we're going to. Thanks to the promise of a medium of interchamble. Companies like Instadap commenced-a-up

commenced-a-compan in a hackathon of 48 hours Dandons different and a few times even more tools to interact with the protocol maker and not

necessitated to pay permission no any to give permission in a protocol decentralized but who takes the decisions

who says how many is there is a certain amount of Ether, who determines the tariff to stability to pay for the SAI generated. That is the paper of the governance of Maker, and

is what he has the MakerDAO, an organization autonomous, decentralized. The role of the governance of Maker. In DAI of Co-Lateral, Unico, no existia in many palancas that were used.

Consistia primarily in two things. Sae cotiza for over the dollar, reduce the tariff of stability. Psychotisa for below of a dollar, to increase the

taxability. They're times more simple. Even as-as-a-comunied all the time as a year-of-the-one as-one-to-the-one to do the system

and what to do you do that's about. Dato curious, the chamas of governances soldian to do-sarses in my case at the hour of

the al-murso. I'm used many sasados with arriculars pustos, listening these calls for disgust of my family.

But, for the document technical, Dai of collateral unico, not was the objective

final. At being restalled only by Eter, Sae, even was very vulnerable

to the events type syne negro or black swan. Supponient that the price of

Lither cashed drastically, in question of minutes or hours, would be very

difficult for the system recuperars of that event. And, a past of

that's that's not a great that the crypto that's had been

his paris and he's stable. The price of the Ither passed

of $800 dollars at the launchment of Zai to 1,400 and then after 80.

Sin however, he did in the transcurs of various years.

And even so, Sae mantoo his promise of a size equal to

a dollar. And for an Argentino, this representable other good way of getting

access to dollars. When mentioned I had to have to superer some different

to use to Bitcoin to Bitcoin to a pesos after after a money

that say was in the market those difficulties disappeared those

operators and the operators and the Mostrators commerciales of Ventalibre commensable to accept SAI as

as part of money, the platforms of intercambio facilitated the company and the deposit of pesos

directly in a account bank area. The taxis of debit with SA is

turned to be used to be able to and the days of the factura All we know that stability and in an economy

as an inestable as my, when they're in a stability with decentralization and transparency, the result is an economy imparable. Now, permit me to

last two years to November of 2019 and the launchment of DAI Multicolateral. Dai Multicolateral, or MCD, MCD, MCD,

represents the culmination of years of work of hundreds of people. Toma lessons learned during two years of execution of Sai, iterating and

reparando errors and suppuests. Here, the governance of Maker has a work much more difficult to do. It has to

administer not one, but two active different used as as a guarantee to generate DAI, Ether, and Basic Attention

Token, or VAT. Sae, is a collateral, but it's a case special, because only it's a case of using from the old system of collateral unical to new. And in the last

weeks, it has added USDC as third corateral. The chamas governments of governance discusses the state of

the parity, the relation between the price and the tarifes of stability, and also one of the

major logros of Dae multicolateral, the tax of the interest of Dai. And, as a

the time, the community not only has become a better better organizing and so that's listening to

and putting changes in the system and in general reactioning rapidly to the conditions of the

market. Collapse of the markets. While I was this enshrie this ensue at the

March of 2020, was starting the torment perfecta. A war of prices of

petrolio and a that virus that generated uncertainty in the markets. Finals of February, no, we brought inquietude to all. Finally, we've seen a collapse

absolute of the markets traditional and of cryptocurrencies, the 12th of 2020. Around of the 50% of the value of the

ether, and the majority of the crypto monies in general, was disbeneceo de repented, and the DAI multicolateral,

respalded primarily by Ether, also was affected. The blockchain of Ethereum was congestioned, with prices with the gas

subient to the 300 gigaway per unit of gas, something unaudito. Not only the transactions were incredibly

costosas, but that were the same time, that the majority was stanked in the Mampool,

expecting their opportunity to be mined. All the actors in the ecosystem were affected

or are called pools of liquides, titulars of MakerVolts, tenedores of Dai, or Guardians. The guardians are, generally, bots automatized, that scanean the chain of blocks ethereal in search of opportunities of arbitrage. In the case of the Protocol Maker, the Guardianses participates in subastas of collateral that are produced when the positions are involved insufficiently capitalized, and the system remata this collateral to recover Dai and permanent. The oraculents also were affected.

With the crescente of offers of gas and tantas transactions in the sped, the oraculos, that are called to actualize the system with prices of the world real, tardarer, in retrospective, this permitted that some

proprietors of Bolts aggregarer more collateral or pagaring a little of their deude in Dai, because they had some of time additional to do it, before that the oraculo were actualized, with a price more

back and provoked a liquidation. But even so, simply not had sufficient space in the blocks of Itherium to include the transactions of all the world.

As a result of all the anterior, they decedernated a grand quantity of sub-subastas of colateral, and a sub-conjunct of these sub-sustas

were won't by postores that presented offers just over over the this was really the torment perfect

the property the world luching with the high prices and the demoraes the red

trying to adder die to add their volts the platforms of interchamble also

were affected as coinbase congeled effectively the retires for a

time due to the high the costed and the with the crescent demand of Dai and the crisis of liquidity, the price of the Dai

commenced to rise, getting to almost 1.14 Dai per dollar, the 12th of March. The guardians also suffered the consequences. If bien the Foundation Maker has a guardian to participate in subastas of collateral, also sent you the stress of these high prices of gas, transactions retrasadas and lack of liquidess. With tantas subastas, occurring at the BES, no

there was time sufficient to reclacal the collateral to DAI to participate in more subastas.

Of the four robots Guardians known that participated in these subastas two,

commensar offertas zero. The fact, the offerent sent were offers

for a penas decimals on the and they were more of

$4 million of Nisfer, basically gratis. After a time, the guardians

were able to recover liquides and they started to offer to know the restorating the space

competitive of the subasta. At final, they liquidated around of 1,200 volts,

what resulted in 4,4147 subastas. Due to the deficit of the subastats of

collateral, the system Maker needs to recover approximately 5.4 million of Dye. Here is where the governance and community decentralized and transparentes

are so important, and also is here where more brilliared. In the forums and chat of Maker, the community began to discuss the events and to planificate how to reactioner to the better. There was a voteation to change some parameters of risk in the system, giving the Guardians more time to offer them in the

subastas. Also, it was important to reduce the parity to a $1.00. The tariffes of stability were reduced. The TASA of interest of Dai was reduced to zero for first time

from its creation. Also, also a new collateral, not correlational, with the market crypto. USDC, the moneta stable is respalded by

money traditional. This proportioned diversification and would a fount additional of liquidess if were necessary. This not stood exempt of controversy, and I ask you to whoever to

read or learn the transcriptions of the Chamas of Governance from 12 to 20 March of 2020, to understand why the community took this decision. The system also needed to recover 5.4

million of DAI. The protocol Maker is designed to so that the people of MKR

cubes this deficit mediating the dilution of the

MKR. If a liquid a and the subast of

collateral not a diso and dishing to reem the

debt in die a a subast md and for the

time diluctions the value the value of the It's a risk that the titulares of MKR

and insta to act to responsibly, maintainers informed, participate, and vote. While I'm going to write, the protocol Maker created and completed with exit 106 subusts of debt. Each one recouded 50,000 DAI and offercied quantities of MCR. The total of MKR accrued was of 20,000, The community Maker is

the circumstances in toronto to the offertas and liquidations zero and are they finally determine how to address this problem. Invito to all to go to the Forum and participate in this discussion. There are much to learn of this experience and I hope

that all get more fervantes at final. There are a major participation in callas of governance and votation, is a construction new tools to make

to make sure to the public the fundation maker, and for the grand community

DFI. The titulares of MKR entienten now that's a great responsibility

to have this MKR. Because your action or inaction rapid as can

have consequences good or malas. In quite to me, I create plenament

in the system, the foundation and the community. My cheque of Pago still being 100% in Dye

and I continueer to make the protocol maker be more resistant for the major quantity of

time that I'm not something? In some moment of my story,

I'm to talk about the economy Argentina and the inflation. This

is to that day me has given the privilege and the opportunity to

to gain my salary in an active stable that no requires much effort and planification. No me has to think, how am I to pay my money in the hours, or I'm trying to buy something tangible

like a motorcycle that more or less to see the inflation. Only I'm and all the months gain a salary in a money a strong. It's so simple and

beautiful and so that. What many countries do present, we're we value Linda Shee mention in

your own ensuing How Memes can help crypto go mainstream

that she asked about the perspectives of different

types of different and she say and I say I'm far the

majority of the responses that were the I

were this is something that is something I the

long trajectory in the the way for to have control over your own money

in this economy so difficult, has led to many Argentinians to the discovery

of the cryptocurrencies, but of a way different to that I, or a person

technical would have done in 2012, 2013, or 2014. With

the surgiment of the cryptocurrencies stable, the idea of the idea of

money that can be censured or confiscated, but whose

value still being predesible, has desperado the interest of people of all the aspects of the life. And here is where I

do the distinction that does a advantage to the South American. A tolerance incredibly high to risk. When one is firmly that

no more riskoos that their own government or the bankers, any alternative is a lot of more attractive. I've seen

my own own own form of economy in internet, in groups of Telegram and WhatsApp a through reunions seminal. That never thought that were possible with the cryptomonets volatiles.

If you want to see the power real that the cryptomonets have over the people common, you insto to look at the sur. You'll finders a great number of users intelligent, who have been found

forms of protect their money during years, and always looking the next a great opportunity. I think the cryptomoneas stable and decentralized as like Dai are the next

grand opportunity that have been waiting. These are people trying to take positions a long-placement,

operations with margin or apalankment. Aregentin, Colombian, Venezolans and other that are

to be able to operate and want to do you, they're to deal to just to cover the

gastos, always resagated by the inflation and retom the control of their money.

They're to look at a system bankari that's unciated year after a year,

decade and could say, Basta, it's sufficient. Abuel, deseria

that could have seen this. Thanks so much for joining us today. To learn more

about Mariano and to read his essay in Spanish at Unchained

Podcast com. Check with a show notes inside your podcast player. All crypto, no hype, submerch. Shop Unchained T-shirts, hats, mugs, and stickers at shop.com. Again, that's shop.com. Unchained podcast.com. Unchained is produced by me, Laura Shin, with help from fractal recording, Anthony Yoon, Daniel Ness, Josh Durham, and the team at CLK transcription. Thanks for listening.