RWA Legal Documentation Operations Guide

Real World Assets (RWAs) are a collateral type in the Maker Protocol which require legal entities to represent the MakerDAO in order to interact with "real world" counterparties in deals ratified by governance.

For transparency purposes, under the open source ethos, MakerDAO publishes and requires counterparties to publish in the Maker forums any legal document defining the deal, transaction details and reporting.

Managing legal agreements drafting process with the counterparty and publication of final binding agreements is a process that is defined in this guide with the aim to help counterparties understand how to approach this task during initial collateral onboarding and later amendments required by the counterparty or the MakerDAO community and token holders during the deal life cycle.

There are two legal processes; Legal Process for Collateral Onboarding, and Legal Process for Amending and Managing Existing Collaterals.

Situation

  • The collateral application is a self-contained MIP or a MIP6 application published by a proposer in the MakerDAO forums.

  • The application is worked on by the relevant core units: Strategic Finance and Collateral Engineering Services.

Process

  • Legal documentation is prepared in advance of any Maker Governance vote, and made binding using a Governance Poll, that states that MakerDAO commits to publish the Executive Vote in a specified time frame, e.g. 30 days. This time frame gives a clear commitment to the MIP proposer on when the funds will be made available and also gives MakerDAO Core Units the flexibility to organize the Executive Votes in accordance to operational and security criteria.

  • Sample wording:

Other than this section and sections [cross-reference confidentiality], [cross-reference governing law], [cross-reference disputes] and [cross-reference miscellaneous] [cross-reference any other sections which the parties may consider appropriate], which shall be binding on the parties upon execution of this Agreement, the other provisions of this Agreement and each other financing agreement shall only become binding and effective on the parties [thirty (30)] days after the affirmative approval of Maker token holders of the transactions contemplated by this Agreement and the other financing agreements, as evidence under the tab “Polling” at vote.makerdao.com

Steps

Determining Governance Poll outcome

Situation

  • A RWA deal is live with a deployed vault.

  • An amendment on the legal agreements is needed, either triggered by MakerDAO or by the counterparty.

Process

  • Legal documentation is prepared in advance of any Maker Governance vote, and made binding using a Governance Poll.

    • If the amendment requires a change in the protocol (such as raising debt ceiling or modifying the stability fee), wording stating that MakerDAO commits to publish the Executive Vote in a specified time frame, e.g. 30 days should be included in the legal documentation amendment. The Executive Vote is where the actual change in the protocol is executed.

    • If no change in the protocol is needed, MakerDAO will at its own discretion, update the RWA_00X_DOC variable to the specific vault in order to include the amendment for transparency purposes only. This refers to the steps 3 and 4 in the table below.

  • A Governance Poll will be published which, if successful, will make the docs binding.

  • Sample wording:

Other than this section and sections [cross-reference governing law], [cross-reference disputes] and [cross-reference miscellaneous] [cross-reference any other sections which the parties may consider appropriate], which shall be binding on the parties upon execution of this Amendment, the other provisions of this Amendment shall only become binding and effective on the parties [thirty (30)] days after the affirmative approval of Maker token holders of the transactions contemplated by this Amendment, as evidence under the tab “Polling” at vote.makerdao.com

Steps

Determining Governance Poll Outcome

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