Pot - Detailed Documentation

The Dai Savings Rate

1. Introduction (Summary)

The Pot is the core of theDai Savings Rate. It allows users to deposit dai and activate the Dai Savings Rate and earning savings on their dai. The DSR is set by Maker Governance, and will typically be less than the base stability fee to remain sustainable. The purpose of Pot is to offer another incentive for holding Dai.

2. Contract Details

Math

  • mul(uint, uint), rmul(uint, uint), add(uint, uint)& sub(uint, uint) - will revert on overflow or underflow

  • rpow(uint x, uint n, uint base), used for exponentiation in drip, is a fixed-point arithmetic function that raises x to the power n. It is implemented in assembly as a repeated squaring algorithm. x (and the result) are to be interpreted as fixed-point integers with scaling factor base. For example, if base == 100, this specifies two decimal digits of precision and the normal decimal value 2.1 would be represented as 210; rpow(210, 2, 100) should return 441 (the two-decimal digit fixed-point representation of 2.1^2 = 4.41). In the current implementation, 10^27 is passed for base, making x and the rpow result both of type ray in standard MCD fixed-point terminology. rpow’s formal invariants include “no overflow” as well as constraints on gas usage.

Auth

  • wards are allowed to call protected functions (Administration)

Storage

  • pie - stores the address' Pot balance.

  • Pie - stores the total balance in the Pot.

  • dsr - the dai savings rate. It starts as 1 (ONE = 10^27), but can be updated by governance.

  • chi - the rate accumulator. This is the always increasing value which decides how much dai - given when drip() is called.

  • vat - an address that conforms to a VatLike interface. It is set during the constructor and cannot be changed.

  • vow - an address that conforms to a VowLike interface. Not set in constructor. Must be set by governance.

  • rho - the last time that drip is called.

The values of dsr and vow can be changed by an authorized address in the contract (i.e. Maker Governance). The values of chi, pie, Pie, and rho are updated internally in the contract and cannot be changed manually.

3. Key Mechanisms & Concepts

drip()

  • Calculates the most recent chi and pulls dai from the vow (by increasing the Vow's Sin).

  • A user should always make sure that this has been called before calling the exit() function.

  • drip has to be called before a user joins and it is in their interest to call it again before they exit, but there isn't a set rule for how often drip is called.

join(uint wad)

  • uint wad this parameter is based on the amount of dai (since wad = dai/ chi ) that you want to join to the pot. The wad * chi must be present in the vat and owned by the msg.sender.

  • the msg.sender's pie amount is updated to include the wad.

  • the total Pie amount is also updated to include the wad.

exit(uint wad)

  • exit() essentially functions as the exact opposite of join().

  • uint wad this parameter is based on the amount of dai that you want to exit the pot. The wad * chi must be present in the vat and owned by the pot and must be less than msg.sender's pie balance.

  • The msg.senders pie amount is updated by subtracting the wad.

  • The total Pie amount is also updated by subtracting the wad.

Administration

Various file function signatures for administering Pot:

  • Setting new dsr (file(bytes32, uint256))

  • Setting new vow (file(bytes32, address))

Usage

The primary usage will be for addresses to store their dai in the pot to accumulate interest over time

4. Gotchas / Integration Concerns

  • The dsr is set (globally) through the governance system. It can be set to any number > 0%. This includes the possibility of it being set to a number that would cause the DSR to accumulate faster than the collective Stability Fees, thereby accruing system debt and eventually causing MKR to be minted.

  • If drip() has not been called recently before an address calls exit() they will not get the full amount they have earned over the time of their deposit.

  • If a user wants to join or exit 1 DAI into/from the Pot, they should send a wad = to 1 / chi as the amount moved from their balance will be 1 * chi (for an example of this, see DSS-Proxy-Actions

5. Failure Modes and Impact

Coding Error

A bug in the Pot could lead to locking of dai if the exit() function or the underlying vat.suck() or vat.move() functions were to have bugs.

Governance

The dsr rate initially can be set through the Chief. Governance will be able to change the DSR based on the rules that the DS-Chief employs (which would include a Pause for actions).

One serious risk is if governance chooses to set the dsr to an extremely high rate, this could cause the system's fees to be far too high. Furthermore, if governance allows the dsr to (significantly) exceed the system fees, it would cause debt to accrue and increase the Flop auctions.