End's purpose is to coordinate Shutdown. In short, Shutdown closes down the system and reimburses Dai holders. This process can occur during upgrades (Dai iterations), as well as for security reasons in the event that implementation flaws arise in both in the code and in the design.
cage- Locks the system and initiates shutdown. This is done by freezing the user-facing actions, canceling
flopauctions, locking the rest of the system's contracts, disabling certain governance actions that could interfere with the settlement process, and starting the cool-down period.
cage(ilk)- Tags the Ilk prices / Sets the final price for an ilk (
skim- Settles a Vault at the tagged price / Cancels owed Dai from the Vault
free- Remove (remaining) collateral from a settled Vault. This occurs only after there is no debt in the Vault.
thaw- Fixes the Dai supply after all Skims / Fixes the total outstanding supply of stablecoin.
flow- Calculates the fixed price for an ilk, possibly adjusting the
cageprice with surplus/deficit.
pack- Locks Dai ahead of Cash / Puts some stablecoin into a
bagin preparation for
packed Dai for collateral / Exchange some Dai from
bagfor a given
gem, share proportional to
file- The Governance configuration—sets various parameter values.
skip- optionally cancel live auctions.
wards(usr: address)- Auth Mechanism
vat- Vat contract
cat- Cat contract
vow- Vow contract
spot- Spotter contract
live- Cage flag
live= 1, indicating the system is running normally. Thus, when
cage()is invoked, it sets the flag to 0. This includes the
Endcontract, which means that
cage()can only be invoked once and the subsequent functions cannot be invoked until we are "dead" and in the End process
ilk- A collateral type
when- Time of cage / the time of settlement.
wait- Processing cooldown duration / the length of processing cooldown.
debt- Outstanding Dai after processing / outstanding stablecoin supply, after system surplus/deficit has been absorbed.
tag- Cage price / price per collateral type at time of settlement.
gap- Collateral shortfall / shortfall per collateral considering undercollateralised Vaults.
Art- Total debt per Ilk/outstanding stablecoin debt.
fix- Final cash price / the cash price for an ilk (amount per stablecoin).
bag(usr: address)- Dai packed for
cash/ nontransferable stablecoins ready to exchange for collateral.
out- Cash out / the amount of already exchanged stablecoin for a given address.
skip- Optionally cancel live auctions.
wad- Some quantity of tokens, usually as a fixed point integer with 10^18 decimal places.
urn- A specific Vault.
tend- To make a bid, increasing the bid size.
bid- The quantity being offered for the
lot- The quantity up for auction.
dent- To make a bid, decreasing the lot size.
cageis the most complex mechanism within the Maker Protocol. This is because the
cagemust alter the behavior of almost every component of the system as well as perform under a variety of possible undercollateralization regimes. Listed below are a number of key properties, such as Dai and Vault parity, or the lack of race conditions, which are desirable (nice-to-have) properties of Shutdown, and are not, in fact, all satisfied by the real-world implementation of Shutdown.
cagewill be the equity value of the Vault before
cage, as judged by the collateral price used by
cage, or zero, whichever is greater.
cageauthority to supply any off-chain calculated values. For example, it can rely entirely on the last OSM price feed values.
skimfirst on the Vault to remove the debt and the backing collateral and then calling
freeto release the remaining collateral from the Vault).
flipauction at any time by calling
skip(ilk, auction-id)after the
cage(ilk)). Flap and flop auctions are frozen by the initial
cage(). Both Flap and Flop auctions can be
yanked to return the bids to the last bidder.
skipfor flip auctions or call
yankdirectly for flap and flop auctions. If no one calls these functions, the auctions will not be canceled.
End's purpose is to coordinate the Shutdown of the system. This is an involved and stateful process that takes place over the nine following main steps.
ilk). This is done by freezing the following user entry points:
yankon the respective auction contract. One reason these auctions get frozen and canceled is because the shutdown process was designed to pass along the system surplus or system debt to Dai holders. Additionally, there are no guarantees regarding the value of MKR during a shutdown, so mechanisms that rely on MKR's market value cannot be relied upon, which means there is no reason to keep running the auctions that impact MKR supply. More specifically, the reason for
flapauctions getting canceled is as follows:
flapauctions will no longer serve their purpose. This is because, after a shutdown, the surplus is designed to be allocated to Dai holders. Thus, canceling
flapauctions during shutdown allows the system to return the surplus Dai back to the
Vow’s balance and ultimately back to Dai holders.
flopauctions also stop serving their purpose. This is because the bad debt is passed as a haircut (lower-than-market-value placed on an asset being used as collateral in a Vault) back to Dai holders if there is no other system surplus available.
flipauctions, they are not immediately canceled (but can be canceled by any user) because they are still tied to the valuable collateral in the system. Collateral auctions continue to run and Keepers can continue to bid on them, and if not, the auctions can be
cat.bitecannot be called as the function requires
live == 1, disabling liquidations after shutdown. Additionally, after the End begins, all vaults must be
skimmed and then
skip()(similar logic to
flapauctions). If an auction is skipped, the bids are returned to bidders and collateral is returned to the original Vault (with the liquidation penalty applied in the form of increased debt).
yankon the Flipper.
tend-phase (allows bids to be made, thereby increasing the
bidsize) of the auction by returning the guy's Dai bid and moving the Gems from the Flipper to the End.
dentphase auctions (allows bids to be made, decreasing the
lotsize) continue to the
dealphase as they have already raised the necessary Dai and are already in the process of returning Gems to the original Vault holder.
Endcontract. The last step in this process is to begin the cooldown period.
cage(ilk)works by setting the
cageprice for each
ilk. It does this by reading off of the price feed. This is required as we must first process the system state before it is possible to calculate the final Dai/collateral price. In particular, we need to determine two things:
gap, which is the collateral shortfall per collateral type by considering under-collateralized Vaults. (b) The
debt, which is the outstanding Dai supply after including the system surplus/deficit.
skimfunction described below. Next, you can see how (b) unfolds below.
skim(ilk)function works to cancel all of the owed DAI from the Vault. Any excess collateral remains within the Vault(s) for the owner(s) to claim. Then, the backing collateral is taken.
Flip) model not allowing for any more Dai to be generated. This means that the Dai generation comes from
tendauctions. Thus, if everything is in
dentwe know the generation is over. This occurs when all auctions are in the reverse (dent) phase. In addition to ensuring that the auctions will not generate any further Dai, the Dai Savings Rate (
pot.drip) must also be shut off during the End so that the total debt does not change.
dent- reverse auctions) no longer affect any more of the total debt, as the Dai was already recovered. Lastly, for the auctions in the first phase, they can be canceled and return the collateral and debt to the Vault.
waitsets the cooldown period. The time duration of
waitonly needs to be long enough to be able to
skimall of the undercollateralized Vaults and
tend-phase auctions. This means that it can, in fact, be quite short (for example 5 minutes). However, due to the possibility of scenarios such as network congestion occurring, it may be set longer.
skip, it will cancel all ongoing auctions and seize the collateral. This allows for faster processing of the auctions at the expense of more processing calls. This option allows Dai holders to retrieve their collateral much faster. The
skip(ilk, id)will then proceed to cancel each of the individual flip auctions in the forward phase (
tend) and retrieve all of the collateral and return Dai to the bidder. After this occurs, the reverse phase (
dent) auctions can continue as they normally would, by performing either
skipbeing enabled on a per-auction basis. When a Vault has been processed and has no debt remaining, the remaining collateral can be removed.
free(ilk)method will then remove the collateral from the caller's Vault. After
skimhas been called,
free(ilk)allows the owner to call as they need. It will remove all of the collateral remaining after step 3, basically, all of the collateral that was not backing the debt. If you did not have debt in your Vault at the time of the
Endyou do not need to do step 3 and can proceed directly to this step to free your collateral.
thawfunction. The assumption is that all under-collateralized Vaults are processed and all auctions have unwound. The purpose of
thawis to fix the total outstanding supply of Dai. Note that it may also require extra Vault processing to cover the
vat.dai(vow) == 0requirement is what guarantees that the vow surplus has been taken into account, which means that before you can
thaw, you must
skimas many Vaults as needed in order to cancel any Dai surplus in the vow. Canceling Dai surplus is done by calling
flow(ilk)function will calculate the cash price for a given ilk (
fix) and adjusts the
fixin the case of deficit/surplus. At this point in the mechanism, we have computed the final price for each collateral type and Dai holders can now turn their Dai into collateral. Each unit of Dai can claim a fixed basket of collateral. Dai holders must first
packsome Dai into a
bag. Once packed, Dai cannot be unpacked and is not transferable. More Dai can be added to a bag later.
pack(wad)will place Dai into a bag in preparation for
cash, which dispenses collateral to
bagholders. The bigger the
bag, the more collateral can be released.
cash(ilk, wad)to exchange some of the Dai from your
bagfor gems from a specific ilk. Note that the number of gems will be limited by how much packed Dai you have (how big your
Endprocess. Due to this fact, we depend on third parties to buy up post-cage Dai to use for reclaiming large portions of Dai. Overall, there will be large amounts of Dai leftover in the system.
cashthrough each ilk in the system to completely cash out their Dai.
cash(ilk, wad)to redeem the proportional amount of the specified collateral that corresponds to the amount of Dai that was
pack’ ed, where the
packfunction is used to aid with the redeeming of the different collaterals in different transactions. For example, let’s say you have 1000 Dai. You first
packfor the respective collateral types (
ilks), then for each
cashcall, you will redeem what the 1000 Dai represents from the total Dai supply. In return, you will get the same proportion of that same collateral that was locked for all Dai holders. Therefore, the best approach a Dai holder can take is to
cashevery collateral type (
ilksare undercollateralized, Dai holders will end up taking a bit of a cut as a result. This is because other
ilkswill not be used to "cover for" an underwater collateral type.
thawfunction should ensure that
Vow.heal()is called within the same transaction.
vow. This would prevent
thawfrom being called and thus, End from progressing. To prevent this, we would call
healto clear out that excess Dai and proceed with
waitperiod. If you set an incorrect
wait/cooldown period (if this is set early on) then auctions are later extended and this is not reset.
thawto be called too early, all the
Flipauctions may not have completed and the system may have an incorrect accounting of total
skimapplies to all Vaults (not just the undercollateralized ones).
waitvalue should not be too large, so governance should advise for this at least.
Endwill read the Collateral price from the
pip, this can result in the collateral price being only as accurate as the last recorded price. If
pipreturns a bad price due to oracles getting hacked, the
Endwill be affected.
Endreads the price off of the
pip(for reference, this occurs on line 261 of
tagbefore the price is called on Global Settlement.
median, it takes approximately 30 min for the OSM, and then the Global Settlement process takes over an hour to work. Therefore, by the time it triggers, you will have a bad price in the
pipand this will cause the system to fail.
End.waitwhen set to maximum can result in it not being possible to call
thawand therefore resulting in the Shutdown not being able to proceed.
End.wait, when set to the minimum, can result in
thawbeing called before all auctions have finished, resulting in debt being calculated incorrectly and ultimately setting a wrong collateral price.
End.cageis called, all Dai holders are left holding an unstable asset in place of their desired stable asset. This could result in a market price crash across all collateral due to liquidations & sell-offs.
End.spot- when set to attacker (
address: set to attacker-controlled address), can cause shutdown to fail. This is unfixable. For this scenario to occur, the malicious entity (governance or otherwise) would need to be
auth'ed on the