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220 lines
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220 lines
9.0 KiB
Plaintext
---
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title: "Understanding MKR spread for Delegate Targeting"
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author: "Carlos Mercado"
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date: '2022-08-30'
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output:
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html_document:
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code_folding: hide
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editor_options:
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chunk_output_type: console
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---
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# Intro
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Flipside's governance team works deeply with the MakerDAO team to create, discuss, and vote on proposals that
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ultimately improve Maker's market position and revenue model. In order to increase our influence
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at Maker, we seek delegation of MKR to our voting address.
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This markdown details use of the new Flipside `ethscore` package to identify potential
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addresses to target to request/earn delegation of their MKR to our voting address.
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# Package Requirements
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ethscore uses shroomDK to access Flipside data for its analysis. The best way to install these
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packages is via devtools install_github().
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```{r, eval = FALSE, message = FALSE, warning= FALSE}
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# This chunk does not eval
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# library(devtools) # install if you haven't already
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# devtools::install_github(repo = 'FlipsideCrypto/sdk', subdir = 'r/shroomDK')
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# devtools::install_github(repo = 'FlipsideCrypto/ethscore')
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```
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# Addressable Market of MKR Delegation
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Not all holders of an ERC20 are externally owned accounts (EOAs). Some are contract addresses,
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others are gnosis-safes. Among EOAs, there are central exchange managed EOAs for coordinating deposits and withdrawals
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on and off chain which would be inappropriate targets for delegation. Also some EOAs are 'cold storage' in that they hold a balance but have never initiated a transaction. If an EOA has never done a transaction, it is unlikely its first
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will be delegation of a token which requires approvals and other contract interactions that the user may find risky.
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Thus, for the purposes of growing our delegation, it is imperative we understand the addressable market
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as:
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- EOAs that are active and likely human owned
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- Gnosis safes, e.g., DAO multi-sigs.
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- MKR in the delegate contract(s)
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- Note: this is 'pvp' in that each MKR we are delegated from this contract is explicitly a MKR taken from another delegate. While we support competition, our first goal is to activate more MKR, not simply fight over a fixed pool.
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## Current balance of MKR held by those with 1+ MKR
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'Dust' is common in crypto. Users make swaps of non-integer sizes and end up with balances that use many of the
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18 decimals permitted by ERC20s, e.g., having 0.0042069 MKR (~ $3 at time of writing). This naturally inflates
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the 'holders' number we commonly see in tools like etherscan.
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Of the 87,000 Holders of MKR, only 6,375 (7%) have at least 1 whole MKR (~$700 at time of writing).
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Given that MKR uses on-chain voting on the Ethereum Layer 1, it may be cost prohibitive in ETH gas
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terms for smaller holders to delegate and vote on-chain (as opposed to an off-chain tool like Snapshot).
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```{r, message = FALSE, warning= FALSE}
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library(shroomDK)
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library(ethscore)
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library(dplyr)
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library(reactable)
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library(plotly)
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mkr <- tolower("0x9f8f72aa9304c8b593d555f12ef6589cc3a579a2")
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max_block <- 15440000 # August 30th 11AM UTC
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api_key <- readLines("api_key.txt") # get a free key @ https://sdk.flipsidecrypto.xyz/shroomdk
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mkr_balances <- address_token_balance(token_address = mkr, min_tokens = 1,
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block_max = max_block, api_key = api_key)
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message(
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paste0('There are ', nrow(mkr_balances), ' holders of MKR with at least 1 MKR (as of block: ', max_block, ")")
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)
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plot_ly(mkr_balances, x = ~ADDRESS_TYPE, y = ~log(NEW_VALUE), color = ~ADDRESS_TYPE,
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boxpoints = "all", jitter = 0.3,
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hoverinfo = 'text',
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hovertext = ~paste0(
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'Log-MKR Balance: ',
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round(log(NEW_VALUE), 2),'\n Raw MKR Balance: ',
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scales::label_comma()(floor(NEW_VALUE))
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),
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type = 'box') %>%
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layout(title = '\nDistribution of MKR among those with 1+ MKR',
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xaxis = list(title = 'Address Type'),
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yaxis = list(title = 'LOG(MKR Balance)')
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)
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```
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Because holdings of most ERC20s is highly skewed (i.e., most addresses have very few MKR and a few have very large amounts)
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a LOG scale is used to more cleanly see differences in the distribution of MKR across Address Types.
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The key insights to note:
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- Non-targets like contracts, cold storage EOAs, and central exchange EOAs have a wide variance in their MKR holdings.
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- Target EOAs (Orange, hover over to see non-LOG values) have a median of 2 MKR each and a 75% percentile of ~95 MKR.
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- The top holders of MKR are contracts and central exchange EOAs.
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In practical terms, of the 977,000 MKR total supply held by 87,000 holders (Etherscan above), there are only
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5,150 EOAs active and with enough MKR (1+) to be delegate targets. These EOAs hold 356,015 MKR, only 36% of supply.
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```{r}
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mkr_smmry <- mkr_balances %>% group_by(ADDRESS_TYPE) %>%
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summarise(num = n(),
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total = scales::label_comma()(floor(sum(NEW_VALUE))),
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avg = scales::label_comma()(floor(mean(NEW_VALUE))),
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median = scales::label_comma()(floor(median(NEW_VALUE))),
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max = scales::label_comma()(floor(max(NEW_VALUE))),
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sd = scales::label_comma()(floor(sd(NEW_VALUE))))
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reactable(mkr_smmry,
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columns = list(
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ADDRESS_TYPE = colDef(name = 'Address Type'),
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num = colDef(name = 'Count', align = 'right'),
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total = colDef(name = 'Total', align = 'right'),
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avg = colDef(name = 'Average', align = 'right'),
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median = colDef(name = 'Median', align = 'right'),
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max = colDef(name = 'Max', align = 'right'),
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sd = colDef(name = 'Standard Deviation', align = 'right')
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))
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```
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```{r}
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message(
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paste0(
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'MKR Governance Contract has ',
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scales::label_comma()(floor(mkr_balances[
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mkr_balances$ADDRESS == tolower('0x0a3f6849f78076aefaDf113F5BED87720274dDC0'), "NEW_VALUE"]
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)),
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' MKR'
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)
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)
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```
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The MKR governance contract: 0x0a3f6849f78076aefaDf113F5BED87720274dDC0 held 188,866 MKR as of
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block 15440000. The Largest contract and overall address holder of MKR.
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This means of the total 977,631 MKR: 544,881 (~56%) is practically available for delegation.
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- 356,015 in EOAs w/ 1+ MKR that are not in the governance contract.
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- 188,866 in the governance contract whose delegation can be fought over pvp style.
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- Note: excluding the single gnosis-safe holding 9,556 for now.
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At time of writing, Flipside Crypto has ~9,000 MKR delegated to it (4.7% of current governance).
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## Time-Weighted MKR Holders
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Instead of analyzing holders based on current balance on MKR, we can add weight for *having held* MKR
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for a long time. For example, weighing an address whose held 10 MKR for 100,000 blocks as a better delegate
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target than one who has held 100 MKR for only 1,000 blocks.
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Giving users 1 point per MKR for every 1,000 blocks where they held at least 0.1 MKR
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in the range of Jan 1, 2021 (block #:11,566,000) to
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Aug 30th 11am UTC (block # 15,440,000) it is clear there is a strong correlation
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between holding MKR now and having held it in the past- but important outliers and nuance
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allow for more precision in targeting potential delegates.
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```{r, message = FALSE, warning= FALSE}
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min_block <- 11566000
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mkr_timeweighted <- address_time_weighted_token_balance(mkr,
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min_tokens = 0.1,
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block_min = min_block,
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block_max = max_block,
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amount_weighting = TRUE,
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api_key = api_key
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)
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plot_ly(mkr_timeweighted, x = ~ADDRESS_TYPE, y = ~log(TIME_WEIGHTED_SCORE),
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color = ~ADDRESS_TYPE,
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boxpoints = "all", jitter = 0.3,
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hoverinfo = 'text',
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hovertext = ~paste0(
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'Log-MKR TW Score: ',
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round(log(TIME_WEIGHTED_SCORE), 2),
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'\n Raw MKR TW Score: ',
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scales::label_comma()(floor(TIME_WEIGHTED_SCORE))
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),
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type = 'box') %>%
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layout(title = '\nDistribution of MKR Time Weighted Scoring',
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xaxis = list(title = 'Address Type'),
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yaxis = list(title = 'LOG(MKR TW Score)')
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)
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# merging and imputing current balance 0 to compare tw score and balance
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mkr_tw_bal <- merge(x = mkr_timeweighted[, c("ADDRESS","TIME_WEIGHTED_SCORE","ADDRESS_TYPE")],
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y = mkr_balances[,c("ADDRESS","NEW_VALUE")],
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all.x = TRUE, by = "ADDRESS")
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mkr_tw_bal$NEW_VALUE[is.na(mkr_tw_bal$NEW_VALUE)] <- 0
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plot_ly(mkr_tw_bal, x = ~log(NEW_VALUE), y = ~log(TIME_WEIGHTED_SCORE),
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color = ~ADDRESS_TYPE, type = 'scatter',
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hoverinfo = 'text',
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hovertext = ~paste0(
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'RAW-MKR Balance: ',
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scales::label_comma()(floor(NEW_VALUE)),
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'\n Raw MKR TW Score: ',
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scales::label_comma()(floor(TIME_WEIGHTED_SCORE))
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)
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) %>%
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layout(title = '\n Current MKR Balance vs Time-Weighted Score',
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xaxis = list(title = 'LOG(Current MKR Balance)'),
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yaxis = list(title = 'LOG(MKR TW Score)')
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)
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```
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