Many MakerDAO members came up to protect the decentralization principles, developing new standards for DAO governance.
Members of MakerDAO, the lending system that powers the Dai (DAI) stablecoin, have refused several proposals that would have seen the protocol’s governance structure become more centralized, representing a significant victory for decentralization.
The MakerDAO group came together on Monday to debate three ideas that would have changed the decentralized autonomous organization’s (DAO) leadership structure to resemble a conventional company, complete with a board of directors.
The ideas were developed as potential ways to boost the DAO’s effectiveness and its capacity to carry out “high-level choices.” Sam McPherson, the author of one of the ideas and a member of the MakerDAO Protocol Engineering Core Unit, tweeted his displeasure with the current system of government:
“The status quo is not working… The DAO is not currently set up to make high-level decisions which is leading to decision paralysis or less informed parties making sub-optimal calls.”
The first proposal, LOVE-001, was for setting up a new “oversight Core Unit.” In essence, this proposal called for the creation of a new unit that would “periodically audit the performance of other Core Units,” which is an excellent way of saying that a more centralized authority would have more ability to influence choices on new collateral.
To vote against the LOVE-001 motion, more than 60% of the 293,911 Maker (MKR)-delegated governance tokens were used.
The second proposal, “Makershire Hathaway,” would develop a $10 million special purpose fund to produce yield from the protocol’s stablecoin reserves, according to MakerDAO’s GitHub. Sixty-five percent of voters rejected Makershire Hathaway.
The third proposal, referred to as MIP75c3-SP1, called for establishing a discretionary fund controlled by a brand-new “Growth Task Force” to expand Maker “as rapidly as feasible.” The majority of MKR used to vote against this idea, or slightly over 76 percent, making it the most flatly denied proposition.
The three proposals seemed to have gotten people talking, as MakerDAO stated they had seen the most voting activity for governance to that moment.
An utterly decentralized type of governance may be strongly preferred by MakerDAO members, as evidenced by the rejection of these proposals and the record high election turnout, establishing an excellent precedent for other decentralized finance (DeFi) protocols.
The Maker process is operated by MakerDAO, which also issues DAI stablecoins connected to the US dollar in exchange for user deposits of ETH, wBTC, and approximately 30 other cryptocurrencies.
This month, MakerDAO took another massive step by declaring its intention to put some of its idle stablecoin holdings into conventional financial assets. MakerDao voted earlier this month to stop lending platform Aave from producing DAI for its loan pool without collateral as concerns about DeFi contagion expanded.
Maker’s governance token MKR is down almost 10% over the past week and is presently trading at $880, despite several significant advances for the DeFi technology.