MakerDAO members shoot down proposal for extra centralization

In a significant win for decentralization, members of MakerDAO, the lending protocol behind the Dai (DAI) stablecoin, have rejected a collection of proposals that will have seen the protocol’s governance construction grow to be extra centralized. 

On Monday, the members of MakerDAO confirmed as much as take into account three proposals that will have reorganized the management of the decentralized autonomous group (DAO) into one thing that extra carefully resembles a standard company, full with a board of administrators.

The proposals have been drafted as potential options for making the DAO extra environment friendly and extra able to executing “high-level choices.” Writer of one of many proposals and member of the MakerDAO Protocol Engineering Core Unit, Sam McPherson, voiced his frustration concerning the present governance mannequin, tweeting:

“The established order will not be working… The DAO will not be presently set as much as make high-level choices which is resulting in determination paralysis or much less knowledgeable events making sub-optimal calls.”

The primary proposal, referred to as LOVE-001, advised creating a brand new “oversight Core Unit.” Primarily, this proposal would have established a brand new unit that will “periodically audit the exercise of different Core Items” — a technical manner of claiming {that a} extra centralized authority could be able to exerting extra management over choices regarding new collateral.

Over 60% of the 293,911 Maker (MKR)-delegated governance tokens have been used to vote towards the LOVE-001 proposal.

In accordance with MakerDAO’s GitHub, the second proposal referred to as “Makershire Hathaway” would create a 10-million-dollar particular function fund designed to earn yield from the protocol’s stablecoin reserves. Makershire Hathaway was rejected by 65% of voters.

The third proposal, recognized solely as MIP75c3-SP1, advised the institution of a discretionary fund that will be overseen by a brand new “Development Job Power” that will purpose to develop Maker “as quick as doable.” This proposal obtained essentially the most unilateral rejection, with simply over 76% of MKR used to vote towards it.

The three proposals appeared to have stirred the pot, with MakerDAO noting that they witnessed the most important quantity of governance voting exercise to this point.

The rejection of those proposals mixed with the historic voter turnout signifies that MakerDAO members could strongly choose a correctly decentralized mannequin of governance, setting a powerful precedent for different decentralized finance (DeFi) protocols.

MakerDAO is the governing physique of the Maker protocol, which points United States dollar-pegged DAI stablecoins in alternate for person deposits of Ether (ETH), Wrapped Bitcoin (wBTC) and practically 30 different cryptocurrencies.

Associated: Lower than 1% of all holders have 90% of the voting energy in DAOs: Report

MakerDAO took one other main step this month, with the protocol signaling its intent to speculate a portion of its dormant stablecoin reserves into conventional monetary property. Earlier this month, as fears of DeFi contagion unfold, MakerDao voted to chop off lending platform Aave’s means to generate DAI for its lending pool with out collateral.

Regardless of the collection of essential developments for the DeFi protocol, Maker’s governance token MKR is down roughly 10% over the previous week, presently buying and selling for $880, in keeping with Cointelegraph Value Index.