MakerDAO’s (MKR) Endgame proposal was overwhelmingly handed by the group, with round 80% of the votes in help.
The endgame proposal
The proposal was submitted by MakerDAO founder Rune Christensen and targeted on breaking the decentralized protocol into smaller items referred to as MetaDAOs which might be extra decentralized.
With over $8 billion in property in its reserves, MakerDAO is the largest DeFi protocol. Nonetheless, the founder believes its measurement impacts decentralization, effectivity, and censorship resistance. Therefore the transfer to interrupt it down.
A part of Christensen’s proposal proposes a 25% restrict on the Actual World Belongings backing the DAO. He additionally referred to as for the introduction of unfavorable charges.
In line with the proposal, every MetaDAO could have its token and freedom to pursue any profit-generating enterprises. As well as, DAI holders may yield farm the brand new tokens as it’s linked to the DAI ecosystem.
The proposal’s passage will change the present Strategic Core Models construction that MakerDAO makes use of. As an alternative, impartial clusters would emerge that might make their choices individually.
The group supported Coinbase’s proposal to maneuver Maker’s $1.6 billion USDC reserve to its Coinbase Prime. That is an try and generate additional income from the reserves, as there could be a 1.5% yield on the property.
One other $500 million could be transferred from the reserves to crypto dealer Monetalis and hedge fund Appaloosa who would then lend it to Coinbase at an anticipated annual return of 4.5% to six%.
The group additionally voted in help of making a vault for Lido ETH staking spinoff stETH. This transfer will diversify MakerDAO’s stablecoin DAI reserves and cut back its reliance on USDC.
In the meantime, the endgame proposal doesn’t benefit from the backing of key traders within the protocol like Andreessen Horowitz. The enterprise capital agency stated:
“The Core Unit construction is arguably already legally decentralized. Introducing MetaDAOs doubtless doesn’t change this evaluation, nor result in extra organizational resiliency from a strictly authorized perspective.”
Neighborhood criticizes proposal
Nonetheless, some consultants have criticized the voting, saying it isn’t as decentralized because it appears.
Sébastien Derivaux, the Head of Asset Legal responsibility Administration at MakerDAO, claims that Rune alone represents 63% of the 122 addresses that voted and has financial affect over 74%. So, solely 6% of those that voted in help weren’t underneath the founder’s affect.
The Endgame, proposed by Rune, has handed the MakerDAO governance vote. Whereas 122 individuals have voted, just one issues as he signify 63% of the turnover and 74% if we use affect.#decentralization
1/n 🧵 pic.twitter.com/lbF8sO8pGU— Sébastien Derivaux (@SebVentures) October 25, 2022
A number of others additionally criticized the preliminary proposal. The CEO of Rari Capital, Jay Bhavani, referred to as it “unnecessarily advanced and over-optimizing for a lot of issues.”
The Head of governance at LBS Blockchain Society Park Y additionally defined why they voted towards the proposal. In line with the entity, it opposed it as a consequence of a number of causes.
These embrace the dearth of consensus in MakerDAO relating to its overriding goal and the trade-off of the value stability of DAI. Different causes included that MetaDAO wouldn’t voters’ apathy, and the Endgame plan was not the one strategy to make MakerDAO extra environment friendly.
