The MakerDAO DeFi platform community rejected the proposal to create an advisory council on lending. In the vote on the initiative, more than 30% of the circulating MKR supply participated.
The proposal MIP39c2-SP33 envisaged creating the ‘Lending Oversight Core Unit’ (LOVE-001). Its author was Luca Prosperi — head of MakerDAO’s relevant department.
“The unit would contribute to the platform’s development, developing forward-looking frameworks for a system of checks and balances, acting as an additional line of defence and helping to educate the community,” the publication says.
According to Prosperi, LOVE-001 could become a coordination hub MakerDAO and bolster the platform’s resilience. It was also envisaged that the unit would advise the DAO on complex issues.
Earlier, the initiative was commented on by Derek Flossman, head of MakerDAO’s Protocols Development Department. He noted that the community needs to decide which path of development the platform will take.
MakerDAO needs to decide whether its purpose is to run a decentralised & de-risked credit facility or an investment vehicle to maximise profit…
— Derek (@DerekFlossman) June 25, 2022
“MakerDAO must decide whether its aim is decentralised and risk-free lending or an investment mechanism aimed at profit maximisation. … The strength of the DAO is not in efficiency; its strength lies in resilience,” wrote Flossman.
According to him, adopting the proposal could have created additional risks, including centralisation of power and regulatory issues for individual members of the community.
GFX Labs analysts said that proponents of the initiative were mainly venture capitalists and trading firms. They emphasised that the outcome of the vote was decided in the last two hours due to redelegation of votes.
MakerDao governance allows new votes to enter the system and redelegations to occur during votes. MKR holders on each side exercised that ability in the last minutes of voting to attempt to achieve their desired outcome. Ultimately, the individuals who hold MKR control the votes.
— GFX Labs (@labsGFX) June 27, 2022
GFX Labs also noted that participants actively borrowed MKR on Aave. This led to a spike in interest rates in the lending protocol.
Prosperi noted that a large number of MKR were contributed via «shadow delegation» and proxy voting, and the platform’s founder Rune Christensen did not back the proposal.
2/4 🧵 Worth noting:
Insane active VC participation
Founder re-centralising vote in Shadow Delegate
Previously ostracised co-founder resurrected -> his comeback message is a bliss
Tons of proxy voting
Concerted parties (borrowers too)
Last-minute re-delegation$MKR borrows pic.twitter.com/J4kANE4q9G
— Luca Prosperi (@LucaProsperi) June 27, 2022
Rune Christensen himself said that experiments with MakerDAO’s structure are not suited for the core of the protocol.
This governance battle was a big win for voter turnout. The Growth Task Force’s initiative is a good thing that helped bring governance to life. But voters have made it clear experiments with hierarchy and multisignatures aren’t suited for the core of the maker protocol. https://t.co/UIyZTPhvoZ
— Rune (@RuneKek) June 27, 2022
«This governance battle was a big win for voter turnout. The Growth Task Force’s initiative is a good thing that helped bring governance to life. But voters have made it clear that experiments with hierarchy and multisignatures aren’t suited for the core of the protocol», wrote he.
Earlier in March 2022, the MonetSupply team proposed a change to the governance and staking model using stkMKR tokens.
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