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MakerDAO approves 'Constitution' and moves forward with 'Endgame' plans

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Indrani Bose Follow

INDIA

Mar, 29 2023

Mar, 29 2023

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MakerDAO, the autonomous organization responsible for Dai (DAI) stablecoin, recently passed new proposed guiding principles called “Constitution,”. This would formalize governance processes and assist in preventing hostile players from taking over the protocol according to the proposal's forum page. This document outlines how Maker, a $7 billion lending platform, will operate and make decisions in the future.


A constitution is needed, according to the proposal. Since the Maker Protocol relies on human and institutional governance decisions, it can lead to vulnerabilities and weaknesses which can lead to the Maker Protocol failing or user funds being lost. The Maker Constitution uses "alignment engineering" to "lock in the essential commitments" of the Maker community.


A portion of Maker's over $7 billion reserves will be invested in real-world assets and money-market funds as part of the plan. This also seeks to increase platform revenues and decentralize the backing of DAI stablecoin to make it more resistant to censorship and penalties.


Several classes of members, each with specific authority and duties, are established by the governing instrument. Constitutional conservators (CCs) are responsible for "facilitating and protecting the Maker Governance process" through policing compliance with the guiding document. CCs have the option of serving as CVCMs or delegates in the Constitutional Convention (CDs).


CDs run smart contracts that permit MKR holders to delegate their MKR without losing control of their tokens, and CVCMs create position documents for voters to examine.


App users may have their officers removed if their office believes they are violating the constitution. If a CD determines that a CVC is misleading voters into giving it delegations, for instance, the CD may prohibit that CVC from receiving delegations in the first place.


By 76.04% of the MKR vote, the Maker constitution proposal was approved. The percentage of MKRs who voted no on the proposal was under 25%, while only 0.01% didn't vote at all.


DAI is a stablecoin that is algorithmically backed by the dollar. As a result of the March 11 banking panic in the United States, MakerDAO had to take emergency measures to restrict users' ability to mint DAI using USD Coin, however, the token quickly regained its value.


Its $5.3 billion stablecoin Maker DAI, is backed by digital assets from borrowers, as well as by real-world assets from banks and other financial institutions. MakerDAO, a decentralized autonomous organization (DAO), manages the platform through proposals, community discussions, and votes.


With Christensen's help, Maker has been working on a huge makeover called "Endgame". The mission is to fundamentally alter MakerDAO's operation.


The idea proposed for the DAO to be split into smaller, autonomous units called SubDAOs, each of which are self-governing and self-sustaining entities that would have its own token inside the MakerDAO ecosystem.


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Indrani Bose

CBW - External Analyst

INDIA

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