Posted inNews

MakerDAO passes new ‘constitution’ to formalize governance process

March 27, 2023No Comments


MakerDAO, the decentralized autonomous organization that governs Dai (ICD) stable currency, has approved a proposed new “constitution” intended to formalize governance processes and help prevent hostile actors from taking over the protocol, according to the official forum page for the proposal.

According to the text of the proposal, a constitution is necessary because the Maker Protocol "relies on governance decisions by humans and institutions holding MKR tokens," which may "expose weaknesses and vulnerabilities that may result in the failure of the Maker Protocol or loss of user funds."

To avoid this failure, the Maker Constitution engages in "alignment engineering" to "lock down core commitments" from the Maker community, the document says.

The governing document creates several categories of participants with different powers and responsibilities. For example, Constitutional Conservatives (CCs) have the job of "facilitating and protecting the Governance Maker process" by ensuring that other participants follow the constitution. CCs can become members of the constitutional voting committee (CVCM) or constitutional delegates (CD).

CVCMs produce position papers for voters to consider, and CDs operate smart contracts that allow MKR holders to delegate their MKR without losing custody of their tokens.

Related: MakerDAO votes to retain USDC as primary collateral

Each office has powers to remove officer lists from the app interface if they are believed to be in violation of the constitution. For example, a CD may ban a CVC from the outset if the CVC is believed to be misleading the voters they are delegating to.

Maker's proposed constitution was approved with 76.04% of the MKR vote. Less than a quarter (23.95%) of the MKR votes were against the proposal and 0.01% abstained.

Despite the vote in favor of it, some Maker users have openly criticized the constitution for being authoritarian. For example, pseudonymous Twitter user PaperImperium has claimed that it forces users to be "gagged and prohibited from communicating with anyone in or around Maker about Maker" due to the restrictions it places on communications from constitutional delegates.

The Maker constitution is one step in the process of creating what Maker founder Rune Christensen called the “Final Plan” for the protocol, which he believes will turn MakerDAO into a decentralized organization that keeps DAI stable as it potentially becomes the reserve currency for the world. game over has been criticized By Andreessen Horowitz for doing too much too fast: The VC firm supports changing the protocol in a more gradual manner.

DAI is an algorithmic stablecoin pegged to the US dollar. He temporarily lost its plug on March 11 due to the fallout from a US bank run, but later picked it up after MakerDAO approved emergency measures to limit the ability of users to mint DAI with USD Coin (USDC).