One of the most renowned lending protocols in the world of decentralized finance (DeFi) is MakerDAO and it is recognized for its DAI stablecoin. The stablecoin has garnered a great deal of appreciation because of its over-collateralization, considering how other stablecoins have been struggling of late.
The MakerDAO community is not interested in creating a centralized body on the platform. A number of proposals were put forward for bringing some centralization in the governance structure of the protocol, but the members have chosen to reject them.
No centralization required
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Last Monday, a meeting was the members of the lending protocol got together for a meeting, as there were three proposals that were up for consideration. The proposals were meant to make changes to the leadership of MakerDAO’s decentralized autonomous organization (DAO). The goal was to introduce a structure that would be similar to those found in traditional corporations, all with a complete board of directors.
These proposals had been put forward as potential solutions in order to help the DAO enhance its efficiency and to enable it to make good and solid decisions. Sam McPherson was one of the people who developed a proposal and he is part of the Engineering Core Unit of the MakerDAO protocol. According to McPherson, the current governance model of the protocol is not very efficient.
The announcement stated that the existing status quo was not very efficient, as high-level decisions could not be made in the current setup of the DAO. This had led to decision paralysis or poor decision-making from less-informed parties.
LOVE-001 is one of the proposals that had been put forward for consideration. The demands of this proposal involve setting up an ‘oversight Core Unit’. Passing this proposal would have meant that the new unit would have the authority of auditing the activities of other critical units, which would provide it with centralized authority.
More than 60% of the members chose to reject this particular proposal. The other proposals were MIP75c3 and Makershire Hathaway and they were also rejected. The former was the one that got the most rejection votes, as almost 76% of the governance tokens voted against it. The proposal was about setting up a fund that would be used for making MakerDAO the fastest protocol out there.
Decentralization it is
It appears that the three proposals managed to stir up a lot of activity in the MakerDAO protocol, as the largest number of governance tokens participated in the voting process. The overwhelming number of votes made it apparent that the MakerDAO community is not interested in centralization and would prefer to keep the set up decentralized.
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After all, MakerDAO is one of the oldest lending networks that was founded in the decentralized finance (DeFi) ecosystem and it is its decentralization that earned it a lot of popularity, along with its DAI stablecoin. The latter seems to be faring much better than the other stablecoins, particularly after the TerraUSD (UST) stablecoin fiasco in the market.