[Part 2] Talk About MakerDAO’s Controversial Governance Vote

Please read Part 1 before reading this analysis. In this section, we will present MakerDAO’s Governance landing page.

Events About MakerDAO’s Governance

After a series of events above, we have somewhat grasped the context of MakerDAO’s management drama. The relationship of some individuals working in the same company but in different departments has had opposites of thinking. The event has been rekindled for a long time and it has been amplified by the transparency of the blockchain. 

Rune Uses A Self-Authorization Screen To Vote Against LOVE

First, Luca thinks that the CEO of Maker-Rune has authorized himself to vote. MakerDAO has a voting authorization mechanism, which will help holders of large amounts of MKR who do not need to participate in governance but can contribute their votes to a reputable independent party to decide for them. 

Specifically, Luca said that Rune used 39,000 MKR himself and sent it to an authorized party, the Shadow Delegate (created by him) to vote against the LOVE project (the agency that oversees MakerDAO’s activities with partners from TradeFi). 

Major Funds Voice Their Support For LOVE

One of the other proxies belonging to funds such as a16z (via Porter Smith), Kevin Miao (Block Tower) and Kianga Daverington (a delegator) have voiced their support for the proposal.

Comments “Insinuated” Against Luca

However, at this time, the focus of the story is on the governance section on Discord of MakerDAO when an anonymous person commented on the “engagement” of investment funds (VCs) to help the LOVE proposal win. . This person believes that there will be tacit agreements by the foundations to hire LOVE employees.

Luca also responded with a comment expressing the opposition that the proposal could be influenced to fail by large MKR holders. At the same time, employees working for LOVE can also be fired by these same people  ⇒ I mean Rune and the others. 

Some sharks who own a large amount of MKR also voted ” Yes “, he knows the characters behind these votes and does not reveal their identities. The purpose is to protect as well as respect their privacy. Since he knew who the supporters of LOVE were, he called to confirm and discuss the pros and cons of this proposal. 

Nikolai’s Return To The Belief That Brings Justice

MakerDAO co-founder Nikolai is back, last time he had a disagreement with Rune. This time, he returned also for some personal reasons, according to Luca, with about 22,000 MKR holdings, Nikolai can be the turning point of any poll on MakerDAO. 

At the same time, LOVE also carries some of the meanings that Nikolai really wanted Maker to do. That is decentralization to the fullest extent, Nikolai once wanted DeFi, specifically brought by Maker’s stablecoin, to be like the public internet. Here, no one can control the dynamics of the market and a competitive environment to promote it. 

⇒ He left also because of the failure of MakerDAO to his wishes.  

He appeared also partly because MakerDAO’s voting mechanism was still flawed when there was a wallet that borrowed more than 9,000 DAI on Aave to use for voting “disagree” on many different proposals, making the final result. affected. Although there was a proposal for the launch of “stkMKR” to help combat this situation, it was not successful. 

Nikolai also believes that it is valid for an individual to borrow MKR to vote but is an inherently ineffective strategy. This action also leaves some recorded traces of the wallet itself on-chain. 

For example: When this wallet borrows 9,000 MKR, the borrowing interest rate on MKR’s Aave has reached 60-70% APY and they will bear that large interest rate. 

Back to Nikolai’s vote in favour of LOVE, this loan also influenced LOVE’s poll. Therefore, Nikolai also wanted to balance this asymmetry. Soon, some other sharks also voted “yes”, however, Nikolai had to withdraw 5,000 MKR for security reasons. 

On June 27, 2022, out of a total of 200,000 MKR, the percentage of “yes” votes is losing, Nikolai wrote a few lines of thoughts with strong and somewhat vulgar language (this proposal is in stealth mode). because words affect the community). 

Nikolai’s point is that DAI’s governance model has long been without proper promotion and compatibility, but only a compromise in terms of interests between parties whose votes are not enough to manipulate the outcome of the decisions. the vote. 

Nikolai just told everyone to “give him and Rune a fair mortgage environment with the right incentives to see who wins” .

This sentence implies that Rune (current CEO) can only win based on manipulation and Nikolai clearly expressed his confidence that he can win with transparency, in an environment without compromise, equal.

At the same time, he is mocking Rune that the proposal of organizations related to Rune also cannot pass the risk assessments of the internal agency MakerDAO. 

⇒ Indicates a major rift in the relationship and the opposing views of the two MakerDAO founders. 

The Decision Is Entitled “Re-Authorization To Vote”

In the last moments before closing the voting poll, the proxy votes were changed. In MakerDAO’s voting authorization system, before the poll closes, the proxy vote change is still valid. If you look at the picture below, you will see 4 authorized representatives vote: FlipFlopFlap, Hasu, ACRE and Schuppi. 

Two of them, FlipFlopFlap (FFF) and Schuppi decided to change the ballot at the last minute. Initially, the FFF voted yes, then neutral but the FFF changed at the last minute and voted against LOVE. Schuppi did the same, voting neutral at the beginning and voting against at the end. 

At the end of the vote, the result of allowing the implementation of Lending Oversight was 177,000 MKR “voted against” compared to 113,000 MKR “Yes”. This means Luca Prosperi has lost, more deeply, the MakerDAO community has lost to the “concentration” of a powerful group of this protocol. 

Verdict

Part 3 will present the opposing mindsets of the two MakerDAO founders

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