MakerDAO dissolves foundation and returns really decentralized

The pioneering decentralized financial protocol MakerDAO has announced that its platform will be officially closed in the coming months, marking one of the final milestones in the protocol’s decentralized governance roadmap.

A blog post from July 20 describes Maker’s decentralized autonomous organization, or DAO, as “completely self-sufficient” – with a globally distributed community that “is now responsible for all aspects of the Maker Protocol”.

“The complete decentralization of Maker means that the future development and operation of the protocol and DAO will be determined by thousands or maybe millions of dedicated, enthusiastic community members, all determined to take advantage of digital currency for everyone worldwide. “

Post author, Maker Foundation CEO Rune Christensen, shares the highlights of the project’s six-year journey, with Christensen revealing his plans for the first time in an in-depth Reddit post in 2015.

The Maker Foundation was set up in September 2018 as a non-profit to oversee the development and funding of the project, ostensibly at the behest of the original investors. While Christensen set up the foundation with the intention of dissolving it within two to three years, the move catalyzed internal tensions between the foundation’s supporters and those who saw the legal entity at odds with its anarchist nature.

He describes Maker as “having come a long way in a relatively short time”, transforming from a pioneering young DAO into an organization and then back to the DAO.

“Although the foundation plays a specific and important role in the further development of the Maker Protocol and the growth of a global team, it is designed for a limited period of time,” emphasized Christensen.

In May 2017, more than two years after Christensen revealed Maker on Reddit, minutes continued with a limited release of ProtoSai – a precursor to Maker’s first stablecoin, SAI, or single-collateral Dai.

SAI will be issued in bulk in December 2017 and circulated for nearly two years, with Maker introducing multi-collateralized Dai (DAI) in November 2019, which allows DAI to be minted against a variety of digital assets approved by the Maker Board of Directors .

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While Maker will emerge as the groundbreaking DeFi protocol topping the industry charts by total locked-in value, 2020 didn’t go entirely smoothly for Maker as users filed class actions against the backdrop after March’s “Black Thursday”. The crash caused Maker to lose around $ 6.64 million in DAI through cascading liquidations after the price of Ether fell 50% in about 24 hours.

In March 2020, the Maker Foundation will also switch the MKR token contract to community governance, which marks the beginning of the project’s journey to restore decentralized governance – with Christensen describing the platform as “completely meaningless”.

The protocol will also add support for Circle’s USDC centralized stablecoin this month, causing controversy over Makers’ support for centralized crypto assets as collateral for unstable stablecoins.

In March this year, a “core unit” was created to coordinate management across various groups and operations of the protocol. The fund will also return 84,000 MKR development funds to Maker DAO in May, which was worth nearly $ 500 million at the time.

MakerDAO is currently the sixth tier most decentralized financial protocol, with a total key value of $ 5.62 billion, according to DeFi Llama.