MakerDAO passes new ‘constitution’ to formalize governance process

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Mak­er­DAO, the decen­tral­ized autonomous orga­ni­za­tion that gov­erns the Dai (DAI) sta­ble­coin, has passed a new pro­posed “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 proposal’s text, a con­sti­tu­tion is need­ed because the Mak­er Pro­to­col “relies on gov­er­nance deci­sions by humans and insti­tu­tions hold­ing MKR tokens,” which can “expose weak­ness­es and vul­ner­a­bil­i­ties that can result in the fail­ure of the Mak­er Pro­to­col or the loss of user funds.”

To avoid this fail­ure, the Mak­er Con­sti­tu­tion engages in “align­ment engi­neer­ing” to “lock in the core com­mit­ments” of Mak­er’s com­mu­ni­ty, the doc­u­ment said. 

The gov­ern­ing doc­u­ment cre­ates sev­er­al cat­e­gories of par­tic­i­pants with dif­fer­ent pow­ers and respon­si­bil­i­ties. For exam­ple, con­sti­tu­tion­al con­servers (CCs) have the job of “facil­i­tat­ing and pro­tect­ing the Mak­er Gov­er­nance process” by ensur­ing that the con­sti­tu­tion is fol­lowed by oth­er par­tic­i­pants. CCs can become con­sti­tu­tion­al vot­er com­mit­tee mem­bers (CVCMs) or con­sti­tu­tion­al del­e­gates (CDs).

CVCMs craft posi­tion doc­u­ments 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 keep USDC as pri­ma­ry collateral

Each office has pow­ers to remove list­ings of offi­cers from the app’s front end if they are believed to be vio­lat­ing the con­sti­tu­tion. For exam­ple, a CD can ban a CVC from the front end if the CVC is believed to be deceiv­ing the vot­ers who are del­e­gat­ing to it.

The Mak­er con­sti­tu­tion pro­pos­al passed with 76.04% of the MKR vote. Less than a quar­ter (23.95%) of MKR votes went against the pro­pos­al, and 0.01% abstained.

Despite the vote in its favor, some Mak­er users have open­ly crit­i­cized the con­sti­tu­tion as being author­i­tar­i­an. For exam­ple, the pseu­do­ny­mous Twit­ter user Paper­Imperi­um has claimed that it forces users to be “muz­zled and for­bid­den from com­mu­ni­cat­ing with any­one at or around Mak­er about Mak­er” due to restric­tions it impos­es on com­mu­ni­ca­tions from con­sti­tu­tion­al delegates.

Mak­er’s con­sti­tu­tion is one step in the process of cre­at­ing what Mak­er founder Rune Chris­tensen called the “Endgame Plan” for the pro­to­col, which he believes will con­vert Mak­er­DAO into a decen­tral­ized orga­ni­za­tion that keeps DAI sta­ble as it poten­tial­ly becomes the reserve cur­ren­cy for the world. End Game has been crit­i­cized by Andreessen Horowitz for doing too much too fast: the ven­ture cap­i­tal firm sup­ports chang­ing the pro­to­col in a more piece­meal fashion.

DAI is an algo­rith­mic sta­ble­coin pegged to the U.S. Dol­lar. It tem­porar­i­ly lost its peg on March 11 due to fall­out from a bank­ing pan­ic in the U.S., but then recov­ered it after Mak­er­DAO passed emer­gency mea­sures to lim­it the abil­i­ty of users to mint DAI with USD Coin (USDC).



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