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MakerDAO intends to dissolve its foundation in the coming months, completing its roadmap to decentralised governance.
MakerDAO, the first decentralised finance protocol, has announced that its foundation will formally dissolve in the coming months, marking one of the protocol’s final steps towards decentralised governance.
A July 20 blog post describes Maker’s decentralized autonomous organization, or DAO, as now being “fully self-sufficient” — with its globally distributed community “now responsible for every aspect of the Maker protocol.”
“Complete decentralization of Maker means that future development and operation of the Protocol and the DAO will be determined by thousands or perhaps millions of engaged, enthusiastic community members, all determined to extend the benefits of digital currency to people across the globe.”
The post’s author, Maker Foundation CEO, Rune Christensen recounts highlights from the project’s six-year journey, with Christensen having first revealed his plans in a Reddit post detailing his vision for an Ethereum-back stable token dubbed “eDollar” during March 2015.
The Maker Foundation was created as a non-profit tasked with overseeing the project’s development and funding in September 2018, reportedly at the behest of its early investors. While Christensen created the Foundation with the intention of dissolving it within two to three years, the move catalyzed internal tensions between supporters of the Foundation and those who saw the legal entity as at odds with crypto’s fundamentally anarchic ethos.
He describes Maker as having “come a long way in a relatively short period,” transitioning from a pioneering fledgling DAO, into a Foundation, and back to a DAO again.
“While the Foundation played a specific and important role in the further development of the Maker Protocol and the growth of a global team, it was designed to exist only temporarily,” emphasized Christensen.
Maker staged a restricted release of ProtoSai — the forerunner of Maker’s first stablecoin, SAI, or Single-Collateral Dai — in May 2017, more than two years after Christensen revealed Maker on Reddit.
Maker would introduce Multi-Collateral Dai (DAI) in November of 2019 — allowing DAI to be minted against a variety of digital assets approved by Maker governance. SAI would see a wholesale release in December of 2017 and circulate for nearly two years, with Maker introducing Multi-Collateral Dai (DAI) in November of 2019 — allowing DAI to be minted against a variety of digital assets approved by Maker governance.
While Maker would go on to become a pioneering DeFi protocol that ranked first in the sector by total value locked, the year 2020 was not without its challenges, with users filing a class-action lawsuit against the foundation in the aftermath of “Black Thursday” in March. Maker suffered a $6.64 million DAI loss due to cascade liquidations after the price of Ether dropped 50% in less than 24 hours.
The Maker Foundation would also transfer the MKR token contract to community governance in March 2020, signalling the start of the project’s path back to decentralised governance — with Christensen dismissing the foundation as “totally worthless.”
That month, the protocol will add support for Circle’s centralised stablecoin USDC, igniting debate over Maker’s use of centralised crypto assets as collateral for its ostensibly decentralised stable currency.
“Core Units” were established in March of this year to coordinate administration across the protocol’s numerous teams and activities. In May, the foundation would return to the Maker DAO 84,000 MKR in development funds, which were valued approximately $500 million at the time.
MakerDAO is presently the sixth-ranked decentralised finance system, according to DeFi Llama, with a total value locked of $5.62 billion.