MakerDAO which is a Decentralized Autonomous Organization (DAO) that governs the DAI Stablecoin has passed a new “constitution” for formalizing the governance processes and preventing hostile persons to take over the protocol.
The MakerDAO‘s proposal read that “a new constitution is needed as the Maker protocol presently relies on governance decisions made by humans and institutions who hold MKR tokens. As a result, it exposes the weaknesses and vulnerabilities of the Maker Protocol or the potential loss to the user funds.” Thus, to avoid such failure the MakerDAO team has engaged itself in aligning engineering to lock the core commitments of the Maker’s community.
The document created several categories of participants with distinct powers assigned to them. Such as constitutional conserves (CCs) were assigned the role of facilitating and protecting the Maker Governance process. Alongside, each office has been assigned the power to remove listings of officers from the App’s front end if they are found violating the constitution. The new proposal with such terms was passed with 76.04% of the MKR vote.
The new constitution is considered a crucial step in the process of creating an “ Endgame Plan” for the protocol. Rune Christensen, the founder of MakerDAO believes Endgame Plan will convert MakerDAO into a decentralized organization responsible for keeping DAI stable. DAI is an algorithmic stablecoin that is pegged to the US dollar. However, it temporarily lost its peg due to the collapse of banks in the US. Little later, it recovered its value after passing emergency measures to limit the users’ ability to mint DAI with USD coins.
However, the “Endgame plan” has been criticized by A16z for acting too fast and with VC firms supporting changing protocol through piecemeal fashion.