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MakerDAO approves new constitution to formalise governance processes and secure DAI stablecoin

The proposal for the MakerDAO constitution was approved with 76.04 percent of the MKR vote in favour, while 23.95 percent voted against it, and 0.01 percent abstained

Shashank Bhardwaj
Published: Mar 30, 2023 01:12:39 PM IST

MakerDAO approves new constitution to formalise governance processes and secure DAI stablecoinImage: Shutterstock

According to the official forum page of MakerDAO, the decentralised autonomous organisation responsible for governing the DAI stablecoin, a new proposed "constitution" has been approved. The purpose of this constitution is to establish formal governance processes and prevent hostile individuals from taking control of the protocol.

The proposal for a MakerDAO constitution states that such a document is necessary because the Maker Protocol relies on human and institutional decisions involving MKR tokens, which could lead to weaknesses and vulnerabilities that could result in the loss of user funds or the failure of the protocol. To prevent this, the constitution aims to use "alignment engineering" to establish and secure the core commitments of the Maker community.

The MakerDAO constitution divides participants into various categories with distinct duties and authorities. One of these categories is "constitutional conservers" (CCs), whose responsibility is to supervise and safeguard the process of Maker Governance by ensuring that the constitution is followed by other participants. CCs can become either "constitutional voter committee members" (CVCMs) or "constitutional delegates" (CDs).

CVCMs create position papers for voters to review, and CDs manage smart contracts that enable MKR token holders to delegate their MKR without giving up control of their tokens.

Each position within the MakerDAO constitution has the authority to remove officers' listings from the app's front-end if they are suspected of violating the constitution. If a "constitutional delegate" (CD) believes that a "constitutional voter committee" (CVC) is deceiving voters who have delegated to it, the CD can remove the CVC from the app's front-end.

The proposal for the MakerDAO constitution was approved with 76.04 percent of the MKR vote in favour, while 23.95 percent voted against it, and 0.01 percent abstained. Despite the majority vote, some users have expressed their criticism of the constitution, claiming that it is authoritarian.

One pseudonymous user on Twitter, PaperImperium, has stated that it imposes limitations on communication from constitutional delegates, which forces users to be "muzzled and forbidden from talking to anyone at or around Maker about Maker."

According to Maker founder Rune Christensen, the creation of a constitution for Maker is a part of the "Endgame Plan" to transform the protocol into a decentralised organisation that will maintain DAI's stability and potentially become the world's reserve currency.

However, A16z has criticised the endgame plan for attempting to do too much too quickly. The venture capital firm recommends implementing changes to the protocol in a more gradual and incremental manner.

The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash

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