Who runs the MakerDAO Foundation?
Questions over an ongoing board shakeup flamed tensions Tuesday during a weekly community call, with participants asking pointed questions about who controls a $190 million pot of MakerDAO governance tokens.
Stepping back, the MakerDAO Ecosystem Growth Foundation, or MakerDAO Foundation for short, is a non-profit entity that launched the dollar-pegged stablecoin DAI back in December 2017 along with a programmatic loan system to keep the value of DAI stable.
As stated in a recent blog post, the foundation “is tasked with bootstrapping the system to ensure that it can survive as a fully decentralized organization.” There are nine board members who oversee development funds for the network, which account for roughly 27 percent of all MakerDAO governance tokens in existence.
The identities of those nine board members have never been disclosed.
In another blog post, the foundation announced Monday that its board would be reconstituted to not only include “technical members” but “a decentralized community of stakeholders.”
"We think it would be better to have more industry professionals with deeper business experience sitting on the board," MakerDAO Foundation general counsel Brian Avello told CoinDesk.
During yesterday's community call, Avello faced some tough questions about the nature of the foundation's organizational structure – the most pointed of which came from a former legal advisor to the MakerDAO Foundation itself, Chris Padovano.
Padovano asked when the bylaws of the foundation would be publicized, whether correspondence from board members could be released and if the foundation's proprietary trading desk is a for-profit initiative.
No concrete answers were given by Avello. When pressed specifically about board member correspondence, Avello responded to Padovano curtly (and in the third person):
When asked about why there was a need to remove certain individuals from the board, Avello admitted he was not at liberty to discuss such matters on a public call. To this, MakerDAO Foundation head of communications Mike Porcaro told CoinDesk after the call that the lack of full transparency here was "pretty traditional for most organizations" and that "in many cases, there are requirements based on employment law about what you can and cannot discuss."
On the matter of board member identities, Avello did explain during the call that the specific reasoning for not disclosing information was for security reasons. Publicizing the identities of people who sign off on transactions from the multi-signatory developer fund would be a “security risk,” Avello said.
'Tensions are high'
"Guys, I really do have to do a lot of work today [but] I'm more than happy to come back," said Avello when asked by call participants if he could stay on to answer further questions about the foundation's board and its finances.
MakerDAO Foundation core community lead David Utrobin agreed it would be best to continue the Q&A session during next week's meeting.
The heated discussion comes as MakerDAO stakeholders face another decision to increase DAI's "stability fee."
Expected to end sometime on Thursday, a 4 percent increase to fees currently looks to be the most popular among MakerDAO governance token holders – with over 50,000 MakerDAO governance tokens currently staked in favor.
Having upped fees a total of four times in the past three months, head of community development Richard Brown said during Tuesday's call that he was "reasonably sure" such increases would continue until the DAI-to-U.S. dollar peg returns to parity.
"It feels like the idea now is that every single week on Monday a poll goes out with a default range [to increase the stability fee] and then we collect the community sentiment and then we have an executive [vote] on Friday," said Brown.
The final results of this week's community vote will be discussed during a scientific governance and risk meeting on Thursday. Members of the MakerDAO risk team are expected to also share during this meeting a detailed analysis of current DAI-to-USD trends.
David Utrobin, core community lead at MakerDao, image via YouTube
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.