During the next couple of months, MakerDAO intends to finish its roadmap toward decentralised governance by dissolving its foundation.
In a recent announcement, MakerDAO, the pioneering decentralised financial system, revealed that its foundation will be formally dissolved in the coming months, marking the completion of one of the final steps on the protocol’s route to decentralised governance.
The decentralised autonomous organisation, or DAO, of Maker sees itself as being “fully self-sufficient” — with its globally distributed community “now responsible for every aspect of the Maker protocol.” according to a blog post published on July 20.
“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 piece’s author, Maker Foundation CEO, Rune Christensen, recounts highlights from the project’s six-year journey. Christensen initially unveiled his ambitions for an Ethereum-backed stable coin dubbed “eDollar” in a Reddit post in March 2015, and the project has been in development ever since.
The Maker Foundation, a non-profit organisation entrusted with monitoring the project’s growth and finance, was established in September 2018 at the request of the project’s early backers, according to reports.
The Foundation was established with the purpose of dissolving it within two to three years; however, the decision sparked internal divisions between proponents of the Foundation and those who believed the legal body was in odds with cryptocurrency’s fundamentally anarchic character.
Maker, according to him, has “come a long way in a relatively short period of time,” having gone from being a pioneering young DAO to becoming a Foundation, and then back to being a DAO again.
According to Christensen, while the Foundation performed a distinct and significant function in the ongoing development of the Maker Protocol and the formation of a worldwide team, it was only intended to exist for a limited period of time in the first place.
Maker protocol performed a restricted release of ProtoSai in May 2017, more than two years after Christensen originally announced the protocol on Reddit. ProtoSai was the forerunner to Maker’s first stablecoin, SAI, also known as Single-Collateral Dai.
A wholesale release of SAI would take place in December of 2017 and the coin would circulate for nearly two years, with Maker introducing Multi-Collateral Dai (DAI) in November of 2019 — which would allow DAI to be minted against a variety of digital assets that had been approved by Maker governance.
Making its debut in March of this year, Maker would go on to establish itself as a pioneering DeFi protocol, ranking first in the sector in terms of total value locked.
However, the year 2020 would not be without its challenges, with users launching a class-action lawsuit against the Maker Foundation following the events of “Black Thursday” in March. Maker suffered a loss of around $6.64 million DAI as a result of cascade liquidations following the price of Ether plummeting by 50% in the span of approximately 24 hours.
Also in March 2020, the Maker Foundation would cede control of the MKR token contract to the community, thereby launching the project’s road toward re-establishing decentralised governance — with Christensen defining the foundation as “completely pointless.”
That same month, the protocol would also add support for Circle’s centralised stablecoin USDC, igniting debate about Maker’s support for centralised crypto assets as collateral for its putative decentralised stable token, which is backed by a centralised stablecoin.
Core Units were established in March of this year to provide management coordination across the protocol’s numerous teams and activities. In addition, the Maker DAO would get 84,000 MKR in development funds from the foundation in May, which was worth about $500 million at the time.
The MakerDAO decentralised finance protocol has a total value locked in at $5.62 billion, according to DeFi Llama, making it the sixth-ranked decentralised finance protocol.