MakerDAO, the decentralized autonomous organization (DAO) governing the stablecoin DAI, has adopted a proposed new “constitution” to regulate the governance process and prevent hostile actors from taking over the protocol. .
#MakerDAO Formalize governance with new ‘constitution’ #difficult stable currency https://t.co/28jluSf2nE
— Kyptos (@azcoinnews) March 28, 2023
According to the proposal’s official forum page, the constitution is necessary because the Maker protocol “depends on the governance decisions of people and institutions holding MKR tokens,” which could lead to failure of the platform, the Maker protocol, or loss of user funds.
The Maker Constitution aims to influence “alignment projects” to “lock in the core commitments of the community,” the document says. The governance document creates several types of actors with different powers and responsibilities. For example, Constitutional Defenders (CCs) have a mission to “promote and protect the Maker governance process” by ensuring that other actors abide by the Constitution.
A CC can be a Constitutional Election Commission Member (CVCM) or a Constitutional Delegate (CD). CVCM drafts documents for voter review, and CDs run smart contracts that allow MKR holders to delegate tokens without losing custody. This approach is intended to prevent one or a few large holders from dominating the voting process, making decisions that may not be in the best interest of the Maker community as a whole.
Maker Protocol is a decentralized finance (DeFi) platform that allows users to create DAI, a stablecoin pegged to the U.S. dollar. DAI is backed by collateral held in smart contracts on the Ethereum blockchain. The value of DAI is stabilized through an incentive and penalty system that incentivizes users to maintain the value of the collateral they deposit.
Maker Protocol has experienced many challenges in the past, including the “Black Thursday” event in March 2020, when the price of Ethereum plummeted, resulting in a large loss of collateral and a drop in the value of DAI. . The Maker community has been working to address these challenges and strengthen the protocol’s governance processes.
The adoption of the Maker Charter is an important step towards these goals. By standardizing the governance process and preventing hostile actors from taking over the protocol, MakerDAO is working to create a more stable and secure DeFi platform.
At press time, the protocol’s native token MKR is currently trading at $638.9, up 2.5% on the day. The token rallied more than 10% from a low of $627 to a high of $692 before falling back to current levels.
Source: TradingView
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board pass
according to Kyptos
