Maker Foundation Hands Control of MKR Token Over to the Community

Maker DAI

Maker, the leading dApp to date in Ethereum’s rising decentralized finance sector, is now that much more decentralized.

On Wednesday, March 25th, the Maker Foundation — the non-profit organization that has served to steward the young MakerDAO project — announced it had completely transitioned control of the smart contract underpinning that project’s governance token, MKR, over to MKR holders.

“The transfer of MKR token control is, most importantly, the latest and most significant step yet toward complete system decentralization as the community embraces its larger, impending role in governing a self-sustaining DAO,” the Maker Foundation said.

Going forward then, MKR voters will be the only stakeholders able to make even minor modifications to the token’s contract, a dynamic that further solidifies these voters’ centrality in the wider Maker ecosystem.

Notably, the Maker Foundation transferred trademarks and other intellectual property around Maker and Dai, the dApp’s associated stablecoin, to the independent and Denmark-based Dai Foundation last December. That pivot came to protect the IP that couldn’t be readily decentralized on-chain. Expect more power transitions to come in the future, too.

“We will continue to ready the community for complete decentralization in the weeks and months ahead,” Maker Foundation CEO Rune Christensen said on Wednesday.

Moving Forward from Unprecedented Times

The U.S. stock market experienced a historic crash on March 12th, now dubbed “Black Thursday,” as the result of the global breakout of the COVID-19 coronavirus pandemic and the start of an oil price war between Saudi Arabia and Russia.

That sell-off spread to virtually all risk-on assets, including in the cryptoeconomy where Ethereum’s ether (ETH) tumbled some 50 percent intraday.

The major sell pressure led to a flurry of activity on Ethereum on that day, a significant portion of which was from investors retreating to stablecoins like Dai to flee the ETH sell-off. The quick price drop also led to a surge in the number of Maker users’ whose lending positions, the majority of which are collateralized by ETH, went underwater.

At that point, auctions should have closed out these positions in an orderly manner. But acutely high fees on Ethereum led to a window of anomalous Maker auction activity in which a bidder or bidders made off with some $4.5 million in ETH.

They did so essentially for free when the lending system was expecting an appropriate amount of Dai to be paid back in return, thus leaving the project with $4.5 million in protocol debt.

To pay off this debt, the Maker protocol minted new emergency MKR to be sold off for the first time ever, with associated auctions having kicked off on March 19th. Those sales appear to have completed on March 23th, upon which 4.3 million Dai had been raised to re-collateralize the lending system.

Accordingly, the episode saw the MakerDAO community successfully navigate its biggest crisis yet and the addition of Maker’s third approved collateral to date, the USDC stablecoin.

DeFi Saver Launches New Auction Dashboard

One takeaway that the Ethereum ecosystem honed in on after Maker’s Black Thursday experiences was that the lending project’s liquidation process could greatly benefit from being a lot more user friendly.

Toward that end, DeFi Saver, a “one-stop management solution” for DeFi projects, unveiled on March 25th a new, simple dashboard for participating in the liquidation of Maker positions that have sunk below a 150% collateralization ratio.

Hitherto, users have had to run a specialized script in order to make such liquidations, which meant non-technical folks were effectively blocked from the process. Now with DeFi Saver’s new auctions dashboard, though, users can join in on these Maker liquidations with only a web browser and an Ethereum wallet.

The post Maker Foundation Hands Control of MKR Token Over to the Community appeared first on Blockonomi.

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