The community had originally voted in favor of compensation, but the final tally showed a different outcome.
About 52,500 MKR voted against any compensation, which accounted for 65% of the total votes. This amounts to about 8% of the total MKR supply, which some commentators took as a sign of low turnout.
Nevertheless, Maker community member monetsupply, who was part of the working group designing the compensation proposal, told Cointelegraph that this was “fairly high for a poll vote.” He said that polls normally get commitments of less than 40,000 tokens.
The results of the vote were somewhat surprising as a similar poll held just three weeks after the crash had the opposite result — 65,000 MKR amounting to 65% of votes expressed favorably for compensation.
While another poll with lower participation had a negative result, the working group was still motivated to continue due to the first poll.
Monetsupply cited three main reasons why, according to them, the vote has failed. The first is a matter of principle — should the vault holders be compensated at all. “Good arguments could be made for or against,” they said.
The discussion can be boiled down to two lines of thought: one maintains that even if it was not a technical hack, the system still worked imperfectly and the risks were not properly disclosed — so the victims should be compensated. The other view contends that Maker provides no guarantees on the return of the collateral as the auction system is based on market incentives — if the market is not efficient at some point, the Maker community should not be responsible for that.
While Monetsupply did not express an opinion, they believe that some may have misunderstood the liquidation system:
“I think vaults had unrealistic expectations of how much they would be getting back in a black swan event. Maker has a 1 hour oracle delay which benefits vaults by letting them save their vault by deleveraging. But the flip side is if the price is falling during that hour, once the vault does finally get liquidated the price is lower, so the vault gets less collateral back.”
Still, even for those who were in favor of repaying the vault, Monetsupply believes that two other arguments weighed against. One is the shift of responsibilities, as many in the community came to believe that liquidation risks were not properly explained on the Oasis front-end — which is maintained by the Maker Foundation.
“So some MKR holders may have felt that it wasn't their responsibility to pay, even if they were sympathetic to vaults,” Monetsupply added.
The other aggravating factor is the class-action lawsuit launched by the liquidation victims against the Maker Foundation:
“If MakerDAO approved compensation, what's to stop vaults from accepting these funds while still participating in the Maker Foundation lawsuit?”
Monetsupply nevertheless lamented a certain lack of transparency in Maker governance. Unlike some newer systems like Compound, there are no indications as to who is behind a particular MKR address.
“It’s really tough to read the room with anonymous voters,” they said. While they didn’t argue for deanonymization, better tracking of wallets across proposals and protocols to understand where power is held “will be super interesting,” they concluded.