The Maker Foundation Team firmly believes that a careful and gradual approach is the safest path towards a long-term equilibrium of decentralized governance. The first step on this journey is to hold the first-ever public MKR vote on September 12th.
This first MKR vote may be one of our most significant, as we will use the opportunity to bootstrap community governance by aligning all stakeholders behind five core principles. Principles that will guide Maker on the path to long-term success and effective decentralized governance.
All Maker community members should read the five core principles of the Maker Governance philosophy carefully. As you reflect on whether these principles are in alignment with your own ideas about how Maker can maximize its potential impact on the world, please remember to provide feedback by joining the debate on the /r/MakerDAO subreddit. The Maker Foundation Team will continue to iterate on the Foundation Proposal based on your feedback and ultimately hold a vote to accept the Proposal as the first collection of core documents of the Maker Governance Philosophy.
The Maker Governance Framework will be built on rigorously vetted, reproducible, scientific models created by experts with proven track records in the traditional finance space.
The Framework itself can be broken down into two major components:
- Governance Proposals: Symbolic votes used to poll community sentiment towards specific models or data sources.
- Executive Proposals: Used to ratify the Risk Parameters determined by the models and data accepted by Governance Proposals. Executive votes result in state changes inside the Dai Credit System and occur every quarter.
This distinction encourages the governance debate to become a consensus-seeking exercise to reach an optimal compromise, where communication channels force participants to focus on the underlying reasoning, theories, and data provided by the risk assessments, rather than polarizing contests about specific risk parameters for particular tokens.
In this model, neither the MKR holders nor the Maker Foundation will have any special powers to arbitrarily dictate the risk parameters of the system, they can only affect changes through evidence-based, provable, deliberative arguments.
The Maker Foundation Risk Team has been publishing a series of foundational papers (part 1, part 2) about the Maker Governance Framework that provides a full overview of the different elements required to launch a functional governance process. The models outlined in the foundational papers will determine the risk parameters of Multi-Collateral Dai at launch, as well as the processes to modify them over time.
Serving The Underserved
Serving the underserved refers to our focus on Dai adoption in emerging markets by recognizing the tremendous opportunities for growth that results from reducing inefficiencies in the global economy.
We will achieve this through an application of the “triple bottom line”, a financial concept that defines a businesses success by not only focusing on net income, but also the way it achieves profitability through the betterment of humanity in general. The three ‘bottom lines’ are generally defined as “profit, people, planet.” By aligning with these ideals we can prioritize the growth and adoption of Dai in emerging economies, while also seeing our network have a profound positive social impact on the world in a sustainable manner.
We believe the unbanked will immediately benefit from this economic inclusion and see a resulting increase in quality of life by giving them access to the global financial ecosystem through the use of Dai as a predictable and stable unit of account. This new and untapped market comes with a very low cost-to-acquisition that will accelerate Dai’s entrenchment in the global marketplace.
The makeup of the Dai collateral portfolio can have a significant impact on global capital allocation. It is therefore crucial that governance of the collateral portfolio take long-term societal, environmental, and sustainability impact into account. The Maker project as a whole must keep the principles of sustainable finance as a core value, and always include negative externalities as a key factor in risk assessments of collateral. This means that Maker will be biased towards, for example, renewable energy that provides a long-term global benefit, while being biased against funding fossil fuels and other assets that create long-term risk.
The Maker Foundation is committed to true decentralization, but the road to decentralization needs to be a steady path taken step-by-step. This will ensure that the Foundation will have the support it needs to be successful, and protect against threats to the long-term goal of decentralization, such as a power vacuum. It is also crucial to provide maximal stability for partner companies that are integrating with Maker as they need to feel safe there won’t be sudden changes due to rapid decentralization of governance.
The Foundation will drive Maker towards increased decentralization, with every step opening up more aspects of governance to community control, while eliminating single points of failure. At the same time, the Foundation will also take responsibility for teaching and providing guidance on how community members can most constructively contribute to governance.
Driving Dai Adoption
To drive growth and promote the adoption of Dai, the Maker Foundation needs high levels of flexibility and more control in the short term. The Foundation will facilitate exponential user growth, business adoption, and dapp integrations to maintain the dominance of Dai across all markets for decentralized stablecoins.
This includes doing various low-level tasks in the ecosystem, such as managing the initial set of Oracle nodes and the first Emergency Shutdown (formerly called Global Settlement) infrastructure.
Before the new voting governance dashboard is released, the Maker Foundation will coordinate voting among highly technical MKR holders via command line tools, to avoid any disruption to Single-Collateral Dai.
Mechanics of the Vote
If you agree that these five principles, as written above, should be included in the core documents of the Maker Governance Philosophy, get ready to vote Yes when we conduct the first official MKR vote on September 12. If there is something you would like to change, please provide feedback on our subreddit.
Be on the lookout for the additional documents expanding on the Scientific Governance principle and Serving the Underserved that will be available in advance of the September 12 vote.
The vote will use the new governance dashboard that is currently under development, and will showcase the upgraded user experience that will be used to control Multi-Collateral Dai governance. Both Yes and No options will be available for people to vote on, and there will be detailed instructions on how to vote with your MKR. The Foundation Proposal will be considered passed if there is a simple majority (>50%) for Yes, with no quorum.
The goal is to achieve a landslide success, showcasing the unity and enthusiasm of the Maker community in taking on the challenge of decentralized governance. The Maker Foundation will seek a dialogue with any No voters to better understand their concerns. We strongly encourage everyone to share feedback and provide any input they have that will make the Foundation Proposal the ideal governance philosophy.
Join the Community Call
A community call will take place on Wednesday (Aug 29th) at 16:00 UTC, where Maker Foundation team members will be available to answer questions, receive feedback on the Proposal, and explain points in deeper detail. Please be sure to add any questions, comment or concerns you may have to the ‘Foundation Proposal’ thread in our subreddit.