MakerDAO’s Expulsion of Content Team Stirs Debate About Tougher Governance

MakerDAO is DeFi’s oldest and arguably most effective protocol, punching well above its weight of $1.6B in market cap. Yet it’s still going through growing pains.

A vote to jettison one of the protocol’s Core Units, MKT-001, a team in charge of content production, was ratified by a slim margin of MakerDAO’s members on Jan. 24. Slightly more than 49% of the votes said “yes,” to letting the team go while 47% voted against.

Members vote with the project’s MKR tokens, or can delegate their tokens’ voting power to other community members.

The vote was the closest of the 16 polls that closed on Jan. 24. It was the first time Maker governance had voted for involuntary removal of one of its Core Units from the DAO.

Core Units are ways of organizing different kinds of work in Maker. The protocol’s governance ratified a framework for their establishment in March so the use of Core Units within the DAO is relatively new, with the offboarding of one entirely untested.

Involuntary Offboarding

The current process’ abruptness has left many members of the DAO looking to modify the process.

“There should be some way to signal disagreement by the community with the facilitators’ actions before getting to the offboarding,” said Justin Case, a delegate for Maker voters, on a recent Governance and Risk call for the protocol.

Indeed, Seth Goldfarb, who is on the MKT-001, pointed out on the Maker forum that his Core Unit received 100% support for their most recent budget before being formally offboarded by the DAO.

Tim Black, another delegate for MKR votes, emphasized the pitfalls of an overly slow process for involuntary offboarding. “I think there is a balance to be struck here because there are these situations where we do want offboarding to be relatively swift if there’s bad actors or malicious intent or things that adversely affect the DAO,” he said on the call.

Not Surprising

There’s a document in the works to modify the offboarding process, which itself will need to be proposed and approved by governance. There are about 12 people working on the to-be proposed changes, according to PaperImperium, as they’re known on Twitter and who surfaced the vote.

PaperImperium is listed as a contributor to the draft of the proposal, which he shared with The Defiant. When asked what he thought was wrong with the offboarding process, PaperImperium said the issues simply stem from the DAO never having let a Core Unit go before.

“No one is good at anything the first time they do it — think of the first time you drove a car.” he said. “So it’s not surprising that there are a lot of improvements.”

GFX Labs, which provides governance consulting services, is the primary author of the new offboarding proposal. The outfit was responsible for the governance proposal to add a .01% fee tier to Uniswap, which has led the decentralized exchange (DEX) to gain ground in market share of stablecoin trading volume.

GFX Labs voted “no” on the proposal to offboard Maker’s content product Core Unit, according to their voting history.

Maker finalized the dissolution of their foundation, a centralized entity, in July, meaning the Core Units have only been exclusively sailing the ship for six months.

Other DAOs looking to decentralize may follow Maker’s lead as they look to preemptively iron out their own offboarding process.

“It needs to be better than ‘post something, have no discussion beyond a forum thread, then vote’,” PaperImperium said.