Ethereum-based MakerDAO hands off power to community

Fibo Quantum

The Maker Foundation, a body charged with getting the MakerDAO network up and running, today announced that it has relinquished all control of its governance token, MKR, to the governance community. That means that MKR holders are the only ones who can vote on the fate of the network. 

Today’s announcement marks the completion of the Maker Foundation’s three-month odyssey toward complete decentralization of its governance system. The Maker Foundation started dispersing the tokens to the community on December 20, 2019.

MKR holders now have complete control over a special smart contract that lets the governance community vote on the minting and destruction of MKR, as well as future permission changes to the MKR contract. 

For instance, earlier this month, MKR holders voted in favor of a debt auction to stabilize the value of its decentralized stablecoin, DAI, whose peg to the US dollar is backed by cryptocurrencies—which crashed along with global markets amid panic caused by the coronavirus pandemic. 

“By completing its commitment to transfer the MKR token contract to MKR holders, the Maker Foundation continues to move toward a completely self-sustaining MakerDAO,” said Rune Christensen, CEO of the Maker Foundation. 

“And it’s just the beginning. We will continue to ready the community for complete decentralization in the weeks and months ahead,” he added. 

To achieve effective governance, the community must vote smartly—and vote often—says the announcement. “Without enough community passion and well-intentioned participation, a community-governed system can become vulnerable and struggle to succeed,” it reads. 

California-based MakerDAO is best known for producing Dai, a dollar-pegged stablecoin. Unlike conventional stablecoins, which are backed by fiat reserves, Dai is backed by Ether and Brave Attention Token—the native currency of the crypto browser, Brave. As of last week, Dai can also be backed by USDC, a stablecoin with fiat reserves maintained by less-than-decentralized companies Circle and Coinbase.