Decentralized Finance Protocol MakerDAO In The Middle Of A Governance Controversy

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makerdao governance controversy

We’re excited to announce that Rune Christensen, the CEO of MakerDAO, has an opening in his decentralized workforce if Seb were to leave his current position as the Facilitator of the Real-World Finance Core Unit. 

MakerDAO, one of the first DeFi protocols with over $ 18 billion in total value locked up, will be voting on a new facilitator soon.

MakerDAO is a trustless system of collateralized debt positions (CDPs), autonomous agents acting in economic unison, which are governed by smart contracts.

MakerDAO, one of the first DeFi protocols with over $ 18 billion in total value locked up, launched a subproposal on October 30 for Seb to be replaced as the Facilitator of the Real-World Finance Core Unit. This has caused controversy in the DeFi community.

The recent subproposal on MakerDAO’s governance forum begins with Rune Christensen (Rune) thanking Seb for his efforts and mentioning in passing an opening in the decentralized workforce if Seb were to leave his current position as the Facilitator.

Seb himself responded, thanking him and the team for their efforts:

“I worked with values like scientific governance, decentralization and transparency in high esteem. DAO is still an early concept and what is played at MakerDAO is an awesome social experiment where every member of the community plays a part. You are all shaping the future. Every time you act, you decide the culture and values of MakerDAO.”

He clarified, however, that it was not his wish to leave, and that Rune was apparently not trusting him as a facilitator and would “do whatever it takes to get rid of him.” Despite Rune’s power recently, Seb wrote that he wished to avoid drama that would damage the MakerDAO community.

The forum seems to have been supportive of Seb in general. One participant wrote that Seb “has been doing a tremendous job so far, and we could be lucky if he stays,” and this post has a very large amount of upvotes.

In an unexpected turn, Ashleigh Schap (Ash), a developer at MakerDAO previously, wrote in the forum (the extent of her post and her concerns are beyond the scope of this piece) that she was concerned by Rune’s approach to the project: 

“In this case he is trying to fire someone (via governance, which is so machiavellian that I would need an entire new post to comment fully), who has, by all accounts, done a great job.”

The main concern Ash has seems to be that Rune has too much control, and she warns that the great strides in MakerDAO governance could, therefore, be set back.

“A clear leader won’t always be available, and the ability of the many to govern such a specific function has actually been fantastic to witness and something that all other governable protocols have learned from.” 

There has been a significant amount of criticism of Ash’s post. Rune has responded with two posts (again, his posts are beyond the scope of this piece):

“Let me be clear, the only way I benefit from this project is that I hold a large amount of MKR. I am not getting paid anything, my only motivation is to try to benefit MKR holders, of which I am one.”

A second part of his letter questions Ash’s assertion that Maker governance is working well, noting a lack of active Maker holders and the freedom granted to the Core Units. “I was forced back into active participation now, because at the moment I would not be comfortable standing by. Rune explains and details the reasons why he wishes to offboard Seb from his Facilitator role in more detail.

He assures the community that this sort of protest is natural and expected in a DAO, and that he is overall “quite happy with the results of the conversation.” I have argued that it is also important to normalize removing / replacing those in leadership roles.

Rune and Ash did not immediately respond to Crypto Briefing for comment, while Seb responded but had no additional comments. Nathan VDH of Snapshot Labs responded to Crypto Briefing, sort of affirming the closing points Rune made, stating if the DAO isn’t messy after it is established, it hasn’t been decentralized sufficiently. Conflict is always an indicator that a democracy is working properly.

According to Rune,  it is MakerDAO’s first foray into a fully decentralized organization, so it is confronting many of the challenges that all decentralized organizations will face.

Via this site.


Chris Munch

Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.