In its ongoing effort to become more decentralized, lending platform MakerDAO has returned a large sum of funds from the developer fund back to the DAO.
On May 3, DeFi stalwart Maker announced that it has returned 84,000 MKR tokens from its development fund to the DAO governance module.
The Foundation completed the transfer of tokens to Maker governance in March 2020 in its first step towards full decentralization and this latest move has added to that incentive.
“The Foundation has placed no conditions or expectations on MakerDAO regarding the returned MKR. Instead, MKR holders, much as they do in governing the Protocol, have total independent control to decide how (or if) they incorporate this MKR into their future plans.”
At current MKR prices, the transfer was worth approximately $493 million.
Decentralizing DeFi
The Maker community’s governance support has allowed the Foundation to bootstrap the DAO and pursue its own obsolescence. The announcement added that the Foundation now turns inward to focus solely on its dissolution.
“To that end, it has retained less than one percent of the total current MKR supply to manage the transition and as a bulwark against future potential liabilities.”
Foundation dissolution and full decentralization has been targeted for December 31, 2021, at the latest.
The protocol will then be governed solely by the community and token holders. However, there can still be centralization concerns when whales dominate proposals and governance votes with a handful of addresses controlling the lion’s share of the tokens.
Other anomalies have occurred such as the incident in October 2020 when a third party took out a flash loan in MKR to boost their own proposal.
On April 20, MakerDAO governance voted to adjust the liquidation mechanism to help safeguard Dai’s stability. Liquidations 2.0, as it has been called, will introduce a new auction model for liquidated collateral in order to prevent another “Black Thursday” event.
MKR price update
At the time of press, MKR was trading at $5,930. Since the beginning of the year, MKR has surged nearly 900% to current prices.
It’s currently cooling off from a May 3 all-time high of just below $6,300 and has a market cap of $5.2 billion with a little over 900,000 tokens in circulation.
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