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MakerDAO: Christensen is Doing the Right Thing for Token Holders

This week has had multiple revelations of in-fighting at MakerDAO. Brady Dale at CoinDesk broke the story on Thursday and we reported on Governance issues the same day. Since then Zandy’s story and Matt’s story have been posted on Reddit. We have also found a Medium blog post with the byeline “MakerDAO” from the 8th of April which throws some light on the situation.

The disputes are over control of development fund (MEGF) worth over $200m. The 8th of April post says  of the board structure at that time,

At the end of 2018, MEGF created a board. Though the term “board” may conjure up images of a formal corporate structure, the MEGF board was a bit different. It was made up of nine technical members, who were responsible for ensuring the security of the MEGF’s development funds in a multi-sig.

and that,

[…] we are looking to reconstitute the MEGF board in a way that will not only ensure the representation of a decentralized community of stakeholders (including technical contributors and security experts), but also borrow elements from traditional board structures, including independent directors. As part of this process, we will carefully and deliberately review the ideal MEGF board structure in the coming weeks, and will solicit input from a variety of stakeholders along the way: partners, developers, community members, token holders, governance experts, and others.

I think that the conflict may be fairly characterised as a conflict between MakeDAO management led by the CEO Rune Christensen and a team of developers who want to develop the software in they way they think best.

Christensen is Right

Corporate governance exists for a reason. The people who bought Maker Tokens and have funded development worked hard for their money. They want to be confident that it is being spent wisely. Everyone in a business must be responsible and accountable for the actions. Conventional board structures were invented to deliver this.

If there is a dispute between Management and Talent then Token holders should choose Management because every member of an organisation is irreplaceable but none is indispensable.

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