MakerDAO & The Long Path To Scaling Decentralization/DeFi
There are currently two paths to decentralization that are getting the majority of focus
There are currently two paths to decentralization that are getting the majority of focus
The first path, as exemplified by MolochDAO, is the Minimum Viable DAO (MVD) path. This path starts with a super simple DAO, and then tries to add complexity over time. MetaFactory, a Moloch DAO fork, is a great example of a project taking that path taking that path. I look forward to hearing from Drew Harding on “What MataCartel Did” (Episode #1) on Wednesday.
The other path, as exemplified by MakerDAO is starting with a complex system, which includes centralized aspects, and then becoming fully decentralized over time. The only thing we know is that it’s easier said then done.
Maker took a great step last week, on March 25th, when it turned control of the supply of undistributed governance tokens, MKR, over to MKR holders at large.
Then on on April 2nd, in the weekly Governance & Risk Meeting, Maker Founder, Rune Christenen, detailed a three step plan to become fully decentralized:
As outlined in this Maker post on April 1st, the main tool for supporting and leading the path to decentralization is the Maker Improvement Proposals (MIPs) Framework. On Monday, April 6th, the Maker Foundation will create a new category on their community forum dedicated to MIPs, and they will post the first 13 MIPs there.
The goal is that after several years of iteration of proposals and core governance processes, the MIPs Framework will define and set the stage for fully autonomous community governance of the Maker Protocol. Complete autonomy can then be followed by the dissolution of the Maker Foundation, as it will have fulfilled its purpose and no longer be needed.
This is a great goal, but with so many unknowns, it’s difficult to have confidence in any timeline.
Maker Needs To Grow The Community & The Participation Of Community Members
I think Maker has done a great job of being transparent. If you can’t make it to the live stream of the weekly Governance & Ricks Meetings (held weekly since July, 2018) you can watch them on YouTube where the viewership has ranged from 73–536.
If you smooth out the graph by taking the average # of views of the last 10 meetings, you get a tighter range of 100–300 views.
The obvious two things to note is
The community is tiny
The community is not growing
Now, the good news is, use of Maker has grown dramatically, even while the engaged community (as represented by YouTube video views) has remained pretty constant:
The bad news is that decentralization requires an engaged community.
An even deeper level of engagement is voting.
On average, only 26 unique MKR holders have been voting. Again, it’s a minuscule number, and it’s not growing. Maker appreciates it needs to grow the community and the engagement of their members.
What’s Next
Maker is an evolving experiment in decentralization/DeFi.
What’s notable is, how early we are, and how few of us there are that care enough to watch a video or vote.
But the only way we’re going to learn, get better, and grow, is by doing. And by failing. Sometimes the failures will be devastating. Like some airplane crashes are fatal:
But we hopefully learn from our mistakes and get better:
I’m excited about the Maker experiment, because the world of CeFi is irreparably broken:
And Maker and DeFi offer an alternative, a better way for the world. The question isn’t if, the question is when.
Thanks for clapping (up to 50 times)!