Preliminary analysis of Maker DAO with the DAO Index Version 0.9
Please refer to Decentralized Autonomous Organization (DAO) by Samer Hassan and Primavera De Filippi.
MakerDAO is an open-source project on the Ethereum blockchain and a Decentralized Autonomous Organization1 created in 2014. The project is managed by people around the world who hold its governance token, MKR. Through a system of scientific governance involving Executive Voting and Governance Polling, MKR holders manage the Maker Protocol and the financial risks of Dai to ensure its stability, transparency, and efficiency. MKR voting weight is proportional to the amount of MKR a voter stakes in the voting contract, DSChief. In other words, the more MKR tokens locked in the contract, the greater the voter’s decision-making power.
This pub covers the preliminary analysis and scoring of Maker DAO with the DAO Index Version 0.9.
I recently updated the DAO Index questionnaire to Version 0.9. You can find the original post on the update here.
You can find the completed questionnaire below or here.
Maker DAO received an overall score of 3050/4500 (67.77%).
Maker DAO had an N/A score of 0 (i.e., every question was applicable to Maker DAO).
There were 7 questions that could not be answered because of an inability to locate sources or their non-existence.
Maker DAO’s overall score and score per principle are summarized in the table below.
Broad stakeholder participation
Practicing DAO cooperativism
Cultural patterns and Brand
Information & Data Transparency
Human-centered Algorithmic Governance
You can find the completed DAO Index V0.9 questionnaire for Maker DAO here or in the embed below.
The completed questionnaire includes the scores (points and plain-English response) and explanation for each question’s response.
The primary data sources I used for this analysis include:
Awesome Maker DAO,
Maker Technical Documentation,
Maker Operation Manual,
Maker Governance Forum,
Maker Improvement Proposals (MIPs) Portal , and
Maker Governance Voting Portal.
Govbase from MetaGov was extremely helpful in this analysis, saving time figuring out what decision-making roles and actors existed in Maker DAO. I plan to add a field to the DAO Index for preferred data sources per question, of which Govbase will be one.
Maker DAO is a large, well-established DAO, which made it difficult to comb through their docs to find specific information to respond to the questions in the DAO Index. Though, this is a better situation than a lack of documentation.
I would recommend for Maker to develop a better means for navigating their documentation.
I think most of the questions took ~10 minutes to formulate a response. Though, the time to draft a response shortened after finding the Maker Operational Manual and the Maker Technical Documentation.
I really liked Maker’s Emergency Shutdown and GSM Pause Delay modules for the Maker Protocol. Interesting safeguards for security risks arising from a malicious governance attack or issues with DAI.
There were 7 questions I could not find a source on:
Does the DAO have an explicitly defined dispute resolution mechanism?
Does the DAO explicitly state that private communication channels are for sensitive or confidential matters?
Is the Banzhaf Index for each individual member less than or equal to twenty-five percent (<= 25.0%)?
Does the DAO have leadership from multiple geographic regions?
Does the DAO have managers from multiple geographic regions?
Does the DAO redistribute profits/surplus on a basis other than capital holdings?
Does the DAO have metrics beyond governance and finance, such as contributor well-being or happiness?
I was surprised not to find an explicit dispute resolution mechanism in the Maker docs.
I really liked Maker’s dashboards (though, it feels like there are too many of them) for governance and finance.
Maker has good practices for compensation transparency (IDA-07). I really liked that Maker is willing to compensate recognized delegates and core unit members for their work at Maker. Additionally, that compensation is explicitly discussed in MIPs so that it is on the record.
Maker also has a code of conduct (BSP-07) for recognized delegates (though, I am unsure why it is not applicable to shadow delegates). I like the idea of having a code of conduct for delegates so that there is a standard for accountability.
Hmm. I think I will add fields to the DAO Index for rating the difficulty of finding information and for tagging the data sources used per question.
If you are interested in the DAO Index and the analysis of Maker DAO, I encourage you to consider reviewing the completed questionnaire (reviewing responses and questions for veracity, language, etc.) or providing other feedback on the analysis of Maker DAO.
If you or someone you know is interested, please send me a message on Twitter or via email ([email protected]) and I will add you as an editor to the table. Otherwise, you can make your own copy of the table and review it.