Ten thousand Dai supporters participated in the vote to safeguard decentralization, setting notable standards for future DAO management.

Ten thousand Dai supporters participated in the vote to safeguard decentralization, setting notable standards for future DAO management.

The members of MakerDAO, the lending protocol behind the Dai (DAI) stablecoin, have voted against a series of proposals to make its governance structure more centralized.

On June 27, the members of MakerDAO (MKR) considered proposals to restructure the leadership of the decentralized autonomous organization (DAO) into something that more closely resembles a traditional corporation, with a board of directors.

Sam McPherson, the author of one proposal and a member of the MakerDAO Protocol Engineering Core Unit, expressed his frustration about the current governance model in a tweet saying:

“The status quo is not working… The DAO is not currently set up to make high-level decisions which is leading to decision paralysis or less informed parties making sub-optimal calls.”

The first proposal, LOVE-001, proposed the creation of a new "oversight Core Unit." Essentially, this would have established a new unit that could “periodically audit the activity of other Core Units” — in other words, it would be able to exert additional control over decisions concerning new collateral.

The overwhelming majority of MKR token holders voted against the LOVE-001 proposal.

The "Makershire Hathaway" proposal, as described in MakerDAO's GitHub, would create a special purpose fund worth $10 million to earn interest from the protocol's stablecoin reserves. The Makershire Hathaway proposal was rejected by 65% of voters.

The third proposal, called MIP75c3-SP1, suggested the creation of a fund that would be overseen by a new "Growth Task Force" with the goal of growing Maker "as quickly as possible." This idea was overwhelmingly rejected; over 76% of MKR tokens voted against it.

The three proposals seemed to have stirred the pot, as MakerDAO reported that they had seen the highest level of governance voting activity yet.

The rejection of these proposals and the high turnout at the referendum indicated that MakerDAO members might strongly prefer a model of governance that is properly decentralized, setting a precedent for other DeFi protocols.

MakerDAO is the authority over the Maker protocol, which issues U.S. dollar-pegged DAI stablecoins in exchange for user deposits of Ether (ETH), Wrapped Bitcoin (wBTC) and other cryptocurrencies.

MakerDAO took a significant step this month, with the protocol signaling its desire to invest some of its dormant stablecoin reserves in traditional financial assets. Earlier this month, as fears of DeFi spread, MakerDao decided to cut off lending platform Aave's ability to generate Dai for its lending pool without collateral.

Despite the series of important developments for the DeFi protocol, Maker's governance token MKR has dropped roughly 10% over the past week, currently trading for $880 according to Cointelegraph Price Index.