MakerDAO Approves Proposal For Adding 24 Hour Delay To Governance Actions

MakerDAO Approves Proposal For Adding 24 Hour Delay To Governance Actions

February 22, 2020

MakerDAO has approved a new important executive proposal that will add a 24 hour delay to governance actions. This is important for MakerDAO and decentralized governance systems because it settles a new rule on how to better improve these networks and reduces the possibility of a flash governance attack. 

MakerDAO Executive Proposal Approved

The new proposal has recently passed in which it will be difficult to make a flash governance attack on the MakerDAO network. As mentioned before, this is one of the most positive things to improve MakerDAO’s stability for its governance mechanism. 

According to Robin Hood Jr, a developer in the crypto space, this is just a big step forward in securing the MakerDAO system. 

On the matter, he commented:

“I just want to emphasize that although this definitely does help mitigate the damage caused by flash governance attacks, the Governance Security Module prevents something much greater, which is a general governance attack.”

With the new proposal approved, there will be 24 hours to enact an emergency shutdown which dis-incentives attacks in the MakerDAO network. The MKR used to perform such an attack on the network would be ultimately burned. 

The proposal can be seen on the blockchain explorer:

https://etherscan.io/tx/0xebd52dc4251a20a37190ed80e40440e184e259247af0b35bf85e27bc601aa019

https://etherscan.io/tx/0x61ca3aeead7dd4e7850d3776fcca606852ad342e0ad91fe3aa3644648d038d6a

What is MakerDAO?

Maker was created on the Ethereum blockchain as a smart contract platform that aims at backing and stabilizing the value of the DAI stablecoins, which is tethered to the price of the USD. 

In order to do so, the MakerDAO ecosystem uses a dynamic system of Collateralized Debt Positions (CDP). Through it, it is possible to create MKR tokens and destroy them as well. This will change according to the fluctuations in the price of the DAI virtual currency. 

The interesting thing about MKR is the fact that it is possible to stabilize the price of a stablecoin using smart contracts, burning coins or creating new ones. At the same time, users that hold MKR tokens will also have voting rights in the MakerDAO network and its approval voting system. 

According to CoinMarketCap, Maker (MKR) is now the 25th largest virtual currency in the market and it has a price per coin of $623. Maker has also a market valuation of $615.30 million. Meanwhile, DAI continues to grow with some platforms offering fixed interest rates of over 7% annually. 

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