Uncollaterized Power: A Makerdao Governance Vote Was Swayed by a Defi Flash Loan


The Makerdao and the stablecoin DAI has been a well-liked venture within the decentralized finance (defi) house and its additionally had its share of issues. This week the venture referred to as Bprotocol leveraged a defi flash mortgage to be able to sway a Makerdao governance vote. The event staff behind the Maker venture goals to make it tougher for issues like defi flash loans going ahead.

For the reason that ventures inception, Makerdao, also known as Maker, has been a defi venture that has seen a whole lot of demand. The Maker venture is liable for creating one of many first decentralized stablecoins referred to as DAI, which leverages overcollateralization and oracles to carry a peg.

DAI is used on exchanges and is recurrently used inside the defi world on numerous purposes like Compound, Uniswap, and Aave. The venture has additionally seen a variety of points through the years and skeptics have questioned the integrity of the Makerdao protocol.

A couple of examples embrace the stablecoin having issues holding its $1 peg, as there have been numerous votes held to handle the difficulty. Then on March 12, 2020, in any other case generally known as Black Thursday, the Maker venture had major difficulties when the worth of ETH crashed, as many Collateralized Debt Positions (CDP) had been ravaged.

This brought on the Maker venture to get sued in a class action lawsuit, which continues to be ongoing. This week the crypto group has been complaining about Makerdaos recent governance ballot, which noticed the Bprotocol venture sway a Maker governance vote.

Uncollaterized Power: A Makerdao Governance Vote Was Swayed by a Defi Flash Loan

Mainly, by leveraging the controversial flash mortgage course of, Bprotocol used an uncollaterized mortgage to borrow roughly $7 million price of MKR. With the requirement to vote with MKR, the flash mortgage made it so Bprotocol may affect the ballot a fantastic deal.

One other vote is going down to deal with the difficulty, so it gainedt occur once more together with elevating the quantity of MKR wanted to use governance stake. Makerdaos governance coordinator, Longforwisdom, and different group members conversed in regards to the subject in a Maker discussion board dialogue referred to as: Updates Flash Loans and securing the Maker Protocol.

As promised, Im offering an replace now [that] the present hat exceeded 100ok MKR, Longforwisdom wrote. As talked about beforehand, the contents of this spell are as follows:

  • A GSM pause delay enhance from 12 hours to 72 hours.
  • The Oracle Freeze Module (OsmMom) will likely be deauthorized.
  • The Liquidations Freeze Module / Circuit Breaker (FlipperMom) will likely be deauthorized.

The flash mortgage has Maker group members involved {that a} malicious governance assault may severely harm the venture. Growing the MKR requirement and the deactivation of the 2 modules might solely result in a short lived bandage.

Alongside this, crypto group members additionally marvel if different Ethereum-based defi governance protocols will be gamed by an uncollaterized flash mortgage.

What do you consider the Bprotocol swaying the governance vote utilizing a flash mortgage? Tell us what you consider this topic within the feedback part beneath.

Tags on this story
Bprotocol, collateral, DAI, Dai Stablecoin, DAO, ETH, Ethereum Network, governance protocols, governance vote, Longforwisdom, Maker, maker dao, Rune Christensen, Smart Contract, Stablecoins, sway

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