The Makerdao and the stablecoin DAI are a popular project in the decentralized financial (defi) space and it has had its share of problems too. This week, the project called Bprotocol leveraged a defi flash loan to influence a vote on Makerdao’s governance. The development team behind the Maker project wants to make it more difficult for future problems such as defi flash loans.
Since the start of the project Makerdao, often referred to as Maker, has been a defi project that has been in high demand. The Maker project is responsible for creating one of the first decentralized stablecoins called DAI, which uses over-collateralization and oracles to hold a peg.
DAI is used on trade shows and is regularly used within the defi world for various applications such as Compound, Uniswap, and Aave. The project has also faced a number of issues over the years and so have skeptics doubted its integrity of the Makerdao protocol.
A few examples are the stablecoin with problems with the $ 1 pin, as several votes have been taken to address the issue. On March 12, 2020, also known as ‘Black Thursday’, had the Maker project great difficulties when the price of ETH crashed, as many Collateralized Debt Positions (CDP) were destroyed.
This resulted in the Maker project being sued in a class action lawsuit, which is still ongoing. This week, the crypto community is complaining about Makerdao’s recent vote on the board, who saw that the Bprotocol project had a Maker board vote.
Basically, using the controversial flash loan process, Bprotocol used an unsecured loan to raise approximately $ 7 million in MKR. With the requirement to vote MKR, the flash loan ensured that Bprotocol could influence the poll a lot.
Another vote is taking place to address the issue, so it won’t happen again, including increasing the amount of MKR necessary to apply governance commitment. Makerdao’s board coordinator, ‘Longforwisdom’, and other members of the community addressed the topic in a Maker forum discussion called: “Updates – Flash Loans and Securing the Maker Protocol. “
“As promised, I am now giving an update [that] the current hat exceeded 100k MKR, ”Wrote Longforwisdom. As mentioned earlier, the contents of this spell are as follows:
- A GSM pause delay increases from 12 hours to 72 hours.
- The Oracle Freeze Module (OsmMom) is no longer authorized.
- The Liquidations Freeze Module / Circuit Breaker (FlipperMom) is no longer authorized. “
The flash loan has worried Maker community members that a malicious board attack could seriously damage the project. Increase the MKR requirement and the deactivation of the two modules should only lead to a temporary relationship.
In addition, members of the crypto community are also wondering if other Ethereum-based defi-governance protocols could be played by an unsecured flash loan.
What do you think about the B protocol influencing board vote using a flash loan? Let us know what you think about this topic in the comments below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or invitation to an offer to buy or sell, or a recommendation or endorsement of products, services, or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.