MakerDAO’s sudden emergency governance proposal: The loan limit and mortgage rate are flying together. Is it a defensive OR power struggle?

Original title:"Out-of-Schedule Executive Proposal for Community Security"

Author: Three Sigma & PaperImperium

Compiled by: Shenzhen, PANews

MakerDAO recently saw a sudden "emergency governance proposal". Without any warning, the proposal quickly entered the voting process and was passed (but is still in the time lockdown stage). This proposal not only significantly increased the borrowing cap of MKR tokens, but also significantly lowered collateral requirements, triggering widespread doubts from the community about the transparency and fairness of governance.

**Proposal points: Comprehensive adjustment from debt ceiling to mortgage

rate**

According to the changes in LSE-MKR-A risk parameter released by the forum, the core content of the proposal includes:

• Maximum debt ceiling (line)

Increased from USDS 25 million to USDS 45 million

• Target available debt (gap)

Increased from 5 million USDS to 45 million USDS at one time

• Debt cap increases cooling time (ttl)

Shorten from 36 hours to 20 hours

• Stability Fee

Upgrade from 12% to 20%

• Liquidation Ratio

drastically reduced from 200% to 125%

• Liquidation Penalty

Reduced from 5% to 0%

In addition, the proposal also reduced the GSM Pause Delay from the original 30 hours to 18 hours, which means that the response time for contract execution will be further shortened at the governance level in the future.

These parameter adjustments essentially allow MKR tokens to obtain higher borrowing (more than 2 times the previous one) and allow higher leverage (the collateral rate dropped from 200% to 125%). At the same time, liquidation fines were also reduced to 0%, significantly reducing the cost of liquidation.

**Official statement: Does it really exist to prevent and control

attacks?**

Defensive reason vs. Fuzzy attack vector

Both the initiator of the proposal and some official channels attribute the urgency of this proposal to "to prevent potential governance attacks." However, several community members, including PaperImperium, noted that no specific attacks were found that were known and ongoing. There are still many doubts about whether the proposal can truly resist the so-called "governance attack" and whether there are deeper motivations.

Questioners are banned

The most controversial thing is that during the voting, many users and institutions (such as GFX Labs) who have oppose or question their positions were banned or banned in official channels such as Discord and forums. PaperImperium said that its personal Discord account and GFX Labs forum account were also banned during this period, and the doubts were once difficult to continue to ferment in official channels.

Multi-faceted perspective: Who is benefiting and who is questioning?

Short-term beneficiaries: high leverage and high liquidity

• Large-scale agency or organization

With this proposal, users with large MKR holders can more easily borrow more USDS from the Maker protocol, while the reduction in collateral ratio also allows them to gain higher leverage with less capital.

• High-risk speculators

For traders willing to take higher risks, lower liquidation fines and higher leverage space undoubtedly provide more room for operation.

Long-term risks: potential shocks to governance and financial security

• Governance concentration and transparency

In the absence of clear evidence of attack, bypassing the conventional process and passing the proposal quickly will inevitably make people question whether a minority of interest groups are exercising excess power.

• Systemic risks increase

The significant reduction of liquidation ratio and the increase of debt ceiling means that the system is more likely to experience chain reactions under high leverage when market fluctuations.

• Community trust shakes

The ban on skepticism and the lack of adequate argumentation for emergency measures will have a potential blow to MakerDAO's reputation for decentralized governance.

Multiple motivations behind emergency proposals

PaperImperium pointed out that some MKR holders have recently been dissatisfied with MakerDAO's development direction, source of profits and the way of community governance, and called for reforms. Whether this proposal can be related to these internal demands is still a key point worth discussing.

• Internal reform demands

Against the backdrop of "sluggish growth and declining profits", some MKR holders hope to promote agreement changes and improve capital utilization efficiency.

• Strike the factional dispute

Different interest groups have different demands at the governance level. Using emergency proposals to quickly advance certain changes may be a means to compete for the direction of the agreement.

• External defense or internal operation

The statement of "governance attack" is not uncommon in the DeFi circle, but actual implementation often requires obvious on-chain evidence; and the lack of conclusive evidence this time also triggers vigilance about the possibility of "internal manipulation".

Future Outlook: Where does MakerDAO go?

The impact of MakerDAO's emergency governance proposal is by no means limited to parameter adjustment itself, but its far-reaching significance lies in the questioning of the decentralized governance model. At present, the community is paying special attention to the following issues:

1. Improvement of governance processes

How to ensure that subsequent major proposals follow a more transparent and democratic process, rather than bypassing community consensus in the name of “urgent”?

2. Information disclosure and supervision

Can we give reasonable statements on the disclosure of specific details of the "potential attack" and the explanation and handling of banned users to maintain the community's trust in governance?

3. The balance between decentralization and efficiency

Decentralized governance is often less efficient, but over-centralized decision-making models may lead to abuse of power. How to find the best balance between the two will be the core challenge of MakerDAO.

**Conclusion: Beware of the black box governance and return to community

consensus**

The "emergency governance proposal" is like a mirror that shows us the most important aspect of the DeFi ecosystem: When external or internal pressure occurs, can the governance mechanism truly stand the test? As a pioneer in the DeFi field, the thinking brought by this storm is of warning to the entire industry.

Perhaps as community critics have said, without clear and transparent governance processes and public verifiable evidence of attacks, any "emergency" could become a tool of power for a few. Only by ensuring smooth community dialogue channels and establishing a complete governance mechanism can MakerDAO truly move towards a healthy and sustainable development path.