Meltem Demirors
@Melt_Dem

1/ let's talk about today's @MakerDAO / @a16z announcement. for those who missed it, A16Z's crypto fund bought 6% of Maker tokens for $15M, at a 25% implied discount to the current price of $MKR. twitter.com/MakerDAO/statu…

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2/ according to a blog post, the $15M will be used to fund the next 3 years of operating costs. i'm sure people think this is a great sign for the project - being able to recruit high quality capital. but, i think this is a massive failure in governance and project management.

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3/ no vote was conducted on this matter, despite governance being a core tenant of the project: vote.makerdao.com

instead, a team decided to sell a large portion of tokens to one single investor without consulting other $MKR holders or communicating with their community.

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4/ according to data i could find, here's who owns MKR
- 39% in the development fund (the DAI foundation, no website)
- 61% trading publicly on the market (onchainfx.com/asset/maker)
- 15% held by core team members (no details on lock up, etc)

so where did this 6% come from?

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5/ while i appreciate projects need capital to operate, selling development funds to raise capital at a discount to the public market price seems like an over-reach for a foundation. this process should have been conducted in a transparent manner, instead of behind closed doors.

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6/ going back to @1confirmation / @thecontrolblog post from February - transparency is a big part of the value prop for this project. apparently "holders [will] be increasingly empowered over time...voting on all major decisions"

link: thecontrol.co/lessons-from-m…

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7/ currently, most $MKR are still locked by the team, and will be distributed to MKR ecosystem participants over time. i believe @polychaincap will ultimately own 15%, and are one of few investors to have received $MKR to utilize.

see @etherscan: etherscan.io/token/tokenhol…

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8/ and according to this @MessariCrypto tearsheet (disclosure: i'm an investor) - A16Z already investing in $MKR back in December. is anyone else slightly confused here?

messari.github.io/research/profi…

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9/ curious to hear how other people view these types of deals, and what you make of this. if anything, i think it highlights the need for better financial planning and more transparent fundraising mechanisms. i'm sure the @MakerDAO team has more to say...

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10/ if anything, this makes me believe firms like @a16z will be the "lender of last resort" for teams who run out of money. distressed token teams = prime time for opportunistic capital. not a criticism, actually quite a clever move for a fund. just an observation... 😁

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