DeFi
MakerDAO investment manager Monetalis survives ouster vote, commits to audit – DL News
- A vote to oust MakerDAO asset manager Monetalis failed on Monday.
- But the firm provided several late reports and pledged to conduct an audit.
Monetalis Group, a company that manages nearly $1.5 billion in U.S. Treasuries on behalf of stablecoin issuer MakerDAO, survived an ouster vote sparked by missed deadlines and a blowback disappointing investment.
The two-week voting period ended Monday, with nearly 59 percent voting against Monetalis’ ouster. Proponents led for part of the voting period, but several votes from top MakerDAO delegates swung the contest in favor of Monetalis last week.
Nevertheless, the author of the proposals called the result a “moral victory.”
On Friday, Monetalis provided several long-awaited reports and said it had scheduled an overdue audit for July. Additionally, it announced that it would hand over its reporting responsibility to another company, AccountAble.
“We thank Monetalis for recognizing community concerns and proactively arranging the transfer of functions and compensation to AccountAble in an orderly manner,” MakerDAO delegate GFX Labs, who led efforts to oust Monetalis, in the MakerDAO governance forum.
In DeFi, delegates are people or entities who vote on governance matters on behalf of a protocol’s token holders.
Maker issues the stablecoin DAI. It was the fourth largest DeFi protocol as of Monday, with over $7.7 billion in user deposits.
Maker is the fourth largest protocol in DeFi.
DAO controversies
The fight over Monetalis’ management of MakerDAO investments is the latest controversy aimed at shaking up crypto cooperatives known as decentralized autonomous organizations, or DAOs, and highlighting the power the protocol’s founders wield – indirectly or otherwise – in the DAOs to which they were supposed to cede control. .
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MakerDAO founder Rune Christensen is a lead investor in Monetalis, according to the investment manager. website. He is currently pursuing a major and controversial project reorganize of the Maker Protocol, in part to combat voter apathy within the DAO.
Monetalis did not immediately respond to a request for comment.
The company manages a pair of U.S. Treasury investments on Maker’s behalf, called Clydesdale and Coinbase Custody.
GFX propose The ousting of Monetalis after the firm failed to meet several reporting deadlines, as well as a promised audit. Additionally, despite the 5% yield on U.S. Treasuries, Clydesdale barely returned more than 4% to MakerDAO in 2023, according to data collected by Steakhouse.
BlockTower, another company managing U.S. Treasury investments on behalf of MakerDAO, returned about 5% in the 180 days ended May 31, according to Steakhouse.
“Monetalis has a long history of failing to produce required reports, failing to ensure their accuracy when they do, and its Clydesdale vault has significantly underperformed both its underlying assets and Andromeda, which shares the same investment mandate,” GFX wrote on May 7. , referring to the investment managed by BlockTower.
Monetalis’ response
Responding on MakerDAO’s online governance forum, Monetalis said: “Standards for reporting and reserve structure were increasing significantly for stablecoins” and had “underestimated” the time it would take to improve its own reports.
The company also denied that mismanagement of its Treasury investments cost MakerDAO millions of dollars in lost profits.
Among other things, Swiss-based investment management faced higher costs, according to Monetalis.
“But these costs come with benefits arising from varied transaction structures, relationships with a broader set of service providers, diversification of jurisdictional frameworks, and access to different rails,” the company wrote.
Several companies have stepped in to offer their own services, including Mountain Protocol and Superstate.
Shortly after voting began on June 10, several major delegates voted to oust Monetalis, and it looked like GFX’s proposal was going to succeed.
“Monetalis underperformed as an arranger and failed to fulfill its duty to report results, despite multiple calls for action from the community at large, and failed to provide a plausible justification,” a wrote StoneWill, pseudonymous MakerDAO delegate, after voting.
Delegates against GFX proposal
But several top delegates voted against GFX’s proposal last week, tipping the scales in the company’s favor.
A pseudonymous delegate, Vigilant, said he would not blame Monetalis for trying to shake up its reporting structure or the additional costs of operating outside Switzerland.
Nonetheless, Monetalis provided many of the documents late on Friday and said the reports would be prepared by AccountAble in the future.
“We accept responsibility for the missed reports,” CEO Allan Pedersen said. “We note that we have acted in good faith throughout this process and period.”
GFX said it would continue to advocate for Monetalis’ withdrawal, but called Pedersen’s announcement a victory.
“GFX’s initial requests have been met,” wrote GFX’s pseudonymous MakerDAO delegate, PaperImperium, on X.
“The failure to produce these documents by the May 15 deadline is what prompted the initial proposal.”
Do you have any tips on Maker and other DeFi protocols? Contact the author at aleks@dlnews.com.