Authors: SEED Latam & 0xRoot

During Q2 202, Sovereign Finance AVC hosted 8 Subcommittee Meetings, where we shared our perspectives and received valuable feedback from MKR holders, Ecosystem Actors, and Aligned Delegates.

Unfortunately, with the imminent approval of the proposal that eliminates the AVCs, our Q2 work will be unfinished, but before that happens we want to share with the Maker Community the result of our work and our opinions, hoping that it will be a contribution to outline the future of the protocol in some of its aspects.

At Sovereign Finance we remain committed to MakerDAO and Endgame and we do not take this as a goodbye but as a see you later, we will continue to look for the best way to contribute to the greatness of the protocol.

Document Structure

The Aligned Scope Proposals document of Sovereign Finance AVC is organized as follows:

1. Perspectives and View: Here we will give our point of view on different aspects of the current state of MakarDAO, the development of the Next Generation Atlas, the road to the Endgame and the vision for the future.
2. Governance Scope Proposal: Here, we include the Governance Scope proposal that we have been working on during Q1 2024. Each proposed improvement is accompanied by an explanation of the underlying rationale.

1. Perspectives and Views

a.- Our experience as an AVC:

This role was a great opportunity for us to have an active participation in Maker governance, nevertheless, we face obstacles that hold us back from being as effective as we could be:

• Limited Power: AVCs didn't have enough authority to influence ADs or demand transparency from EAs, which weakened their effectiveness. This suggests a hierarchical or organizational issue where AVCs lacked the necessary influence to fulfill their role effectively.
• Operational Confidentiality: The launch project's confidential nature meant that AVCs were not fully informed, limiting their ability to contribute meaningfully. This indicates a challenge related to information access and transparency within the DAO.
• Restricted Scope: AVCs were limited in their focus to Article 1 of each scope. This limitation prevented them from contributing to other, potentially more relevant, parts of the scope. It suggests a need for broader involvement or a reconsideration of the AVCs' mandate to encompass more aspects of the organization's operations or projects.

Another issue involves compensation and engagement. Rather than fostering a culture of active participation and innovation, the current compensation structure, which rewards holding MKR tokens over effort, has inadvertently led to minimal engagement from some AVCs. This raises critical questions about the alignment of incentives within decentralized governance frameworks and the impact of compensation models on the overall effectiveness of governance mechanisms.

Furthermore, the prevalence of a system more conducive to reward farming than active contribution has perpetuated a culture that prioritizes short-term gains over long-term sustainability. This not only undermines the integrity of governance processes but also diminishes the potential for meaningful contributions from AVCs, thus jeopardizing the overall health and resilience of decentralized organizations.