Cody McGrath 
MakerDAO finally rejected a proposal to create LOVE-001 with 60.17% votes against and 38.28% of votes in favor
MakerDAO votes against creation of LOVE-001
MakerDAO decided today against establishing an oversight group whose job it would have been to inform MKR owners about the nuances of upcoming proposals.
A proposal to substantially alter the governing structure of MakerDAO was rejected.
According to Luca Prosperi’s suggestion in the MakerDAO Governance Forum, the protocol should have established a Lending Oversight Core Unit (LOVE-001), which would have served as a form of the advisory board for the DAO on complex issues.
The proposal received 60.17 percent of votes against and 38.28 percent of votes in favor during the voting period, which lasted from June 13 to June 27.
Voting with 293,911 MKR tokens, or over 30% of the entire circulating supply, set a new record for DeFi governance (most proposals aim to attract 5 percent of the supply). The ruling had no effect on the price of MKR.
Education for MKR holders
According to the proposal, LOVE-001 should offer MKR holders a professional resource so they can educate themselves before casting their votes on upcoming proposals. Since these cases “reside both inside and outside the universe of smart contracts,” the unit “[facilitated] the sustainable onboarding of… billions of more complicated use cases.”
The protocol had to “decide whether its objective [was] to manage a decentralized [and] de-risked loan facility or an investment vehicle to maximize profit,” MakerDAO head of protocol engineering Derek Flossman said in a tweet.
He had also mentioned the dangers of regulatory and personal capture that come with the establishment of such a unit.
Decentralized finance technology
MakerDAO is a decentralized finance (DeFi) technology built on Ethereum that enables users to create and borrow DAI, a stablecoin with excessive collateral. According to Prosperi, MakerDAO is at the center of a DeFi ecosystem that is becoming more complex, and MKR holders may soon “not have the needed bandwidth nor experience” to fully comprehend the implications of upcoming proposals.
MakerDAO is not the first DeFi system to have lately considered experimenting with governance structure, even though the concept was ultimately rejected. An innovative dual-governance approach that would align incentives for both LDO and stETH holders is being discussed by the Lido community as a potential addition to its protocol.