- MakerDAO will establish the Defense Fund with a initial 5 million DAI.
- This fund is self-insurance and will not cover the legal defense costs of MakerDAO participants.
- Funds will be stored in a multisig wallet with Maker Protocol as the beneficiary.
MakerDAO is the decentralized autonomous organisation (DAO), that issues the Dai stablecoin (DAI) and governance token Maker(MKR). announced the launch of a new fund to be utilized in the case of legal or regulatory action involving the DAO’s participants.
According to the Maker team, the Defense Fund was created after a vote on a Special Funding Proposal. The platform announced Wednesday that funds will be added into a multisig wallet to serve this purpose. This will then be paid in one lump sum.
MakerDAO’s $5 million defense fund
The platform states that the fund will have an initial contingency budget in native DAI of $5 million and can be used to reimburse specific community members for legal expenses.
The Defense Fund will specifically include recognised delegates and core unit facilitators as well as permanent contributors. The primary beneficiaries include MKR holders who are active.
The Defense Fund is thus envisaged as “a self-insurance tool for MakerDAO participants.” However, those set to benefit (as listed above) must be facing legal action directly linked to their activities at MakerDAO, the platform added.
“All claims and payouts will be managed by an external technical committee composed of insurance and risk management experts. The committee will issue a recommendation to approve or reject a payout based on a claim,” read part of a statement posted on the Maker Twitter account.
Maker Protocol will manage the funds as part of the Defense Fund multisig wallet.
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