Introducing Maker voting with Anchorage Governance, the most advanced and secure on-chain voting platform
Diogo Mónica, Co-founder and President
We’re excited to announce Anchorage Governance, the most advanced and secure institutional platform for on-chain voting. MakerDAO’s Maker is the first asset to be supported, and Anchorage clients who hold Maker will be able to participate in the upcoming Multi-Collateral Dai (MCD) vote on November 15th, as well as all subsequent executive votes. Given Anchorage clients’ significant Maker holdings, we expect this new feature to have a meaningful impact on future voter turnout.
Participating in on-chain voting is a high priority for institutional investors, as governance decisions may directly affect asset value in numerous ways depending on the asset. For example, some protocols allow voters to make fundamental changes to things like the blockchain’s consensus model, affecting the security and reliability of the network, which in turn may impact asset value. Governance decisions may also directly affect asset holders’ returns by changing things like the staking reward amount for Proof of Stake blockchains.
In the case of Maker, votes are regularly held to update the Stability Fee: when borrowers take out loans in MakerDAO’s Dai, they must pay interest on the loan in the form of a Stability Fee, using Maker. Once the Stability Fee has been paid, the Maker that was used for the payment is destroyed, which reduces the total supply of Maker and therefore can impact the value of the remainder. Higher Stability Fees mean more Maker will be destroyed per Dai loan. Given that changes like these can have consequences affecting all who hold the asset, institutional investors who hold Maker and any other assets with on-chain governance have a fiduciary responsibility to be good stewards of the assets they hold by voting on impactful governance questions.
“As an activist firm and institutional Maker stakeholder, it is our duty to participate in governance decisions that affect the DeFi ecosystem and digital credit markets. Anchorage is advancing institutional participation across the board, and now offers a seamless user experience for secure on-chain Maker governance.”
— Kevin Yedid-Botton, Principal, ParaFi Capital
Despite the strong desire to participate in on-chain governance votes, institutional investors have lacked a sufficiently secure means of doing so. This has resulted in some votes failing due to low turnout, which in turn constrains the ability of projects like MakerDAO to adapt to a changing landscape and make improvements over time.
“Institutional custodians must enable safe and simple participation. With on-chain governance for MKR, Anchorage has done exactly that. It’s important to the success of MakerDAO that Anchorage clients who hold MKR can vote easily and securely, and we look forward to increased asset holder participation as a result.”
— Rune Christensen, Founder, MakerDAO
About Anchorage Governance
Those familiar with Anchorage already know that our custody model is both safer and more usable than cold storage, and serves as the foundation for all crypto-native services that we support, such as staking and voting. But secure voting requires more than just online participation with offline keys.
One of the most critical issues institutional investors face when it comes to voting is verifying institutional intent. The client organization holds the Maker, not any individual employee, and therefore the custodian must ensure that a given vote reflects the organization’s wishes, and not just the wishes of an individual employee. So how do we verify institutional intent?
The answer is: the organization must vote on the vote. Anchorage uses a multi-user approval system for all sensitive operations, and this includes vote operations. When a user initiates a vote through our Governance interface, a valid quorum of their teammates must approve the vote operation before it can move forward. Each approval requires multiple forms of biometric authentication, and each client user must sign the voting operation with a unique and unforgeable cryptographic key. Anchorage Governance is the most advanced Voter ID system for institutional crypto investors.
On-chain governance is becoming increasingly common, with protocols like Tezos, EOS, Dash, and others all offering different governance models requiring active participation. Anchorage was built to meet institutional demand for custody that enables secure usability, and we look forward to Anchorage Governance adding support for many more assets in the future.
To learn more about Anchorage, please get in touch.
Services are offered either through Anchorage Hold LLC, a Delaware limited liability company and registered Money Services Business, or Anchorage Trust Company, a South Dakota-chartered trust company. Anchorage Hold and Anchorage Trust Company are not registered with the SEC. Services are not yet offered to residents of New York. Anchorage Hold and Anchorage Trust Company do not engage in the offer or sale of securities or digital assets, and do not provide legal, tax, or investment advice. Anchorage Hold LLC and Anchorage Trust Company are wholly-owned subsidiaries of Anchor Labs Inc., a Delaware corporation headquartered in San Francisco, California.
