- Makerdao is going to create the defence fund with a first 5 million dai.
- The fund acts as a self-assurance tool and will only cover specific makerdao participants' legal defense expenses.
- The funds will be secured in a multisig portfolio, the protocol of the manufacturer taking control as beneficiary.
MakerDAO, the decentralized autonomous organization (DAO) that issues the Dai (DAI) stablecoin and governance token Maker (MKR), has announced the launch of a new fund to be utilized in the case of legal or regulatory action involving the DAO’s participants.
The defence fund was set up following a governance vote on a special financing proposal, said the team of manufacturers. As a result, funds will be added to a multi-ig portfolio to this end, with this fact in a single lump sum, the platform revealed on Wednesday.
MakerDAO’s $5 million defense fund
According to the platform, the fund will initially have a contingency budget of $5 million in the native DAI and be used to reimburse legal expenses incurred by specific community members.
In particular, the Defence Fund will cover recognized delegates, primary unit enablers and permanent contributors. Active holders of MKR are also part of the primary group of beneficiaries.
The Defense Fund is thus envisaged as “a self-insurance tool for MakerDAO participants.” However, beneficiaries (as stated above) face legal action directly related to their work 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.
The protocol manufacturer will check the funds as one of the parties to the multi-ig portfolio of defense funds.