Walkers has advised longstanding client Maker, the leading software development team that bootstrapped the well-known Ethereum-based decentralised finance (DeFi) protocol, on a restructure which resulted in operations being fully turned over to the Maker Decentralised Autonomous Organisation (DAO).
DeFi allows financial products to become available on a public decentralized blockchain network. That makes them open for anyone to use, rather than relying on financial intermediaries, like banks. In addition, the MakerDAO protocol allows users the ability to execute the kind of complex functionality required by modern finance applications.
The MakerDAO protocol was initially fully decentralised. In 2018, members of MakerDAO decided to house some protocol development within the Maker Ecosystem Growth Foundation (MEGF), one of the first Foundation Companies to be incorporated in the Cayman Islands. Now coming full circle, the road back to decentralisation has been completed, the operation of the protocol has been entirely turned over to the DAO, which already managed the protocol by vote, and MEGF has been dissolved.
International law firm Skadden, Arps, Slate, Meagher & Flom LLP acted as lead counsel to Maker, with Walkers acting as Cayman Islands counsel. The Walkers team, led by Cayman Islands Partner Melissa Lim and Dubai Senior Associate Tom Hagger, with assistance from Cayman Islands Partners Lucy Frew, Monique Bhullar and Peter Kendall and Cayman Islands Associate Christian Bourke, have been advising Maker since 2017.
The Maker Foundation's former General Counsel, Brian C. Avello commented: "Since its founding, Maker has always navigated uncharted waters. Establishing MEGF, completing its limited development mission, dissolving the foundation company, and leaving the protocol fully in the hands of the MakerDAO community has been a challenging experience to say the least. None of it would have been possible without the insights and guidance from Melissa, Tom, and the rest of the Walkers team."
Melissa Lim commented: "This is a truly ground-breaking transaction and one which we believe sets a precedent in the market for other similar protocols seeking to work towards a fully decentralised model. MakerDAO is at the cutting edge of what can be achieved with blockchain technology and we fully expect to see other projects follow the same route to decentralisation."
"We are delighted to have worked with the teams at Maker and Skadden over the years to reach this conclusion."