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April 3rd, 2019

Zandy’s Story

TL;DR: read the intro and skip to page 22

Currently, the Maker development team is going through its most difficult challenge that I
have witnessed during my 3.5 years with the project. Everyone agrees that these are some
of the darkest days yet. I always knew I wouldn’t be able to rest until the question of the Dev
Fund was settled once and for all, and now it truly hangs in the balance. If you’re reading this
and the project has not yet descended into chaos and legal shitslinging, then consider it my
last best hope to put the matter to rest. However, if you’re reading this and the conflict has
escalated past the point of no return, then consider this my public testimony of what
happened here and what could have been done to prevent an avoidable calamity. Over the
past few weeks, I’ve asked myself many times when the events that led us to this point first
started to unfold. I’ve now realized that I can only start my story at the very beginning. By
reading it, I hope you will understand this one simple point from which we can begin to build
a better tomorrow:

The purpose of the Maker Foundation was to formalize

existing social relations in the Maker community. It is
currently failing at this purpose and needs to be corrected
at the fundamental level.

In the fall of 2015 I was 23 years old and busy preparing for the financial apocalypse. I didn’t
know anything about how “the markets” worked, and so became increasingly worried that
they could collapse at any minute without a hint of advance notice. I became interested in
ways to diversify my savings, and began researching how to vault gold over the internet. I
found an Israeli company that claimed they would keep custody of gold on my behalf in
exchange for the cryptocurrency Ripple. I knew enough about blockchains to understand the
basic premise but not enough to realize how ridiculous this proposition really was. I never did
get any gold from them… However in the process of trying to acquire Ripple, I wound up on
Kraken and began window shopping around the list of trading pairs. “Wow what’s XDG?
What’s LTC? What’s ETH?” I googled “ETH cryptocurrency” and found ​the video​ that would
forever change my life.

In it, a fresh-faced Stephan Tual describes the dream of the “Uber that owns itself.” A car
that autonomously ferries passengers around town and only charges enough to cover gas
and maintenance. As a young radical obsessed with the concept of mutual ownership, my
jaw hit the floor and I dove straight down the rabbithole. I never really talked about anything
other than Ethereum again after that day. Back then the Ethereum scene was so small that
every single project was listed on one website, and I began to devour each one until I
reached MakerDAO. The whitepaper described the premise of a stablecoin, making the point
that any interesting dapp would first need Dai to exist before it could succeed. As an
engineer I understood the concept of an “upstream problem” and so decided to start getting
involved, with the intention of moving on to the “Uber that owns itself” as soon as Dai was

I joined the first public Maker conference call a few weeks later and met Rune as he
announced the glorious start of the project as a real online community. There were four of us
present: Rune, James, me, and a stranger who never returned. Rune then introduced the
main character of my story: the Dev Fund. He told us that 9% had been reserved for him, 9%
for the technical co-founder Nikolai, and 82% would be owned by the DAO itself to fund
development (i.e. the Dev Fund). He said that he had been selling portions of the Dev Fund
in advance of the MKR token’s launch on Ethereum, and if you wanted any you could reach
out to him or wait for a public sale on the Maker forum. My first private conversation with
Rune was by DM, an expression of total blind trust, as I sent bitcoin to a complete stranger
and assumed everything would turn out okay. Because it has always turned out okay since
then, I’ve forever trusted Rune on some level since that first day.

I was definitely interested by Maker but I couldn’t stop thinking of the “Uber that owns itself”
and extending that thought further. In December of that year I had a breakthrough. I was
working at Amazon Web Services at the time and realized that in order for any interesting
technology to “own itself”, it would first need to own and operate servers. I was lit aflame by
this realization and resolved to create a company that would enable autonomous server
ownership to become reality. Years later I now understand that what I was thinking of at the
time was a consumer cooperative for IT resources, or a way to mutually own a datacenter. I
had no such vocabulary at the time. However, I did know that such an organization had huge
implications, was a main part of my destiny, and needed Dai to function properly. My resolve
to make Dai work strengthened.

In January of 2016 I met my first blockchain enthusiasts and serendipitously discovered that
Seattle (where I lived) was actually a center of Maker activity. Kenny Rowe ran our Ethereum
meetups and helped me get more involved in the Maker community. We both eagerly
awaited the launch of MKR token. I later learned that during this same time, Nexus
Development LLC (exactly one year later renamed to DappHub LLC) was officially
incorporated. Rune and Nikolai had been having trouble working together since the earliest
days of the project, and so Rune suggested that Nikolai form his own company as a way to
keep their relationship separated and hopefully professional. From that day on DappHub has
forever remained a place for misfits and weirdo genius Maker contributors that Rune can’t
quite understand. The whole community eagerly awaited as the core devs worked steadily
on launching the MKR token.

The token was launched in February and this began a new chapter of the project. At this
early time, not just Rune, not just an executive team, but literally anyone could potentially
access the The Dev Fund. Remember, Rune first announced that Maker would be a real
online community and we were exactly that. The multisig was entrusted to a group of early
contributors (I don’t remember who exactly), and we established a nice rhythm in the
community around the Sunday governance meeting. Back in those days the basic principles
were “full consensus” and “show your work.” Every Sunday, anyone could get on the
governance call and announce work that they had done the previous week to help advance
the project. Earlier contributors were on hand to offer advice to newer contributors and
suggest priorities, but there was no formal organization of work. If someone had done
something, they usually linked to the GitHub commits that showed that work.

At the end of the month, people publicly posted in the Maker Forum a summary of the work
that was done and their bill. Then in the governance call the participants would check that
everything looked good and approve the payout. Rune was entrusted to sell MKR on behalf
of the fund and process the payouts to developers. Anyone could raise a concern that would
need to be addressed before the proposal was approved, but generally the process went
smoothly during the spring. I’m not exaggerating when I say that anyone could walk right in
off the street and start contributing in this way, as this is when Rain appeared and started
pseudonymously working, participating in the governance calls, and getting paid. He never
saw a need to reveal his legal name back then and still hasn’t to this day. The core devs of
Nexus were given a budget of $20,000 per month to spend at their discretion, which was
always distributed equally among all the members. I want to stress that in those days,
everyone was fully trusted and all work was easily verified. This spring is remembered as a
golden age of Maker creativity when many important technologies emerged, such as Maker
Market (later renamed to OasisDEX) and ​seth​. I know that one could attribute this
“egalitarian spirit” to the project being young, and not yet “serious”, but bear in mind, ​that it
was not just the technology that drew creative contributors to Maker, but the atmosphere of
trust, transparency and self-organization.​ Many contributors joined with the expectation that
the project would continue this spirit of online community as​ t​ hey all worked together​.

During this time I became truly obsessed with Maker and began to start making plans to
contribute. I contacted Nikolai and told him I was a dev who wanted to help out. “Okay what
do you want to work on?” he asked. “Governance,” I replied without hesitation. He began to
teach me the principles of smart contract development over the next few months as I
brainstormed how to solve the problem of MKR voting. I was blown away by how savvy he
was and thought he was probably the smartest person I had ever met. I spent many days at
my job staring out the window thinking of voting on the blockchain instead of doing my
assigned work, and all I wanted to do was impress Nikolai during our long conversations
about the topic. I was so interested in blockchain governance that I made the
#dao-bootstrapping channel in Maker chat to discuss the topic in general, where I met the
other early DappHub contributors. This was how I first became well-known to the overall
Maker community.

As summer approached our troubles began. First, the members of the earliest multisig
decided that they weren’t adequately online enough to perform their duties of Dev Fund
administration and additionally began to seriously fear the potential liability associated with
the position as well. Back then the government had not acknowledged the existence of
Ethereum, much less Maker, and we had no idea if we were going to be arrested in the
middle of the night for even thinking about making an international stablecoin. It was decided
that we needed a new multisig with new members who had more availability, jurisdictional
diversity, and comfort with uncertainty. Unsurprisingly, most contributors at this point were
not interested in taking on such a role, and it took some time and convincing to arrange the
courageous members who served from June of 2016 until January of 2018: James, Kenny,
Ryan, Daniel, Bis, and me. I was honored to be included but wondered what was in store for

In June, just after the development team narrowly avoided the same bug that ruined
TheDAO just weeks before, we reached the limits of fully-transparent and full-consensus
governance-call-driven decision making. We needed to sell MKR for ETH on Maker Market,
and during governance calls we would deliberate on what specific price to sell at. Naturally
as soon as we had deliberated on the record, all buyers moved their bids to lower prices
expecting this selling pressure, such that there were 0 bids above the chosen price by the
time we went to sell. The next week we would have another call and decide to lower the
price a bit and try again. The buyers would move their bids down again and we would repeat
this cycle. This continued for the entire summer as we unwittingly moved the market
downwards week after week. We could see it wasn’t working but didn’t know what else to do
as a fully-transparent DAO.

During the summer the DAO started to run low on money and began paying developers
partially in MKR. Whenever the DAO would fail at its trading strategy, Rune would eventually
step in and trade just enough of his own crypto for MKR from the Dev fund to allow the DAO
to cover its liabilities. This system got us through the summer but it wasn’t sustainable.

I had no idea that any of these problems were threatening the project and was just happy to
be included with such smart developers. I published an article describing my ​proposed
voting system​ in July and found it well-received by the community. I was beaming with pride.
Soon after, Nikolai reached out and asked if I wanted a job working on Maker for Nexus
Development. I immediately accepted and made plans to go full time on the project in
August. I had never been more excited but had no idea what I was getting myself into.
Shortly before I was due to start, Nikolai asked me, “hey zandy, do you have any experience
with management?”

“Sure,” I lied.

“Great, we’re in need of a business plan if we’re going to raise any money from investors.
Can you flesh out a business model and document it for us?”

“Oh yeah totally I can do that. I’ll get started on it right away”
From that day onward I began to slowly step into the role as the de-facto leader of DappHub.
I realized that this task was the sort of thing a CEO does, but I wasn’t too worried about it
because this seemed to be a peer-based organization founded on the principle of mutual
respect, and we could figure out titles later anyway. In any case, I had more pressing
concerns because Devcon 2 was approaching in September.

At this point Rune had begun to distance himself from the project, and so the Maker
community was wondering who was going to speak on behalf of the project in Shanghai.
Because I had experience with public speaking and stage acting in the past, I volunteered. I
knew that if I did a good job then my reputation in the project would grow quickly and I could
make a bigger impact down the road. I delivered a ​coherent talk​ in front of the largest crowd
I’d ever addressed and the Maker community congratulated me on my good work. Again I
was beaming with pride. However it wasn’t enough to stop the continuous slide in the price
of MKR. We completely ran out of money soon after Devcon and started to accrue tens of
thousands of dollars in backpay. I realized that the project was gasping for breath and within
an inch of its life. Something had to be done to restore investor confidence.

Right after Devcon in October of 2016, Rune became much more absent from the
community. I decided to step up and make some key decisions to save the project. First, I
published a ​retrospective blog post​ outlining what we had achieved in the past year and
promising more transparency as a development team. Then Ian Harvey suggested we
publish a roadmap and he came together with Nikolai, Geronimo and me to create one. It
was the publication of ​this roadmap​ that stopped the selloff of MKR and saved the project
from a total loss of investor confidence. We released it in early December and the bleeding
stopped through the holidays.

At the same time, I worked feverishly to get a Nexus Development business plan created
that incorporated both Nikolai’s ideas (make an open source software suite and sell
consulting services on top) and my own (make a blockchain infrastructure provider that could
eventually grow into my “servers that own themselves” dream). I showed it to a few investors
and they laughed in my face when I told them our desired valuation. I decided that maybe
venture capital for Nexus was more trouble than it’s worth. Full ownership by the workers
seemed like a better idea to me, and I started to think about how to optimize for it.
Also in early December of 2016, Polychain Capital announced their fundraising round from
the most prestigious investors in Silicon Valley and that they would be allocating their capital
in the Ethereum ecosystem. This was one of the most exciting turning points in the history of
the Ethereum and all eyes were on Polychain after that. The first person they reached out to
was Rune with the intention to buy MKR from the Dev Fund. This was the deal that would
eventually restore investor confidence in Maker and help us finally put our fundraising woes
in the past, but not before we were forced to navigate the largest Maker crisis up to that

Due to Polychain’s dialogue, Rune rejoined the community in earnest starting in January of
2017. He immediately focused on negotiating this MKR sale on behalf of the Dev Fund.
Because the Dev Fund and the Maker governance community were completely synonymous
at this time, it was understood that Polychain would need to make their final proposal
transparently in a governance call and have it ratified with full consensus by the attendees.
However the community understood how difficult it is to transparently sell MKR based on
their utter failure of the previous summer, and so they had no problem letting Rune hammer
out the terms first and then ratifying whatever agreement he came up with. This process
worked smoothly but it caused Rune to make an important realization that would change the
project forever: he needed to step up and take responsibility for his creation.

On Friday January 13th, 2017 Rune told me he needed to talk to me on Skype. I got on the
line with him and the first thing he told me was that he intended to make a proposal at the
Governance meeting the next Sunday, he had already gotten Nikolai to agree to it, and he
was coming to me next because I was the only other person who could credibly oppose it. I
raised my eyebrow a bit at this but listened on. He said that over the last six months he had
been distancing himself from the project intentionally to see if it could handle him pulling a
“full Satoshi.” He said he was thrilled that the Polychain deal came through just in the nick of
time, but the process of negotiating it revealed to him that the Maker dev team ​needed​ one
acknowledged leader to negotiate future private deals, resolve disputes and take
responsibility for the delivery of the project. He said that as the founder it should naturally be
him, but that I would make a great second-in-command to help professionalize the operation.
In over my head as I was, it was a relief to hear him say these things. However next he
detailed some more radical ideas.
He told me it was necessary that he have ​full unilateral control​ over the Dev Fund from that
point forward. There was no legal entity at the time, so this just meant retiring the Developer
Multisig. He said this was necessary to prevent drama and he must have the ability to veto
any decision at his discretion. He told me it was extremely important that the Governance
meeting award him an additional 10% of the total MKR supply from the Dev Fund to be his
personal property, as a vote of confidence in his leadership and a way to make sure that
MKR voting wasn’t overtaken by irrational voters. He promised he would use the proceeds to
finance the delivery of Dai in case of emergency and otherwise donate the majority to charity
after it was launched. He said he would refuse to act as the leader if he didn’t get awarded
this bonus. He told me that as his second-in-command he would reward me and that we
could work together to control the project and deliver on the vision of Dai. I was extremely
surprised to hear him say these things.

I told him first of all to please calm down about proposing this in two days at the next
Governance meeting. That would be hasty and unnecessary and we needed to flesh out his
idea. I told him that I seriously doubted his ability to spiritually transition the group to this new
paradigm without significant changes to it first. I said first and foremost if he was going to be
in charge of anything it would be a foundation or a trust with significant controls on his
authority. He exclaimed that was a brilliant idea and a great way to get the community on
board. I told him he was going to have trouble getting the community to agree to grant him
any significant bonus because it was crazy and that he’d better be ready to drop that idea. I
told him to knock it off with the conspiratorial language and loyalty oaths because it was
obviously going to make people nervous with the whole idea. I told him to say "we're
transitioning the Maker Fund to a non-profit corporation" not “I need to take control of the
project.” He said alright he would take all that into consideration. I said whatever you do
please​ don’t bring this up on Sunday. He promised he wouldn’t and said he was relieved he
had my support.

I decided to skip the Governance call that week and go skiing on Sunday. About halfway
through my day I started to get the first frantic DM’s from people. They were asking me if it
was true that the governance meeting was cancelled and they were shocked at the things
Rune had been saying that day. They told me they believed in the dream of the DAO and
this new reality made them sad and disappointed. I stood in the snow and sighed because I
knew this would be a long week. Rune’s opinion when I told him that he made a terrible first
impression was that it didn’t matter if people’s feelings got hurt as long as he achieved what
he set out to in the beginning. I reached a turning point then as I seriously started to consider
that maybe I had misjudged Rune all along.

The next week was one of the most tense of my life. All the important contributors and the
multisig members came together and agreed that we weren’t going to let Rune push us
around like this. The multisig members knew that we had a duty to the community to protect
the funds from exactly this kind of behavior. We had to find common ground and make
peace. We had to get Rune to take back his rash words. I called him and told him something
that I believe changed his mind for the better. I told him that if he had asked me two weeks
ago, “should Rune be the leader of the Maker development team” I would have said one
thousand times yes. However the only thing that was making me not want to go along with
the idea ​was the fact that he created this crisis with unnecessary hostility and the harsh way
he was handling it thus far.​ I fervently hope Rune is reading this essay as it’s the same thing
I want to tell him right now. A few days later Rune saw the light and he dropped all his
demands. He apologized on the Governance call and promised that they weren’t cancelled.
The community forgave him and we put it in the past. We all got started on creating the
Maker Foundation, a challenge that would last for the next two years.

The spring of 2017 was peaceful and lucrative. Against the backdrop of the start of the ICO
bonanza, the Dev team underwent another flurry of creativity. We released the ​Purple Paper​,
which was our beacon to other turbogeeks that we were working on something interesting.
We invented a new command-line tool called ​dapp​. In a flash of inspiration, Nikolai
conceived of Single-Collateral Dai (SCD). We finally had something that we could
realistically imagine deploying that year. Work began on it in earnest. Investors wanted as
much MKR as they could get, and we started to redeem the months of accrued backpay. Life
was still volatile but we were in this together again. These were the conditions when Matt
first appeared.

At first he seemed innocent enough. Attracted by the Polychain news, he said he had a
background in marketing and offered to help. This was historically our weakest competency,
so we were thrilled to have him contribute. I asked him to work with our designer Cass on a
new marketing website. The troubles between them began almost at once. Cass was going
through numerous personal tragedies and was completely unable to be productive. Matt
tried to work with him at my behest but got more and more frustrated. Cass found the work
impossible to manage and soon withdrew from the project. In retrospect I think Matt was
right that it was an unfair working environment for him, but at the time I treated this as a
canary in the coal mine and started to watch Matt more closely.

Over the summer he found other contributors to help with the website and we soon moved
past the conflict. Most of the dev team converged in Berlin and worked together on SCD.
Berlin is beautiful in the summer. It was some of the happiest months of my life. I became
extremely close with the other DappHub developers and felt like I had finally found a circle of
friends that understood me. In the spring I had convinced the DappHub team to officially
designate me as their CEO and so I spent most of my time trying to figure out how to
reorganize the structure to best match our needs. I researched cooperatives, mutual
societies, guilds and unions, the Hollywood model, and self-organization. We brainstormed
for hours about what we even had in common with each other to start with. All I wanted was
to work on my mutual server ownership idea, but I knew I had to figure out a coherent
structure for us first.

Matt said he wanted to come to Berlin to meet up with me. I said sure but didn’t think too
much about it. When we met he told me that Maker was at an extremely critical turning point.
He said we weren’t growing because we were afraid to hire and we weren’t delivering
because we were afraid of creating the proper structures. He said he, Rune and I should
work together to usher in a new era of productivity because if we didn’t then the competition
would come and replace us. He said we had gotten far too complacent and assured of our
own success. I told him to please relax and that I had better things to do than become a
manager in his corporate ideology. He didn’t like that at all, but I smoothed things over by
promising to help him understand the technological side of the business and to treat his
ideas with respect. We parted ways, but not before he promised me that the project would
see greater structure and accountability if he had anything to do with it. I could tell that Matt
was generally a good person, but this was when I decided that I didn’t like working with him
very much.

After Berlin, I went to Prague with Daniel and we attended the Hacker’s Congress at
Paralelní Polis. This gathering is meant for self-styled cryptoanarchists and revolutionaries
only, so we each received a large dosage of political ideology during our time there. Late at
night, with a flash of inspiration, we both realized that DappHub was always meant to be a
cultural schelling point before all else. A signal to attract anyone interested in hacker
aesthetics, development tools, Free Software, grassroots empowerment, memetics, the Unix
Design philosophy and especially the political implications of decentralized technology. We
realized that the structure was secondary to this cultural identifier, and that we already had
what we needed to find common ground as a collective. We created the current DappHub
website that night to commemorate this revelation.

By fall, we were all grinding away towards the end of the year. Matt incorporated a company
called Igneio and began hiring many of the leaders that are with us today. He spent most of
his effort at Maker working to structure and staff our various functional groups. His work ethic
was truly awe-inspiring and it felt like he was interviewing one hundred people every week.
Since the talent that he eventually found was top-notch, he made many important positive
contributions to the project during this time. I spoke on behalf of Maker to ​announce the Dai
launch date​ at Devcon and gave a talk about ​DappHub’s newly-discovered philosophy​ as
well. We all celebrated the top of the ICO market together in the tackiest place in the world:
Cancun. The dev team, led by Rain at this point, gave one last monumental push and
launched Dai on December 17th, 2017. The next chapter of the project began.

After a well-deserved holiday break, the drive towards Multi-Collateral Dai (MCD) began in
January of 2018. Like every previous January, this marked a major turning point in the
lifecycle of the project. A few different things happened to mark the transformation. First,
Matt approached Rune and I and pitched us on a plan to restructure the development effort
as a traditional organization. His idea was to formalize his own role as President of the
Maker Foundation, Rune (who loved the idea) would from then on be the CEO and he
wanted me to formally become the CTO. He said while he hoped I would take the job, he
would hire a CTO if I refused. At this point, I was certain that Matt hiring a CTO could not
end well, so I took on the role as a defensive way to protect the developers from arrogant
managers with no context. I would be lying if I said the large MKR bonus that Matt promised
me as part of the job didn’t help to convince me as well.

Next, Matt convinced Rune that we were indeed growing complacent and that it was time to
“grow up” and start acting like a proper business. One of Rune’s first acts was to send Rain
an employment contract for the remaining MCD work, just as he was coming back online
after recovering from the exhausting push to launch SCD. Rune didn’t think too much about
the abruptness of this context-shift, so the contract he chose to send was aggressive and
clinical in the same way that all standard corporate contracts are (I’m convinced it was just a
downloaded template from the Internet). Rain was completely blindsided. When he went on
break at the end of December, he was working for a fully-open consensus-driven
international community. When he returned in January, he was handed a legal contract and
expected to act like an employee of Rune’s new corporation. His suspicion of Rune’s
intentions went from low to extremely high in that one instant, and I don’t think he’s ever truly
relaxed since then. Rune went on to announce this change of heart in the next Governance
call and ushered in what I have called the “fake urgency” era of Maker. Just like the previous
January, he was harsh and blunt and didn’t much care about the effect this had on people’s
feelings. Morale among the core developers began to slowly slide. The DappHubbers had
made plans to meet in Portugal in February to “finish MCD,” and I hoped that we would
figure out this negativity then.

When I got to Portugal, I discovered that none of the DappHubbers were interested in
slightly modifying the SCD code to launch MCD as soon as possible. Rather, they took the
lessons that they had learned from SCD and began an R&D cycle to build a powerful new
smart contract system from the ground up. It would be more flexible and specifically
designed with an eye towards formal verification. I knew this wouldn’t go over well with Rune
and Matt, so I asked, as a compromise, for an estimated timeline of the R&D cycle. That’s
when Rain first became suspicious of me. He didn’t like that Rune was now acting like his
boss and he had no idea if I was going to follow suit. He knew that in order to be creative
and successfully make MCD a reality, he would need peace and quiet to think and become
inspired. When I left for a few days on other business, he and the rest of the core devs left
Lisbon. When I returned, they refused to tell me where they had gone.

I was shocked and heartbroken. I thought these guys were my brothers and now I was being
excluded from their circle. I would have marched into hell by their sides, and they had
abandoned me without a hint of explanation why. I became extremely sad and realized that
they might not feel the same deep bond towards me as I felt towards them. This is when my
own morale began to slowly decline, but I didn’t realize how bad it would get until much later.

We eventually met back up in Portugal, but the relationship obviously changed from that
point onward. I could see that there were titanic fissures forming in the overall development
team, and so I asked to speak with Rune on the phone. I told him that Matt’s intention to
create a traditional organization was doing irreparable harm to the project and that he
needed to go. I told him that I thought Matt didn’t have any experience working in the finance
nor technology sectors, so it didn’t make sense for him to be the President of a fledgling,
remote-only, bleeding-edge fintech project. I told him that Matt was consistently a distraction
and wasted my time by proposing stupid ideas that needed constant rebuttal. I told him
Matt’s opinion that the core developers were “my developers” was preposterous and that I
refused to control them and get them to “report” to me like he wanted. I told him that Matt
had done a lot of good for the project but that it was time for him to go. Rune refused to
listen to me. He said that removing Matt at that critical moment would be far too destabilizing
and that no one was available to replace him. He promised that he would ensure Matt didn’t
annoy me anymore and that he would “stay in his lane.” He told me that the newly forming
business development team enjoyed working with Matt and wanted him around. I was
puzzled by this last point but assumed I must have been missing something. I temporarily
gave up trying to get Matt out and assumed I would revisit the problem later when the
opportunity arose.

A few weeks later I met up with Rune at an Ethereum conference in Paris and I tried a
different tact. I talked about democracy in the workplace and how important it was to me as a
concept. I said I felt extremely uncomfortable being in such a critical leadership position
without having been elected by my peers. I said that a blockchain project trying to disrupt the
global financial system obviously needs a bold and innovative organizational structure. I said
that the end goal here should be to mutualize the dev team into something that is owned and
operated by its workers. Again, Rune refused to listen to me. Again he said that such an idea
would be far too destabilizing and a distraction from the important work of launching MCD.
He said that it would just cause internal politics and constant drama. At the time, I was
dismayed but again I assumed that it was a topic I’d return to when the opportunity was
more favorable. Now, one year later, the development team is significantly destabilized;
internal politics has overwhelmed productivity; and I wish I had pushed harder for this idea
back when I had a chance.

The spring pushed on and my life got worse and worse. I moved to New York City, which
was exhausting. Containing Matt’s strategic ideas became a full time job and I spent most of
my days on the phone screaming at him about something. We grew to truly hate working
with each other during this time. Matt especially ​hated​ the concept of DappHub. He thought
it was an unprofessional arrangement and also seemed to feel personally insulted that they
wanted to remain an entity separate from the organization he was trying to create. He would
ask me countless times to explain to him why they felt culturally distinct from him and why
couldn’t they just be a part of the “family” he so desperately wanted us to be. I didn’t mention
it at the time, but I had told the DappHub developers to let me handle the business of dealing
with Maker because I knew they would only get stressed out by Matt. This advice ended up
being a huge mistake, as the core dev team was not around to object to the organizational
decisions he was making until it was far too late.

Rune eventually somehow got the idea that DappHub was plotting against him and trying to
center power around themselves and even take over the project. He told me that the only
way to prove there wasn’t a conspiracy was to stop working on DappHub altogether.
Meanwhile, Matt and Rune’s constant pleas for a timeline put me in a difficult position with
the core devs. They were already extremely annoyed about the shift in tone, which felt like
something they definitely had not consented to. When I asked Rain a few times over the
spring for a timeline estimate, he decided I was becoming a hassle as well and completely
stopped communicating with me. From their point of view, it had become impossible to run
an R&D program inside of Maker, and so for the good of the project they disappeared to do
the creative work that needed doing.

I was devastated by this abandonment. Fighting against Matt every day and knowing that my
best friends didn’t trust me or want anything to do with me was one of the most difficult
experiences of my life. I became plagued with self-doubt and felt more alone than I had ever
been. Matt planned an All Hands meetup in New Orleans and scheduled some time a few
days beforehand for he, Rune and I to engage in some group therapy. During these
sessions, we were finally able to get through to him that his sense of urgency was not
productive and was deeply harmful to overall morale in the group. I’ll never forget his wide
eyes as he realized that he was, in fact, the problem here. We came to a compromise on the
question of DappHub, as I promised to give Maker my full attention until the fall, when I could
then return to working on both projects at once. The actual meetup went very well and I was
pleased to meet all the other Maker contributors. The talent and great personalities I
encountered restored some of my faith in the chances of the team to navigate these
troubling times.

Although the group therapy in NOLA slightly alleviated tension, morale continued to decline
among the Maker team in the face of Matt’s misguided enthusiasm. After talking with many
different contributors, it became clear to me that most people agreed he was a good person,
but he wasn’t a good fit for his role. I knew that something had to change. The core
DappHub dev team, which ominously did not attend the New Orleans meetup, had made
plans to meet up in Barcelona in July. I just needed to push through until then and maybe we
could figure out what to do.

I had pinned all of my hopes on this meetup and when the day came I was nervously
over-prepared. Thankfully, Rain was in Barcelona a few days before and we were able to
have a heart-to-heart. He didn’t know much about the damage Matt had caused and was
relieved to hear that I was opposed to his worldview. We didn’t completely repair our
friendship then but we did stop the bleeding at least. I hoped that we would trust each other
again someday. When the rest of the devs arrived, I was overjoyed to hear that they were
confident that the R&D cycle was coming to a close. They said that there were no more hard
engineering problems left and that most of the remaining work was on verifying the
correctness of the code. They said that targeting a September release on the testnet was
realistic. On my part, I manically ranted about my vision for the future of DappHub and
everyone was so overwhelmed that they just chose to ignore what I was saying and focus on
Maker. I realized that, like Rune, I talk too much and too fast sometimes and that most
people don’t enjoy drinking from a firehose. Like many hacking-oriented meetups, it was
productive in 100 divergent ways and everyone left feeling good about the prospects of

Soon after the meetup ended, I was rudely awakened from my optimistic reverie by Matt’s
regularly-scheduled frustrations. One random day a few weeks later, I don’t remember why
this day specifically, I just reached the end of my patience with him. I called Rune and
presented my ultimatum: either Matt goes or I go. That was the exact moment that Rune
realized Matt had become a threat to the project. He was gone within 48 hours. I was
relieved in the same way that it must feel upon completing a marathon because I emotionally
collapsed after that call.

September was a flurry of activity. The core devs launched MCD on the testnet, with one
small exception. They hadn’t yet finished the Global Settlement module (affectionately
named Cage) and promised they would get to work and add it in sometime over the next few
weeks. On my end, not only did we close the Andreessen Horowitz deal and put Maker on
the map, but I had to prepare my most ambitious Devcon talk yet. I also didn’t want to lose
the opportunity to influence the organization in the post-Matt era, so I began deeply
researching alternative organizational philosophies. This is when I discovered ​Reinventing
Organizations​ and rejoiced. Look Rune! Look Maker team! We ​can​ have self-management in
the workplace! It works, this guy has case studies!! Rune was inspired but also skeptical. He
told me he really resonated with these ideas and promised we would experiment with them,
but he said he wouldn’t allow them to threaten the stability of the organization. I also fell in
love with a girl during this time and began to retreat from constant Maker drama by spending
more and more of my time with her. I didn’t realize that I was starting to burnout.

At Devcon in October, my burnout started to accelerate. I arrived in Prague and stepped into
a toxically distrustful environment. The DappHubbers were angry that the direction and
workstyle of the project had obviously changed without their consent or even notification,
and they had no idea if Rune was going to try to seize unilateral control of the Dev fund
again. Rune and Wouter were angry at the DappHubbers for their snobby attitudes and for
being completely absent over the spring and summer and making it nearly impossible for
them to do their jobs of preparing for the MCD launch. Everyone was distrustful of me
because they thought I was on the side that opposed them. I chose to ignore everyone and
focus on ​delivering my presentation​. I started to feel a strange disconnect where I rationally
knew that I ​should​ care about these people’s problems and work to fix them, but I was
emotionally out of gas and unable to summon the strength to actually care. It felt like being a
ghost and I now know that this is what burnout is. This feeling would last on some level
through to today.

The small strategy meetup that Rune had planned in Copenhagen for right after Devcon
spontaneously grew into a full leadership summit. I again pinned all my hopes onto this
being the meetup where we figure out these conflicts and resolve our differences. In many
ways, the meetup was extremely cathartic. Everyone got to air their grievances and
transparent conversation among the whole organization actually took place in
#general-internal. Transparent conversation is my ambrosia and it got me feeling pretty
good. Rune presented his Foundation Plan and the important differentiation between MEG
and Maker. The plan was rational enough to get tentative buy-in from the whole group. I
thought we actually might be able to pull this thing off. In the meantime however, a new crisis
was gathering on the horizon.

In December, Rune presented me with troubling news. He said that the existing temporary
corporate structure that had been created back in January ​absolutely could not​ be allowed to
finish the year without being decommissioned. If it closed the year in operation, then all of
our organization’s assets would be subject to taxation and our potential liability would be
enormous. He said it was an all-hands-on-deck emergency to get the MEG Foundation
created before the end of month or else the consequences would be catastrophic.

Because he sounded serious and also because I hadn’t recovered from burnout, I didn’t ask
too many questions and let him handle this situation. He convened the entire organization
and told them about the situation. He presented a document that outlined the core principles
of the Foundation and how it would work in general. He chose the most morally upright early
contributors to be board members to ensure that everyone would be satisfied, even those
who were skeptical of him. He and Brian moved heaven and earth to get this transfer
executed and I was impressed with how smoothly everything went. Rune said over and over
that the purpose of the Foundation was to formalize existing social relationships within the
Maker team. He said the goal was to change as little as possible, to ensure that the transfer
would go off without a hitch. Most people didn’t have enough time to think much about this
urgent matter, but decided that it sounded alright enough on the surface. Rune promised that
he would provide a strategic plan in the new year that outlined exactly what this organization
would work on. Rune worked around the clock until there were no more objections. The
transfer was officially executed at the 11th hour of the last possible day. We had narrowly
avoided catastrophe yet again, however the new organization had a fundamental flaw that
would inevitably lead us to the crisis in which we find ourselves today.

In January, I came off of holiday break somewhat healed from burnout and walked right into
what I would describe as a Mexican Standoff. The first time I talked to Rune that month he
told me that he was absolutely done working with Rain and Lev on MCD. He said that they
had promised to deliver the Cage Module a few weeks after the testnet launch in September
and they hadn’t yet done it four months later, while collecting a salary the whole time. He
said that he was not going to be extorted like this and wanted to do no more business with
them. He said that he was confident that some other smart contract developer could finish
the work instead. I told him to please calm down and that no one was trying to extort him.
They had gotten plenty of other work done in the fall and just didn’t get to cage yet. I told him
that he didn’t have to trust the devs, he just had to trust me and that I would take care of it.
He said I had one chance to fix this and get Cage delivered.

Next I went and talked to the core devs and asked them what was up with Cage. Rain
predictably said that they hadn’t gotten a chance to work on it yet, and that it would take a
few weeks to finish. I told him that Rune would feel really great if they would sign a contract
promising to deliver all the remaining work as they saw it. Rain said he didn’t like the last
contract that Rune has sent him a year prior. I said I would make sure this one was much
more respectful of their point of view. They said it was unfair that Rune gets to spend the
entire Dev fund on his strategic initiatives and they are getting tossed aside once MCD
launches like yesterday’s news. Why should Rune get to decide how the dev fund is
allocated when they took just as much risk and worked for years in uncertainty just like he
did. They said Rune shouldn’t be able to monopolize access to the Dev fund like that
because he isn’t a god and other people might have differing points of view or priorities. I
suggested a compromise.

I told them that we should make a new organization that sets itself up as the successor to
DappHub. We had purchased the domain that summer and so I suggested that’s
what we would call it. My idea was that this organization would focus on greenfield R&D
projects and bleeding edge technology, and would especially prioritize all the things that
originally brought us together: hacker aesthetics, development tools, Free Software,
grassroots empowerment, memetics, the Unix Design philosophy and especially the political
implications of decentralized technology. I said we should incorporate it as a cooperative and
completely adopt the self-management philosophy espoused in ​Reinventing Organizations​. I
told them that we could become an inspiration for the whole cryptospace and teach
everyone how to master these new organizational forms. I told them that I thought it was fair
for this organization to receive funding from the Dev fund just like MEGH does and we all
agreed. They were extremely skeptical that Rune would approve of this plan, but I told them
that they didn’t need to trust Rune they just needed to trust me and that I would take care of

I went to Rune and presented this vision of Dapp.Org as a way to simultaneously get all
these rebellious weirdo geniuses out of his hair and get the rest of MCD delivered smoothly.
He loved the idea and promised that he would help endow Dapp.Org with a modest grant
and make this a reality. He explicitly said that he was basing his faith in this organization
entirely on his trust in me and that he wanted to ensure that I’m as happy as possible, as a
way of saying thank you for everything I’d done for the project over the years. I was quite
touched and felt proud of how much Rune had matured since I first met him in 2015. I was
finally​ about to create an environment where I could focus on mutual server ownership, after
over three years of waiting and working on Dai. I could see the finish line in the distance.
Some of the DappHub devs created a new special-purpose entity called Formal Professional
Services (FPS) for delivering MCD and signed a contract with MEG outlining the scope of
work and terms of engagement. Trust was finally starting to get bootstrapped again. People
were working together and momentum was growing. I asked Rune when we would work out
the details for the Dapp.Org grant and he said to wait a little while until MEG’s first-pass
accounting work was complete. While waiting I took some much-needed time off to relax and
pursued some of my own nerdy hobbies. I didn’t realize that tension was building up under
the surface yet again.

The FPS devs were always extremely skeptical that Rune was actually going to give a
generous grant to Dapp.Org. I told them to stop being paranoid and just trust the process. I
said Rune is a good man who will stay true to his word. In the meantime, Rune started his
weekly series of proclamations about how things were going to work at MEG from now on.
True to form, he monologued every week on Monday in the All Hands call for over an hour
and left the room blinking at him in confusion at the end of each session. He took their
stunned silence for approval and always carried on. He presented two choices to the
development team: the Red Pill or the Blue Pill. The Red Pill was working for him in MEGH
on the initiatives that he was going to eventually document in the much-promised Strategic
Plan. The main focus was on government compliance and integration of Maker into the
existing global financial system. He said that this option came an MKR reward and stable
employment. The Blue Pill was for people who didn’t want to work on those initiatives. They
could simply deliver MCD and then their relationships with the MEGH would cease
afterwards. These were the binary options presented and obviously neither included a space
for anything that resembled Dapp.Org. The FPS devs grew even more skeptical that Rune
would keep his word.

Meanwhile, other members of the organization were also getting uncomfortable with this
stark binary option. Ashleigh started to wonder if it was smart to bet all their funds on one
entrepreneur’s vision like this, and she didn’t understand how the Dev fund would be used to
grow the ecosystem if all the money was going to be invested in one organization. When she
met up with some of the DappHub devs in Paris at the end of February, she realized that
they shared her concern. A Signal chat group was created to discuss this topic, the name
Purple Pill was chosen because the hope was that there was a third way available to break
up this binary choice. They thought this was an earnest attempt to add resiliency to the
overall Strategic Plan. They didn’t realize at the time that this could be seen as actually
questioning the legitimacy of the Foundation itself. They didn’t realize that they were setting
out to answer a question that was first asked in January of 2017.

As the Purple Pill group was getting started, tension was also growing on the Foundation
board. Rune had sent a request for a large amount of MKR that he needed to fund and
expand operations, and he was surprised to discover that the board was pushing back on
the request asking for more transparency and oversight. Rune promised he would get them
all of the documentation that they wanted later when it was ready, but that he needed the
funds now. The back and forth went on and Rune undoubtedly grew frustrated that he had to
“show his work” like this when he was just trying to do his job as best he could. Eventually
some board members suggested that they break up the request into smaller chunks that
could be distributed one at a time as Rune needed funds, which caused even more tension.
The question remained unresolved when the crisis began.

A few days before the crisis began, I asked Rune directly about the timeline for working on
the Dapp.Org grant. I hadn’t been paying too much attention to his All Hands proclamations
and wasn’t really aware of his Red Pill/Blue Pill dichotomy, so I was shocked when he told
me that there wasn’t going to be any more Dapp.Org grant. He said the funds weren’t there
and he needed every last cent of the $200M+ Dev fund to work on his strategic initiatives.
He said he hoped I would be able to make Dapp.Org a reality but it wasn’t going to be with
money from the Dev fund. I was so taken aback that I didn’t know what to say. I knew that
there was going to open rebellion when people found out they had been tricked like this, and
so I assumed it would be best to just revisit the topic when Rune was feeling more
comfortable and try to convince him to see reason. Many times Rune has told me something
ridiculous and come to see reason a bit later, so I had hope that he would come around this
time as well.

The Purple Pill group had grown in March. Many people were being added who agreed a
third way was desirable. Board members were even added to the group. No one thought
about the fact that they were board members, they just wanted to talk because these were
some of the most senior and respected contributors in the project.

“Why couldn’t the Dev fund give money to organizations outside of MEGH?” they asked.

“Because Rune says only MEGH can get funding from the Dev fund,” they realized.
“Well can’t we just change the Strategic Plan or even the mandate itself to allow for multiple
organizations inside MEGG then?”

The Purple Pill members didn’t realize how radical this idea might appear to someone else,
especially one with less context. Their assumption was that the Foundation should be
flexible enough to self-correct in this way. Their plan was to go to Rune and ask him what he
thought about this idea on Monday. On Friday all hell broke loose.

When Rune found out there was a Signal group privately considering the idea of modifying
the Foundation’s mandate with a majority of the board members present, there was only one
way he could interpret it: conspiracy. He was sick and tired of being demonized as the
corporate shill by the self-styled “cool kids.” He was sick and tired of being distrusted by the
board when he had served Maker faithfully for so long. He couldn’t believe that people would
treat him this way when he had broken his back working day and night for this project,
sacrificing his own personal happiness and health like so many other entrepreneurs do. He
had been under so much pressure for so long trying so hard to make this work that when he
discovered the group, he snapped. Conspiracy. Corruption. On the eve of his introduction to
the most awe-inspiring agencies of the United States government, he needed to protect the
project at all costs. The board was summoned for a meeting and the offending members
were fired. It gave him no joy, but it had to be done.

As it should be clear to the reader by now, Rune was not interested in protecting anyone’s
feelings as he executed this grim task. He called an all hands and publicly accused the
members of the Purple Pill group of both conspiracy and corruption, the most serious
accusations that can be given to any blockchain-enthusiast. The Purple Pillers were
completely blindsided. They had no idea how their good-faith proposal could be twisted into
this kind of narrative. All they wanted was to make the Foundation more flexible! They had
no idea that they were violating every traditional corporate norm in existence by privately
conferring with board members in this way. These were their friends from whom they were
seeking advice! On Friday and over the following days Rune refused to apologize for his
harsh words that had hurt so many feelings. He revealed that he thought “this wasn’t ever
supposed to be a real board” that actually provided oversight of his actions because “if he
had wanted a real board he would have hired actual executives, not IT guys who were early
to the project.” He refused to put the project at legal risk by engaging in open dialogue.
Morale plummeted. Fear filled the room with icy air. No one knew what would happen next.

There is a very clear way of asking the main question being argued back and forth here: is
this Foundation legitimate?

The executive team says of course the Foundation is legitimate because it was agreed to by
everyone back in December. You can’t just agree to a legal arrangement and then change
your mind about it later. The Foundation is legitimate because it is the natural expression of
Rune’s leadership, and the project has always been lead by Rune in one way or another.
Furthermore the executive team believes that this conversation is seriously misguided, as
the Dev fund won’t be worth anything if regulators come and shut the whole project down
while we’re all bickering.

The Purple Pillers say that of course the Foundation is illegitimate. It grants Rune full
discretionary authority to allocate the entire Dev fund, but that was specifically ​excluded​ as
part of the agreed-upon deal the last time Rune tried these shenanigans in 2017. They think
that they were bamboozled in December by the urgency of the moment and compare the
event to ​disaster capitalism​, which is when someone takes advantage of an emergency to
push through unpopular policies that would otherwise be opposed. If they wanted to modify
the mandate of the Foundation at all, it was so that it can ​become​ legitimate. The don’t want
to disempower Rune, they just want him to share in the wealth that they all worked so hard
to create.

My own opinion is that both points of view are correct simultaneously, which means that the
question must lack nuance in some way. If we add a modifier, now we arrive at the question
that I believe we should be asking: is this Foundation morally legitimate?

I think this is a far better question because finding consensus here allows us to avoid asking
the costly and possibly project-ending question of: is this Foundation legally legitimate?
I ​really​ do not want to find out the answer to that question right now. I want to save this
project instead. So, regarding the moral question:

I believe there is only one agreed-upon and accurate test

of morality in the Maker development community: that
which is inherent to the Dev Fund multisig signers.

The fact that the multisig members are uncomfortable with the current situation is the only
proof I need to make a moral decision. Therefore, I believe the Foundation is morally
illegitimate right now. With that established, we can start to course-correct.

Morality is all about the agreed-upon rules of behavior in large groups of people. What is
​ f bad behavior on both sides of
good behavior and what is bad behavior. I’ve seen ​plenty o
this conflict, but I want to talk to Rune specifically because he has undoubtedly served as the
leader of the project up until this point and is ultimately responsible for peace here.

Rune, I’m writing this to give you a chance to atone for the mistakes you’ve made during this
crisis. Like I said the last time we did this, if you had asked me three weeks ago: “should
Rune be fully-funded by the Dev fund to execute on his Strategic Plan?” I would have said
one thousand time yes. The only thing that makes me doubt your leadership right now ​is the
fact that you created this crisis with unnecessary hostility and the harsh way you’ve handled
it thus far.

Rune, everyone on this team loves you and your ideas. We all want to see you succeed and
support your vision for the future. No one is discounting all the hard work you’ve done. You
and I have literally grown up into adults working alongside each other, but this is not and has
never been all about you or me. This is a community. You are smothering the project by
monopolizing access to the Dev fund and refusing to trust anyone but yourself to make
funding requests. This is bad behavior.

You can save the project by accepting that there are fundamentally ​different types of people
in the Maker development community that want to create different types of organizations
with different priorities, ​and they all have a moral right to access the Dev fund.​ As long as the
raised proceeds always go towards the Guardians, then it is not irrational nor immoral to
have multiple ​peers​ in the Dev fund ecosystem. You can trust the discretion, oversight and
moral righteousness of the current Dev fund multisig.

You still have a chance to step up and admit you acted rashly here and apologize for all the
pain you’ve caused. You can still take everything back before it’s too late. I promise I
PROMISE this development community will forgive you with open arms. We have always
forgiven you. We will figure this out and then move on and get right to work on MCD and
everything you’ve always wanted will be yours. You will get to make the video game
company you’ve always dreamed of. You will be honored and respected. You will die with no
regrets. You just need to trust me one last time. I believe you will do it because you’ve
always done the right thing. That’s why I came here to tell my story.