MakerDAO Co-Founder Dies in Puerto Rico

MakerDAO co-founder Nikolai Muchgian died in Puerto Rico on the morning of October 28, 2022. According to official reports, he drowned after having been swept away by sea currents just off the beach behind Ashford Hospital in Condado.

Muchgian also served as the CEO of the decentralized app R&D firm DappHub. He is best known as a security researcher who insisted on auditing MakerDAO’s code to prevent a hack similar to the one that nearly destroyed The DAO. An exploit of The DAO led to the controversial decision to “roll back” Ethereum’s blockchain to restore the stolen funds to their rightful owners.

“A few weeks before the infamous hack of The DAO, the DappHub team identified the same recursive withdrawal bug in Maker Market, an experimental decentralized exchange that MakerDAO created to securely sell their token MKR,” he explained in public statements.

Some people doubt the official story.

Shortly before Muchgian’s death, a Twitter account belonging to him tweeted:

Sounds paranoid, doesn’t it? Some people did theorize that the CIA might be operating a sex trafficking entrapment ring based in Puerto Rico.

At least one person made a comparison between Muchgian’s death and controversial Bitcoin blogger Mircea Popescu’s death in June 2021. Pompescu was best known for his early blogging about suspected crypto scams, bigoted comments, and very public sexual lifestyle.

A Costa Rican news outlet broke the news of Pompescu’s death by drowning in a Playa Hermosa, Garabito, area that local lifeguards say is off-limits for swimming. If somebody connected to the CIA has been “whacking” crypto influencers, they seem awfully fond of making it look like they had an accident while swimming just off a beach.

Others hinted that it had shades of John McAfee’s death in jail as he awaited extradition to the United States. McAfee’s widow maintains that he was never suicidal and is fighting to get John McAfee’s body back.

However, these allegations are (so far) unfounded. So are rumors that Nikolai Muchgian might have been a pedophile.

Where does MakerDAO go from here?

If MakerDAO is a truly decentralized autonomous organization, it can survive the deaths of co-founders like Nikolai Muchgian. Its voters recently approved a deal with Coinbase for custody services for USDC.

However, it faces some controversy over the approval of a proposal backed by founder Rune Christensen. Referred to as “Endgame,” this proposal covers multiple Maker Improvement Proposals (MIP) like the launch of MetaDAOs and a new vault that could generate more revenue for the protocol.

MetaDAOs split voters into separate camps that will each focus on one separate component of the MakerDAO ecosystem.

An Endgame supporter, Flipside’s Avi Meyers, said about MetaDAOs, “They have the potential to break many of the inefficiencies that plague traditional organizations and DAOs alike in a novel, born-decentralized fashion.”

Critics disagreed, saying that, while it might be possible to put MetaDAOs in their own silos that don’t interact with one another much, they would remain irreversibly linked to MakerDAO.

Christensen claims the Maker Improvement Proposals in Endgame will make MakerDAO more resistant to any future attempts to force it to blacklist users by government agencies. OFAC recently attempted to sanction Tornado Cash-related addresses.

Critics of OFAC’s decision said the sanctions were too broad because hackers like North Korea’s infamous “Lazarus Group” are not the only ones that use Tornado Cash’s mixer. Soon after OFAC announced the sanctions, an anonymous Tornado Cash user sent ETH to several prominent Ethereum addresses.

The controversy around Endgame threatens to split the MakerDAO community into two camps known as “MetaDOAists” and “Constitutionalists”.

MakerDAO Token (MKR) currently sits at $884.81 – down a bit since news of Muchgian’s death broke, but not terribly so. Maker’s stablecoin, DAI, hasn’t melted down yet and still remains at roughly $1.00.