✅ All code is open source
✅ Critical logic requires tokenholder vote to modify
✅ Never critically hacked or exploited
❌ Whales dominate voting
Whale tokenholders could, potentially, collude to modify the core logic to drain funds. However, all activity would be public in nature, changes would be held by a timelock contract, and the community could vote for an Emergency Shutdown to prevent changes from going into effect.
Compound and Maker have much in common as far as their governance approaches go. Both rely on token holders to make key decisions regarding the smart contract ecosystems, and both allow executable code to be proposed. Both also have questionable token distribution and weak participation relative to their overall user base.
Maker falls a bit short in certain areas of transparency where Compound has stepped up - namely Compound’s easy-to-access timelock page, as well as a clear list of top token holders. Compound also offers users an easy delegation system, where Maker still does not.
Additionally, MakerDAO has an Emergency Shutdown Module, which makes it seamless for MKR holders to shut down the entire smart contract system. While this would be incredibly useful in a worst-case scenario, it also requires a good amount of trust in token holders to act reasonably and responsibly.