Binance is trying its hand at decentralized stablecoin governance.
The exchange joined the distributed oversight team that approves contracts and code changes on Equilibrium, a DeFi outfit behind the EOSDT stablecoin. EOSDT contracts hold nearly $10 million in collateral according to the Equilibrium website.
Announced Friday, Binance now has oversight power over new EOSDT smart contracts. As a party to Equilibrium’s multisignature hierarchy, Binance will grant – or conceivably withhold – its approval to all contracts prior to release.
That authority had been exclusive to block producers EOS Nation and EOS Cannon. Now, it also includes Binance and fellow newcomer eosfinex, the decentralized exchange developed by Bitfinex.
“You can also consider it as establishing a four-eyes principle for Equilibrium’s EOSDT,” Equilibrium CEO Alex Melikhov told CoinDesk. For any one transaction to take effect, at least two parties must first give their okay.
In doing so, Melikhov said the four give EOSDT updates the weight of their reputation.
“Instead of a single owner who can potentially do whatever they want there is a group of reputable and known ecosystem participants who bid their reputation on the integrity/relevance of these updates,” he said.
That involves more than just rubber stamping public proposals. According to Melikhov, Equilibrium will give a “detailed audit report” to the four before release. They will also conduct their own independent reviews, he said.
“So eventually the community and users can be 100% sure that the smart contract owner cannot deploy malicious code or simply transfer funds out,” he said.