MakerDAO Founder Proposes Dedicated Blockchain and New DAI and MKR Tokens
Rune Christensen outlines roadmap for controversial Endgame plan.
By: Samuel Haig • Loading...DeFi News
Rune Christen, the founder of MakerDAO, wants the DeFi stalwart to roll out a new stablecoin, governance token, and even a whole new blockchain, in an update to Maker’s controversial Endgame roadmap.
Per a May 11 governance proposal, Christensen said the new governance token would redenominate MKR at a ratio of 1,200-to-1, that Maker should mobilize surplus assets to provide on-chain liquidity for the new stablecoin, and that the project’s future dedicate blockchain, or appchain, would be secured by Ethereum.
The proposal comes as Maker prepares to dramatically restructure per the Endgame roadmap which will reorganize MakerDAO into a series of specialized subDAOs or “metaDAOs.” The new Maker tokens allow users to farm subDAO tokens and participate in metaDAO governance.
“[MetaDAOs] build their own unique governance processes, enabling rapid parallelized growth, specialization, and decision making,”
Christensen said. “By delegating day-to-day complexity to SubDAOs, MakerDAO significantly streamlines the workload and complexity that Maker Governance needs to manage.”
Christensen said the new tokens will allow Maker’s ecosystem to converge under a single cohesive brand, addressing the siloed branding created by its existing DAI and MKR tokens.
Users would be able to wrap DAI and MKR into the new tokens, with new names still to be determined, or unwrap them free of charge at any time.
MakerDAO is the second-largest DeFi protocol with a nearly $7B total value locked, according to The Defiant Terminal. Users mint the DAI against collateral assets deposited to the MakerDAO protocol. DAI is the fourth-largest stablecoin with a capitalization of $4.7B, according to CoinGecko.
However, many community members criticized Christensen for mobilizing an outsized share of votes via governance delegates, with Christensen swaying the outcome of the Endgame Constitution by allocating 65% of all votes cast.
Christensen’s latest proposal said the Endgame roadmap will roll out over five phases, starting with MakerDAO rebranding, deploying its new tokens, and launching a new website.
Maker would launch a native farm for its new governance token (referred to as “NewGovToken” for now) and emit 10M NewGovToken each year — the equivalent of 8,333 MKR per year (roughly $5.3M). The protocol would block VPN and U.S.-based users from accessing all farming and yield opportunities for the new tokens.
The Maker protocol would provide large volumes of its new stablecoin (“NewStable”) and DAI to seed liquidity on major decentralized exchanges.
The protocol would also accumulate LP tokens for NewStable/NewGovToken using surplus protocol assets exceeding $50M.
“The goal is to deploy enough assets that NewStable will have more on-chain liquidity than DAI from the moment it launches,” the document said.
Maker would also earmark incentives for projects that integrate support for NewStable.
Christensen plans for Maker to roll out its first six SubDAOs during the second phase of Endgame’s rollout.
Endgame will reorganize MakerDAO into a series of specialized subDAOs or “metaDAOs” with their own tokenized governance. Maker hopes the restructuring will align governance while negating Maker’s increasingly complex operations.
“By delegating day-to-day complexity to SubDAOs, MakerDAO significantly streamlines the workload and complexity that Maker Governance needs to manage,” the document said. “The primary tasks of SubDAOs include user acquisition and maintaining decentralized frontends.”
Maker would also launch yield farms for metaDAO tokens, issuing 35M native tokens for each subDAO to users staking NewStable or NewGovToken annually. The initial tranche of metaDAOs include two “FacilitatorDAOs” and four “AllocatorDAOs.”
AI-Powered Governance Tools
Christensen said Maker would ramp up development and use of “production-grade AI tools for governance monitoring and improvement” during the third phase of Endgame’s rollout.
Phase three garnered mixed reactions on Maker’s governance forum, with Flipsidegov challenging the consistency of AI systems.
“AI tools have very large fidelity issues, especially with strongly formalized systems,” Flipsidegov said. “Recommending later developments not to be contingent on AI development being where it needs to be for this to work.”
Christensen replied that AI won’t run governance, but would be used “as a redundant assistant tool that is especially optimized to help participants that are more on the periphery of the ecosystem.”
“Actual decisions should be done by domain experts,” he added.
NewGovToken would also provide token-gated access to Maker’s AI tools.
Incentivizing Governance Participation
In a move that sounds like Maker’s answer to ve-tokenomics, Christensen plans to incentivize long-term governance participation through a so-called “Sagittarius Lockstake Engine” in phase four.
NewGovToken holders can lock up tokens and delegate their voting power to an AI-informed governance strategy. Delegators receive a share of rewards equating to 30% of NewStable protocol income, but face a 15% fee on exit which is burned.
Christensen said Maker will launch on an Ethereum-secured Appchain during the final stage of the Endgame. Christensen said NewStable, NewGovToken, DAI, and MKR will continue to function normally on Ethereum despite Maker’s new chain.
Christensen said NewChain allows for hard forks, which are akin to software upgrades, to so that the protocol can more easily recover from “catastrophic governance disputes.”
“This provides a final level of governance security to users, businesses, and protocols that rely on the Dai Stablecoin and NewStable, which ensures even the most extreme governance attack scenarios will only have a minimal impact on their user experience, and will not put their funds or their stability at risk,” he continued.
Christensen added that Maker would “permanently enter the Endgame State” after NewChain goes live, preventing further major changes from being made to the protocol.
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