Summary:
• MakerDAO introduces NewStable and NewGovToken to enhance ecosystem participation and investment and encourage wider adoption.
• These assets will become part of the broader governance and staking ecosystem, which will improve profit opportunities on Maker.
• When ETH prices plummeted in 2020, leading to loan liquidations, Maker has yet to address crisis management issues in its Endgame announcement.
MakerDAO founder Rune Christensen confirmed that MakerDAO will launch the first phase of the “Endgame” plan in the summer of 2024.
The first phase of MakerDAO’s Endgame will lay the foundation for structural reform of the Decentralized Autonomous Organization (DAO) through the introduction of new tokens.
MakerDAO Evolution: New Token
These new tokens, codenamed NewStable and NewGovToken, will provide users with enhanced options to participate in and invest in the ecosystem. They are the second phase of the MakerDAO plan, which begins with a brand reveal to enhanced staking and liquidity mining opportunities.
MakerDAO has found success with its MKR governance token and DAI stablecoin. The price of DAI is kept at $1 through a mechanism that adjusts the fee to borrow DAI based on the number of tokens in circulation. Users must deposit a certain amount of ETH in the Maker Vault to receive the number of tokens determined by the stabilization algorithm.
In the Endgame scenario, DAI will serve crypto-native use cases, while NewStable will target broader mass adoption scenarios. The Lockstake Engine (LSE) will expand the protocol’s governance mechanisms and encourage ecosystem participation through crypto staking. Additionally, new low-cost bridges will improve blockchain interoperability.
Following its launch of Spark Lend, MakerDAO will also launch SparkDAO, a design known as SubDAO designed to enable real-world asset and perpetual exchange yields. The development of SubDAO will improve MakerDAO’s scalability in anticipation of new Layer-1 blockchains.
SubDAO will also provide sustainable liquidity mining opportunities and improve user engagement through its tokenomics.
The ups and downs of Endgame
After years of preparation in technology, legal framework and community building, the MakerDAO community approved the Endgame plan through blockchain voting in August 2022. The plan is a series of important structural changes implemented some ten years after its founder Rune Christensen conceptualized the organization.
Maker’s DAI stablecoin is among the first algorithmic stablecoins to use financial engineering techniques to maintain its peg to the value of the U.S. dollar. However, the project is threatened by the broader crypto market.
Users must deposit ETH to receive DAI as a loan with no fixed term. At the same time, when market conditions are unfavorable, such as what happened in 2020, the price of ETH can drop sharply. If the price of ETH drops sufficiently, users who have used ETH as collateral to lend DAI may face "undercollateralization" and trigger a wave of liquidations.
Liquidations totaled approximately $5.7 million as of March 16, 2020, raising the need for good crisis governance. In MakerDAO's announcement about its Endgame plans, it didn't go into detail about how the newly launched governance token will solve or improve the problems or failures encountered in previous projects, but MakerDAO founder Rune Christensen highlighted the rapid rise in the bull market The need for action.
"Some changes by initiating the fast-track process are necessary because we are not just preparing for a listing but also dealing with an ongoing bull market, which will require a faster pace of action," Christensen wrote.
After the Endgame proposal passed, MakerDAO’s Sébastien Derivaux questioned the objectivity of the MakerDAO project’s Endgame vote. He claimed Christensen influenced 60% of voting addresses. #Endgame #MakerDAO
