The self-rescue path of veteran DeFi projects: analyzing MakerDAO鈥檚 Endgame transformation plan

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The self-rescue path of veteran DeFi projects: analyzing MakerDAO鈥檚 Endgame transformation plan

Recently, MakerDAO announced that it will launch new tokens NewStable and NewGovToken. Among them, MKR holders can upgrade their tokens to the new governance token (NewGovToken, the exchange ratio is 1: 24000), that is, the new governance token in the ecosystem, and the stablecoin Dai (DAI) can be converted into the new stablecoin (NewStable). (Odaily Note: The names of the two tokens have not yet been revealed)

It is not uncommon for established projects to launch new tokens, mostly in the pursuit of change and new growth points. However, when well-known projects like MakerDAO take such actions, the impact behind them cannot be ignored.

According to the MakerDAO official forum and the latest developments, the news of MakerDAO launching a new token was released as early as last year. The issuance of new tokens is also an important part of the first phase of Endgames transformation plan.

The Endgame transformation plan was approved by a governance vote in August 2022, and was continuously updated and discussed during the period until the official announcement that the new token will be launched this summer. It is reported that Endgame is a major update to MakerDAO, designed to improve efficiency, resilience, and participation to expand the Dai supply to 100 billion and beyond. The key feature of Endgame is to make the ecosystem more prosperous through sustainable SubDAO token revenue mining, where SubDAO is a DAO ecosystem that leverages MakerDAOs infrastructure while maintaining flexibility and autonomy. There will be a SubDAO suitable for different groups of people, and Dai users can simply choose their favorite SubDAO and start mining the corresponding SubDAO tokens.

Odaily Planet Daily will start with the basic overview of the new token and elaborate on MakerDAOs Endgame transformation plan at this stage.

The first step is to launch a new token, and then build a public chain DeFi ecosystem with SubDAO as the core

One month after the unveiling of MakerDAO鈥檚 new brand, the new stablecoin (NewStable) and the new governance token (NewGovToken) will be officially launched, and Maker鈥檚 new ecosystem will run with new tokens. Before that, Dai and MKR tokens will remain unchanged, and users will have the option to upgrade to NewStable and NewGovToken; if they do not upgrade their tokens, they may not be able to participate in the new ecosystem functions. The official description states that Dai will focus on crypto-native use cases, while the upgraded NewStable will focus on mass adoption.

NewStable still operates as a stablecoin and can be converted into Dai. After its launch, NewStable can mine new governance tokens NewGovToken (not open to VPN users and users in the United States).

NewGovToken can also be converted into MKR tokens before the upgrade. Compared with the small supply of MKR, the supply of NewGovToken will be expanded. The official exchange rate is 1 MKR can be exchanged for 24,000 NewGovTokens. This move can reduce the price of governance tokens, expand the scope of governance, and attract more new users to participate in community building, thereby improving the decentralization of the project.

In addition to issuing new tokens, Endgame will launch the Lockstake Engine (LSE) staking protocol in the future. Users can stake MKR and NewGovToken in LSE to mine NewStable and the upcoming SubDAO tokens (including SPK tokens from Spark SubDAO).

It is worth noting that 30% of all protocol surplus income earned by the protocol will be distributed as NewStable rewards, proportionally to LSE users who choose to receive NewStable earnings. And the NewGovToken and MKR tokens locked in LSE pay a 15% exit fee when their tokens are unlocked; this fee is destroyed by the protocol and deducted from the initial Lockstake principal. (Odaily Note: The Lockstake engine is not open to US residents and VPN users)

After the launch of the Lockstake engine, NewBridge and Spark SubDAO were launched one after another, jointly achieving the goal of the first phase of the Endgame transformation plan launch season.

Among them, NewBridge will connect NewStable, NewGovToken and other Maker ecosystem tokens of the Ethereum mainnet to L2 (currently pending). NewBridge will support users to mine natively on L2, providing users with low-cost access channels.

Spark is a SubDAO in the MakerDAO ecosystem. Spark is an independent community with autonomy and a unique business model. SparkLend is Sparks main product, a lending platform where users can use crypto assets as collateral to generate Dai at a predictable interest rate and generate NewStable in the future.

In addition to SparkLend, Spark will also provide some new business capabilities:

  • RWA: Spark will leverage the RWA infrastructure built by MakerDAO to deploy capital into real-world assets to earn yield and improve risk-adjusted returns.

  • Perpetual Swap Income: In addition to RWA, Spark will also earn income from the crypto perpetual swap market, providing users with low-risk income opportunities.

The total amount of Spark tokens SPK is 4 billion, mainly from NewStable users staking on the Ethereum mainnet and (pending) L2. The circulation trend of SPK is 1 billion tokens in the first two years, and then halved every two years until the full supply in 10 years.

Spark Governance: Spark has a community governance mechanism controlled by SPK token voting, and over time, within the framework of the Maker SubDAO ecosystem, Spark governance will run all activities autonomously.

According to the official governance forum, Endgame鈥檚 transformation plan will be launched in three subsequent phases, namely:

  • Phase 2: Scale expansion: After all ecological components are launched in Phase 1, Phase 2 will expand the ecological scale and applications to make it bigger.

  • Phase 3 NewChain: Phase 3 will launch an independent Layer 1, which will host the core token economics and governance mechanisms of Maker Core and SubDAO, and connect RWA, DeFi and public chains through the NewBridge system.

  • Phase 4 Final Endgame: The final Endgame is the moment when all technologies and basic governance mechanisms are completed. When the final Endgame is activated, all basic governance mechanisms of Maker Core will be immutable, realizing the ultimate vision of Endgame.

Governance changes lead to ecological prosperity, and a new DeFi ecosystem is about to be born

It is not difficult to find from MakerDAOs Endgame transformation plan that as early as 2022, the MakerDAO community launched a self-rescue for the current development bottleneck of the DeFi sector. As an old project, MakerDAO knows that if it does not change, it will die slowly and will eventually be surpassed.

However, the transformation path chosen by Maker is different from other DeFi projects. Previously, dYdX moved from Ethereum to the second layer, and even built its own exclusive chain later, which was to seek development in performance and user volume.

The Endgame transformation plan allows the author to see a DeFi ecosystem with community governance as its core. From the surface, the Endgame transformation plan is roughly consistent with the development of dYdX on the underlying public chain path, from Ethereum to building L1 (MakerDAO disclosed that it will not shut down functions on Ethereum), but the core is to use different SubDAOs to attract users with different needs and preferences to participate in MakerDAOs governance. This will subdivide different sectors in MakerDAOs own ecosystem, allowing the stablecoin Dai or the upgraded NewStable to truly circulate in all directions in the ecosystem, thereby improving the prosperity of the ecosystem.

According to the roadmap it disclosed, Endgame may take several years to be realized. However, in the first phase to be launched this summer, there will be a variety of mining and revenue-generating channels, and the DeFi ecosystem may usher in new popularity. Odaily Planet Daily will continue to follow up.

This article is sourced from the internet: The self-rescue path of veteran DeFi projects: analyzing MakerDAO鈥檚 Endgame transformation plan

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