MakerDAO (MKR)’s Endgame proposal was overwhelmingly passed by the community, with nearly 80% of the votes in favor.
end game proposal
This proposal was submitted by MakerDAO founder Rune Christensen and focused on splitting the decentralized protocol into smaller, more decentralized units called MetaDAOs.
With over $8 billion in assets in reserves, MakerDAO is the largest DeFi protocol. However, the founders believe its size impacts decentralization, efficiency, and censorship resistance. Hence the move to break it down.
Part of Christensen’s proposal suggests a 25% limit on Real World Assets supporting DAOs. He also called for the introduction of negative interest rates.
According to the proposal, each MetaDAO will have its own token and the freedom to pursue profitable companies. Additionally, DAI holders will be able to produce new tokens as they are connected to the DAI ecosystem.
The passage of the proposal will change the current strategic core unit structure used by MakerDAO. Instead, independent clusters emerge that make decisions independently.
The community supported Coinbase’s proposal to move Maker’s $1.6 billion USDC reserve to Coinbase Prime. This is an attempt to generate additional income from reserves as the asset yields 1.5%.
Another $500 million will be transferred from the reserve to crypto broker Monetaris and hedge fund Appaloosa, who will lend to Coinbase at an expected rate of return of 4.5% to 6% per annum.
The community also voted in favor of creating a derivative stETH vault to stake Lido ETH. The move diversifies MakerDAO’s stablecoin DAI reserve and reduces its reliance on USDC.
Endgame’s proposal, on the other hand, has not enjoyed the support of the protocol’s major investors like Andreessen Horowitz.
“The structure of the core unit is arguably already legally decentralized. The introduction of MetaDAO does not change this analysis, and from a strictly legal point of view it makes the organization more resilient. I wouldn’t even do it.”
Community Criticizes Proposal
However, some experts have criticized voting for not being as decentralized as it appears.
Sébastien Derivaux, Head of Asset Liability Management at MakerDAO, said: Claim Rune alone accounts for 63% of the 122 addresses voted for and has over 74% economic clout. Therefore, only 6% of those who voted for him were not influenced by the founder.
Rune’s proposed The Endgame passed MakerDAO’s governance vote. 122 people voted, but he is the only one that matters.# Decentralization
1/n 🧵 pic.twitter.com/lbF8sO8pGU— Sebastien Deriboux (@SebVentures) October 25, 2022
Several others also criticized the original proposal. Jay Bhavani, CEO of Rari Capital, said: called It is “unnecessarily complex and over-optimized for many problems”.
Governance officer of LBS Blockchain Society Park Y explained Why they voted against the proposal. According to the entity, it objected for several reasons.
This includes the lack of consensus on MakerDAO’s preferred objectives and DAI’s price stability trade-off. Other reasons include MetaDAO not turning voters indifferent, and the Endgame plan wasn’t the only way to make MakerDAO more efficient.
