Maker Gets Ready for Endgame

MakerDAO, the DeFi titan formed in 2014 and responsible for the stablecoin DAI, has spent much of the past year gearing up for an effort to simplify its vision and level up its ambitions.

The plan is called Endgame.

Per founder Rune Christensen:

Endgame is a major update to MakerDAO designed to enhance efficiency, resilience, and participation by creating a strong governance equilibrium that acts as the bedrock for SubDAOs to parallelize growth and product innovation in an emergent, community-driven ecosystem.

Endgame is all about attracting new users and funds to the protocol by expanding use cases and scaling incentives. The effort aspires to level-up DAI's place in the industry, elevating its market share alongside centralized stablecoins like USDT and USDC, all while reducing reliance on centralized collateral.

Maker frames it as an effort to make saving money more fun by giving users a more diverse incentive structure inside the Maker ecosystem. 

Endgame is an ambitious effort that will likely take years to play out, and there are a lot of moving parts to keep track of. Christensen recently laid out an updated timeline for the effort, so let's see what's on the Endgame menu👇

🟩 Endgame Phase 1: Launch Season

The inaugural phase, dubbed "Launch Season," sets the stage for kickstarting Endgame. 

New Tokens ➡️

Slated for this summer, the effort aims to cultivate a self-sustaining ecosystem where SubDAOs, enhanced tokenomics, and a new brand identity mesh to spur DAI's adoption and usage. Central to this phase will be new tokens, currently known as “NewStable” and “NewGovToken.”

While MakerDAO will introduce new tokens, it will keep DAI and MKR and allow users to upgrade to these new tokens at a fixed conversion rate.

New Infrastructure ➡️

Alongside these new tokens, MakerDAO will be serving up new infrastructure to incentivize bringing funds inside the Maker ecosystem and keeping them there.

These efforts include:

• The debut of NewBridge will connect Ethereum to top L2s (one to start) to enable "low-cost native farming of tokens," leveraging the much lighter transaction costs of L2s.
• The launch of Lockstake Engine (LSE), which will incentivize users to delegate their MKR and NewGovToken holdings and earn yields. LSE won't be available to US residents (or VPN users), and unlocking staked funds will lead to hefty exit fees.
• The launch of SparkDAO, the first of Maker’s SubDAOs, and the SPK token. This effort, built around the existing Spark lending protocol, which has nearly $3 billion in TVL, will set the stage for other SubDAOs that leverage their own communities, products, and shared incentives with MakerDAO.

🟩 Phase 2: Expanding Horizons

Following Phase 1's major rollouts, Endgame will expand Maker’s ecosystem with six new SubDAOs designed for specific communities and interests, from real-world assets to gaming. 

More Connectivity ➡️

This expansion extends the protocol’s reach across more chains, adding bridges to all major Ethereum L2s like Arbitrum, Optimism, and Base, as well as hot alternative L1s like Solana.

More Governance ➡️

In this stage, SubDAOs will move toward full governance autonomy, supported by new approaches to innovate on some of the current plights plaguing DAOs. These AI-aided tools will aim to simplify participation in DAO decision-making processes and help users take part with more limited effort. There are certainly plenty of questions about how this will look in practice.

🟩 Phase 3: NewChain

Phase 3 of MakerDAO's Endgame is still "several years out" but will introduce NewChain, a dedicated L1 to house the tokenomics and governance mechanics of Maker and the SubDAOs.

NewChain aims to be a hub for RWAs, DeFi, and cross-chain interactions via NewBridge while preserving existing products and maintaining compatibility with Ethereum. Though everyone is launching an L2/L1 right now, Maker will largely focus their chain on scaling the SubDAO ecosystem.

Christensen notably came out last September and said he’d like to explore the Solana codebase for this.

🟩 Phase 4: Achieving Immutable Governance

All of these efforts will culminate with the Final Endgame, a stage in which the core governance aspects of Maker and the SubDAO Ecosystem will become final and immutable.

As you can see there's quite a bit of work to be done before this stage, but it's all with the goal of creating, "A dynamic, ever-growing ecosystem rooted in an unchangeable, reliable financial infrastructure built for the ages.”

What's at Stake

MakerDAO's Endgame strategy represents an undeniably ambitious vision to scale a hardened and diverse financial ecosystem for DAI. 

Given that the phases of Endgame stretch over years and contain as many subplots as an Avengers movie, it's almost guaranteed that certain elements of this vision will shift and evolve. In the coming months, several significant governance changes will be introduced to prepare for this transformation. 

Overall, Endgame not only breaks ground for DeFi but also DAOs, with its potential to reshape the model for conducting governance. 

It's a long road ahead, but as one of the most foundational DeFi protocols, Maker's evolution into a more sustainable entity that aims to enable a permissionless foundation for DeFi should be an effort everyone in the industry shapes and takes part in.