MakerDAO MKR community approves ‘endgame’ proposal

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MakerDAO Maker community approves of 'Endgame' proposal MakerDAO Maker community approves of ‘Endgame’ proposal
MakerDAO Maker community approves of 'Endgame' proposal

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cover art/illustration via cryptoslate

The MakerDAO (MKR) endgame proposal was heavily supported by the community, with around 80% of the votes in support.

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The proposal was presented by MakerDAO founder Rune Christensen and focused on breaking the decentralized protocol into smaller units called MetaDAO that would be more decentralized.

With over $8 billion in assets in its reserves, MakerDAO is the largest DeFi protocol. However, the founder believes that its size affects decentralization, efficiency, and resistance to censorship. Therefore, steps have been taken to break it.

Part of Christensen’s proposal proposes a 25% limit on real world assets backing the DAO. He also called for the implementation of negative rates.

As per the proposal, each MetaDao will have its own token and freedom to pursue any for-profit venture. In addition, DAI holders can acquire new tokens as it is connected to the DAI ecosystem.

The passage of the resolution will change the current strategic core unit structure used by MakerDAO. Instead, independent groups will emerge that will take their decisions separately.

The community supported Coinbase’s proposal to move $1.6 billion in USDC reserves to Coinbase Prime. This is an attempt to generate additional revenue from reserves, as there will be a 1.5% return on assets.

Another $500 million will be transferred from the reserve to crypto broker Monetelis and hedge fund Appaloosa, which will then lend to Coinbase at an expected annual return of 4.5% to 6%.

The community also voted in favor of creating a vault for Lido ETH, a derivative of stETH. The move will diversify MakerDAO’s stablecoin DAI reserves and reduce its reliance on USDC.

Meanwhile, the endgame proposal does not enjoy the support of major investors in the protocol such as Andreessen Horowitz. The venture capital firm said:

“The core unit structure is arguably already legally decentralized. The introduction of MetaDO probably does not change this analysis, nor does it bring more organizational flexibility from a strictly legal standpoint.”

The community criticizes the proposal

However, some experts have criticized the vote, saying it is not as decentralized as it seems.

Sebastian Derrivaux, Head of Asset Liability Management at MakerDAO, claims That rune alone represents 63% of the 122 addresses that voted and has an economic impact of over 74%. Therefore, only 6% of those who voted in support were not under the influence of the founder.

Several others also criticized the initial proposal. Jai Bhavani, CEO, Rari Capital called It is “unnecessarily complex and over-optimizing for many problems.”

Also Head of Governance at LBS Blockchain Society Park Y Explained Why did they vote against the motion? According to the organization, he opposed it for several reasons.

These include the lack of consensus in MakerDAO regarding its overriding purpose and the trade-off of DAI’s price stability. Other reasons include that MetaDAO would not create voter apathy, and that the endgame plan was not the only way to make MakerDAO more efficient.





Credit : cryptoslate.com

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