Rune Christensen, the creator of MakerDAO, sent out a proposal that aimed to further decentralize the decentralized protocol by dividing it into smaller MetaDAOs.
MakerDAO is the largest DeFi protocol with reserves worth over $8 billion. The founder, however, thinks that the scale has an impact on decentralization, effectiveness, and censorship resistance. Thus the decision to disassemble it.
One of the proposals that Christensen raised was a 25% cap on the Real World Assets backing the DAO. Additionally, he urged for the implementation of negative rates.
Each MetaDAO will have its own token and the flexibility to engage in any profitable enterprises, as per the proposal. Moreover, because the new tokens are integrated into the DAI ecosystem, DAI holders might potentially cultivate them.
If the proposal is approved, MakerDAO’s current Strategic Core Units structure will undergo some modification. Instead, independent clusters will be formed in order to allow for different decisions.
The proposal by Coinbase to transfer Maker’s $1.6 billion USDC reserve to Coinbase Prime was approved by the community. There would be a 1.5% payout on the assets, therefore this is an effort to increase revenue from the reserves.
An extra $500 million from the reserves would be transferred to hedge fund Appaloosa and crypto broker Monetalis, where the former would then lend it to Coinbase at an estimated annual return of 4.5% to 6%.
The creation of a vault for the Lido ETH staking derivative stETH received support from the community as well. Making this change will diminish MakerDAO’s dependency on USDC and broaden its stablecoin DAI holdings.
Meanwhile, important protocol investors like Andreessen Horowitz do not support the endgame plan. The venture capital firm stated that the Core Structure Unit arguably is already legally decentralized, and the addition of MetaDAO is unlikely to change the analysis or enhance corporate resilience from a purely legal standpoint.
The voting, according to some analysts, is not as decentralized as it appears.
The head of asset liability management at MakerDAO, Sébastien Derivaux, asserted that Rune alone represents 63% of the 122 voting addresses and has economic influence over 74%. Therefore, only 6% of the supporters were not influenced by the founder.
Several other people also disagreed with the initial suggestion. Rari Capital CEO Jay Bhavani described it as “unnecessarily complex and over-optimizing for many problems.”
Moroever, the reason for their vote against the proposal was given by Park Y, Head of Governance at LBS Blockchain Society. The company said that it opposed it for a plethora of reasons.
A couple of these are the compromise made on DAI’s price stability and the lack of agreement within MakerDAO over the platform’s primary goal. In addition, the Endgame plan wasn’t the only approach to increase MakerDAO’s efficiency, therefore MetaDAO wouldn’t be able to overcome voters’ apathy.
