MakerDAO Joint Creation: Why did we merge the DAI and Maker brands?

Original author: Rune, co-founder of MakerDAO

Original compilation: Jaleel, BlockBeats

*Editor’s note: On August 5th, the MakerDAO community voted on “Enhanced DSA Activation, Spark Protocol Debt Ceiling Increase, RWA Vault Update, AVC Member Compensation for Q2 2023, DAO Resolution for Monetails Clydesdale, Launch Project Funding, Spark Proxy Spell Execution" implementation proposal. The proposal was implemented on August 7, Beijing time. *

According to the Spark Protocol page of MakerDAO's lending agreement, the DAI deposit rate (DSR) has been raised to 8%. In addition to raising the DAI deposit rate to 8%, other major changes in the protocol include: the maximum debt limit of the Spark Protocol direct deposit module has been increased from 20 million DAI to 200 million DAI; the RWA 004-A debt limit has been reduced from 7 million DAI 0 DAI, RWA 002-A agreement implementation update; 134.1 MKR distributed to AVC members; Spark Protocol updated the DAI interest rate strategy, and reduced the DAI market loan-to-value ratio (LTV) from 74% to 0.01%, and the DAI liquidation threshold from 76% Down to 0.01%, WETH's market reserve ratio dropped from 15% to 5%, and WETH's iableRateSlope 1 dropped from 3.8% to 3%.

After the DAI deposit rate (DSR) was raised to 8%, giant whales began to act. According to monitoring, a giant whale sold 5,640 ETH on the chain yesterday for 10.32 million DAI (average selling price of 1,830 USD), mortgaged 5,400 wstETH to lend 4 million DAI, and then deposited the 14.32 million DAI in MakerDAO to earn Take the current 8% APY. The current TVL of the DAI pool has exceeded $400 million.

This article was written by Rune, the co-founder of MakerDAO, on Twitter on August 7th. Rune introduced the upgrade of DAI and MKR to a unified brand. The temporary code names are: NewStable (NST) and NewGovToken (NGT), as well as all the keys to Maker Endgame element. The following is the original translation of BlockBeats:

The current decentralized financial system is broken, and it is time to replace it with a system that benefits everyone. Maker Endgame achieves this through the power of DeFi and DAOs: overcoming their weaknesses, doubling down on their strengths, and fueling the accelerated growth of DeFi.

Most of us are here to stay through the cryptocurrency winter because we know that blockchain technology, if meaningfully applied to the global financial system, will unlock undeniable and incredible benefits for the world.

The key to a decentralized financial system is to decentralize and make its underlying governance infrastructure transparent. The users of the system must also be the ones who control the system. This is what DAOs do. The DAO itself is an amazing, transformative technology. In theory, this is a system that allows strangers to collaborate freely on the Internet, benefiting each other while making the world a better place.

But in reality the situation is not so simple. It turns out that most people only care about self-interest. So we have the DAO Coordination Problem, a system that in theory allows strangers to collaborate freely on the Internet, benefitting each other while making the world a better place.

Maker is the oldest DAO and controls the largest decentralized stablecoin. Our annual revenue is $142M+ and our project spend is $44M+. At this scale, we've struggled with coordination issues for years. But with Endgame, we finally have some answers.

Alignment Engineering is the decentralized solution for aligning all participants in a DAO. The goal is to make collaboration an easy option. Alignment Engineering is like a puzzle, every part and process in DAO must contribute to maintain alignment.

Endgame is our attempt to do this by completely revamping Maker governance and the Maker protocol. This is our last ditch attempt to achieve a utopian future of a decentralized financial system. Endgame is the actual implementation of Alignment Engineering for the Maker ecosystem, which will develop the ecosystem in four main areas in the short term. Each will be phased in over a period of about a year.

Rebranding: Upgrading MKR

Previously the brands of Dai and Maker were separate, as were their user bases. We hope to change this with a new unified brand that brings more alignment between users and governance.

Bottom line: DAI and MKR are here to stay! Upgrading is an option. The new unified brand will focus on making it as easy as possible for people to get started with a stablecoin offering, a DAO, or both.

The temporary code names are: NewStable (NST) and NewGovToken (NGT). The revaluation of upgrading MKR to NGT is 1: 12000. NST will be able to mine NGT tokens.

Time to create child DAO

They are undoubtedly the biggest feature of Endgame, and their impact and advantages may change the entire industry.

The basic idea is that we want to avoid a complex single DAO by separating high-level functionality and innovation into different SubDAOs. Regular NewStable (NST) holders can mine these SubDAOs for free. These self-organizing communities can then innovate, build and distribute products on top of the core DAO, generating revenue. In doing so, they can benefit and grow the entire ecosystem. Let's look at Spark DAO as a concrete example.

Let's take Spark DAO as a concrete example. SPK is one of six initial SubDAO tokens that NST will soon be able to mine. It already has a ready-made product:

Each sub-DAO is unique, and which sub-DAO you mine depends on which community you want to participate in. Sub-DAOs only work if there is a large number of NGT voters involved in setting governance boundaries.

Stakeholders vote for the governance strategy

The lock creates two groups of NGT holders: ordinary holders and lockers.

Ordinary holders don't care about governance. But stakers have huge stakes to help guide the way, stakers have to vote, and they also need to be very easy to provide useful input to the system Voting in Endgame feels like an election, stakers only have to do it once a year They can choose their favorite governance strategy, and the strategy will be automatically enforced.

Combining AI tools to help governance

To further align the ecosystem, we use a comprehensive live ruleset called Atlas. Atlas sets objective boundaries, rules, and best practices for sub-DAOs, stakers, and other participants. All of its valuable shared knowledge is freely available for the entire ecosystem. The challenge with explicitly formalizing all information relevant to effective DAO governance is that the Atlas dataset will be enormous. We overcome this by providing free AI tools as an interface layer. Working with Atlas is fast, user friendly and very powerful.

However, this does not mean that the core DAO or sub-DAO will be "run" by AI. AI tools will simply make it easy for even amateur participants to understand and interact with the knowledge and rules of Atlas. This means anyone can help check and restrain insiders.

The final and most important piece of the Alignment Engineering puzzle is the targeting system.

It is an immutable financial commitment to the public good, ensuring that the ecosystem attracts good people who have a natural affinity with consistency and are able to curb dissonance. If you are interested in participating in making this vision a reality, please join our discord, I will give a talk at Korea Blockchain Week in September with more details and updates.