Gnosis succeeds in taking over? What’s the hidden meaning behind MakerDAO joining hands with GnosisChain?

Original author: Haotian

I originally thought that MakerDAO's Newchain plan was "stalled" due to a wave of public opinion. Unexpectedly, MakerDAO's lending protocol Spark Protocol passed the Gnosis Chain proposal one day ago, and also euphemistically called it a Kick-off multi-chain strategy. It seems that Has MakerDAO’s Endgame expansion, or “defection”, officially begun?

Why is GnosisChain so sacred? The official explanation is that it is an independent public chain built on xDAI. In fact, it is the equivalent EVM chain that targets Ethereum killers such as BSC and Avalanche. During the critical period when everyone was talking about MakerDAO fleeing Ethereum, Spark Protocol chose to deeply bind itself to a little-known competitive chain in Ethereum. It was really worried that Vitalik would come back to MKR to vent his anger.

So, what are the motives behind Spark Protocol joining hands with GnosisChain? Why is Ethereum layer 2 not the optimal solution for MakerDAO? Why doesn’t MakerDAO implement the same multi-chain strategy as AAVE? Next, I will try to briefly analyze it for reference:

Why choose Gnosis?

Rather than saying that MakerDAO chose Gnosis, it is better to say that Gnosis succeeded in taking advantage of the dispute between MakerDAO and Ethereum? Because according to DefiLlama data, the TVL of the 50 protocols in the entire Gnosis chain is only US$77 million, while the TVL of Spark Protocol, the previous protocol on Ethereum, is as high as US$427 million. Why does MakerDAO choose Gnosis to be a bit self-indulgent? Why does it have to be Gnosis? To put it simply, Gnosis was named xDai Chain from the beginning. It aims to use DAI, the stable currency with the first algorithm in the universe, to be compatible with and expand Ethereum, and to attract users of Ethereum, especially MakerDAO.

It is not difficult to see that Gnosis is a chain that was born for MakerDAO. Now the spare tire has finally become a regular one, just because it has fast transaction speed, low fees, and good cross-chain interoperability. Is it that simple? I think this is a signal sent by MakerDAO to implement the Endgame plan: it is unwilling to be trapped within the framework of Ethereum. Gnosis is included in the strategic plan, which really feels like "the gods fight, the chicken and the dog win."

Why is Ethereum layer 2 not the optimal solution?

I analyzed in the previous article that the layer 2 expansion of Ethereum is limited (you can read the highlights article on the homepage), which is limited by the carrying capacity of the mainnet rollup contract. As the father of DeFi, MakerDAO has a little arrogance It’s understandable that you and frivolous people want to break through to higher performance. However, digital banking services such as lending and borrowing are low-frequency scenarios, and performance is obviously not a core consideration. MakerDAO's ambition is to have a safe and controllable chain that can decide on hard forks. To achieve this fundamental goal, we cannot rely too much on layer 2.

In fact, if we look at the layer 2 development strategy of its competitor AAVE, we can also find some reasons why MakerDAO dislikes layer 2. AAVE has deployed a total of 9 chains, and the majority of TVL distribution is still the layer 1 main chain. Arbitrum only has 145 million US dollars, while year-on-year, GMX’s TVL has 422 million US dollars. Although this definition of layer 2 is not suitable for the development of the Lending protocol, it is a bit subjective, but considering the side chain nature of Layer 2 and its partial centralization, and then looking at the core position of Lending in the layer 1 chain, it is not difficult to see. , Layer 2 cannot carry the grand vision of the Lending lending platform.

Moreover, to add some news, MakerDAO also low-key issued a proposal to deploy to zkSync after announcing its in-depth cooperation with Gnosis. However, MakerDAO has not made much action in the two leading OP-Rollup camps of Arbitrum and Optimism. This may be interpreted as MakerDAO looking down on the security of OP-Rollup? If you choose layer 2 and only choose the zero-knowledge proof ZK-Rollup track, it is difficult not to think like this. I even saw many people in the Maker forum calling for MakerDAO to be able to log into the Base chain. It is unknown whether this will happen, but with the current security requirements of MakerDAO, it is a bit difficult.

What is the end point of MakerDAO multi-chain strategy?

Judging from the current data, the TVL data of MakerDAO CDP alone is as high as 4.68 billion U.S. dollars, which exceeds AAVE deployed on 9 chains. If you add Spark Protocol’s 427 million U.S. dollars, MakerDAO is still a DeFi brother. Of AAVE's $4.56 billion TVL, non-Ethereum chains only account for 500 million. Obviously, AAVE has already demonstrated to MakerDAO a sample of multi-chain expansion. Judging from the data alone, the temptation of an overlay multi-chain strategy is not great. MakerDAO’s multi-chain must be more than just covering protocols on each chain.

Because, if MakerDAO simply wants to take the multi-chain route, layer 1 such as Avalanche and Polygon are also good choices. Just ignore these well-known layer 1, ignore the well-known layer 2, and choose an unknown spare tire chain. Isn't the intention very clear? It is precisely because of the "compatibility" of Gnosis and MakerDAO that it can meet MakerDAO's strategic intention of multi-chain expansion without sacrificing "sovereignty" control.

Of course, it will be a good thing for the Gnosis chain. In any case, this is MakerDAO's embrace. Gnosis's layout on RWA may also be a key to attracting MakerDAO. However, overall, Gnosis is just one piece on the MakerDAO chessboard. I took a rough look at Endgame and actually planned 5 stages. MakerDAO’s multi-chain, cross-chain, and even the launch of the NewChain application chain have confirmed that MakerDAO does not want to be subject to any The limitations of a single chain must be seamlessly embedded into various financial application scenarios in the future, and ultimately a highly autonomous financial services community united by multiple SubDAOs will be realized.

Although it was born in Ethereum, developed in Ethereum, and became brilliant in Ethereum, Vitalik and everyone hope that MakerDAO can always focus on Ethereum. However, facts have proved that Ethereum is solid and MakerDAO is smooth. MakerDAO does not want to be restricted by any framework. .

Finally, a little popular knowledge. The official app entrance of MakerDAO has been changed to Spark Protocol. It can be seen that it is to divert traffic to Spark. If users want to participate in CDP lending, they have to find Oasis trade, and Oasis changed its name to Summerfi a month ago. Not only has the name been changed inexplicably, but the entrance is so deep that ordinary people can't find it.

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