Key facts:
New tokens besides DAI could be issued by MakerDAO.
The search for profitability would be the reason for these suggestions for change.
Rune Christensen, founder of MakerDAO (the organization responsible for the DAI stablecoin) presented his plan for the entity to continue growing in the stable cryptocurrency industry, or stablecoins.
Under the name “Endgame” (“end of the game” in Spanish), the proposal from the IT guy in the MakerDAO Governance forum is based on the creation of “metaDAOs” and synthetic versions of ether (ETH), the cryptocurrency of the Ethereum network.
Before proceeding, it is necessary to understand what a DAO is. This is the acronym for “decentralized autonomous organization”. As explained by the dictionary of acronyms prepared by CriptoNoticias, it is “a type of digital organization or ‘company’ that works based on a system of previously codified rules through smart contracts.”
MakerDAO is such an organization. The holders of the maker token (MKR) have the power of proposal and vote and use it to decide the direction of the entity. The new “metaDAOs” suggested by Christensen would be subsections of the main DAOeach one of them, with a particular objective and with its own governance token.
“Now, with metaDAOs as the silver bullet, Maker can consolidate everything we’ve already started and put itself in a position to take advantage of the new value creation possibilities that exist in the new generation of DeFi,” says the DAI co-creator.
If his proposal is put into practice, Christensen explains that there would be “nearly unlimited potential for scale and autonomy” for all independent metaDAOs running in parallel. So the “core”, that is, the current DAO, would become “much simpler than it is today”.
Synthetic ETH could be the next MakerDAO product
The second relevant change that the computer scientist proposes for MakerDAO is the issuance of a synthetic ETH, which they would call MATH. This is a token that maintains price parity with the Ethereum cryptocurrency, just as DAI maintains price parity with the US dollar.
“Maker has always planned to eventually develop synthetic assets for purposes other than DAI. This includes other currencies [fíat] but also volatile assets like ETH.”
Rune Christensen, Founder of MakerDAO.
Synthetic ETH already exist. For example, the Ethereum 2.0 staking pool Lido awards the stETH token to those who invest in the platform. The objective of stETH is that investors can withdraw their investment whenever they want, since the “original” ETH is locked in a smart contract and cannot be withdrawn yet.
Also, in the future new needs for synthetic ETH could arise and MakerDAO wants to be there to meet the demand.
MakerDAO would be looking for profitability
The reason for making these modifications in the objectives of the organization could be that MakerDAO is currently not profitable and its numbers are in the red.
As can be seen in the graph below, the market is choosing other cryptocurrencies stable before DAI. Tether (USDT), USD coin (USDC), and Binance USD (BUSD) all outperform DAI in capitalization.
Even terraUSD (UST), the stablecoin that lost its peg to the US dollar weeks ago, had become more attractive than DAI for users. This was possibly due to the existence of Anchor, a DeFi protocol that paid interest close to 20% per year for depositing that currency.
Banteg, the main developer of the DeFi platform, Yearn Finance, comment that, With this decision, the organization created by Christensen “goes into war mode”.
For Robert Leshnerco-founder of Compound (another Ethereum DeFi protocol), while the plan is complex, it may take MakerDAO “back to the basics of what it was intended to do: new synthetic assets.”
It is worth clarifying that, for the moment, Christensen’s plan is just an idea. To be carried out, should be formally presented as a governance proposal and go through all the stages that the MakerDAO protocol establishes.