DeFi Brief: Maker's Endgame

Key Narrative: Maker’s Endgame

MakerDAO has long stood as the cornerstone of DeFi. But as the protocol has grown, so too has its complexities. Since the Maker Foundation dissolved and handed over complete control of the protocol to MKR governance in July 2021, the community has struggled with fragmented objectives and declining profits.

To reorient itself, Maker co-founder Rune Christensen proposed a decade-long masterplan known as the Endgame in the summer of 2022. After months of controversial debate, MKR governance voted in October 2022 to commit to the Endgame as the future direction of the protocol.

At a high level, Endgame is an attempt to simplify Maker’s core governance structure and reduce the protocol’s dependence on centralized collateral. Dai will gradually shift its dependence away from the US dollar and is expected to become a free floating asset in the long run. As part of this process, there will be an emphasis on removing the centralized stablecoin collaterals that currently back a majority of Dai as well as capping its exposure to real-world asset collaterals. This is expected to be a very challenging endeavor considering these two asset categories have grown to become the majority of Maker’s revenues in recent months.

A Phased Approach to the Endgame