MakerDAO: Rebranding, (Nearly) Fully Diluted, Launching SubDAOs, In Its Lane

MakerDAO has continued to stay relevant over the past year, with high utilization rates, especially compared to other prominent competitors such as Aave and Morpho, and elevated DAI supply. Going forward, if DAI supply and utilization rates remain high, we’re likely to see MakerDAO’s relevance and product market fit strengthen and solidify.

Notably, it’ll be important to track how/if the DAI supply continues to grow, with the launch of SubDAOs and SubDAO tokens. A significant portion of DAI supply has come through Spark’s pre-farming program (for 30M SPK tokens), launched in August 2023, which encouraged users to borrow DAI against crypto-collateral. 

If future SubDAOs are used to incentivize DAI growth, through pre-farming programs, DAI supply might continue to stay elevated, or potentially even grow. In addition, MakerDAO is looking to expand to rollups and sidechains, through SparkLend. However, there are a few scenarios where DAI supply may decrease:

• When users leave Spark and close their DAI borrow positions following the end of the farming program.
• If users move to more volatile assets and further out on the risk curve
• DAI supply could also decrease if investors become more risk averse - i.e. in a credit event or recession

Spark has been a success thus far,and will be Maker’s first attempt at going crosschain, which other DeFi 1.0 protocols have already achieved over the past year. It’ll be important to monitor how the protocol grows going forward, and how other SubDAOs perform after they launch.