DeFi
Maker aims for $100 billion stablecoin despite AI delay – DL News
- Investors are betting big on an overhaul of the Maker protocol.
- Maker’s founder wants to create a stablecoin for the general public.
- Any plan to exploit AI will have to wait until the technology improves.
- This effort continues a long-standing search for features that will bring cryptography to the mainstream.
While the stablecoin walk booms and the titans of finance launch their own dollar-indexed tokens, Maker’s DAI has lost its momentum.
Stuck with a supply of around 5 billion tokens, DAI has seen new, fast-growing stablecoins fill the gap. Incumbents Tether and Circle, meanwhile, are increasing their lead.
But an ambitious and controversial overhaul proposed by Maker co-founder Rune Christensen is just weeks away from rolling out in stages.
First proposed in 2022, the plan, dubbed “Endgame,” will include a rebranding, new tokens, new ways to generate yield, sub-DAOs, and artificial intelligence, all designed to reinvigorate MakerDAO, the heavyweight cooperative that runs the Maker protocol.
But they are also designed to bring Maker and its new stablecoin to the mainstream.
In his last primerChristensen said the goal is to increase DAI’s supply to “100 billion and beyond” — just below Tether’s $114 billion.
Tether and Circle dominate the stablecoin market, with Maker’s DAI in third place.
“We want to be able to reach a wider audience,” Christensen said.
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While new products are regularly to boast they will “onboard the next billion users,” most DeFi apps only serve a few thousand.
Endgame Controversy
Stablecoins are tokens that are intended to maintain their peg to another asset, usually the US dollar.
They are the closest thing to cash in the crypto economy and one of the few blockchain-based products to have found real world usefulness.
Maker’s DAI was designed as a “decentralized” alternative to USDT and USDC, stablecoins that can be frozen or seized by their issuers, much like money in a bank.
Christensen claims Endgame is a “Trojan horse” that could bring a decentralized currency to the masses. But the proposal has been controversial.
Over the years, it has gone through myriad iterations and sometimes controversial votes in which critics accused Christensen of abusing his outsized influence in MakerDAO.
Endgame also has its supporters.
“Right now, our parents and grandparents aren’t going to log into Maker,” said Mark Phillips, co-founder of Steakhouse Financial, a cryptocurrency advisory firm that works with MakerDAO. DL News. Endgame could change that, he said.
Investors seem to like the plan. MakerDAO’s governance token, MKR, has outperformed this year, rising more than 60%, while the value of the entire crypto ecosystem has increased by 34%.
Manufacturer Brand Change
The first step in Endgame’s “launch season” will be the unveiling of Maker’s new name, as well as the names of its new stablecoin and governance token.
A month later, both will be launched alongside a new mobile app.
Users will have the option to upgrade their DAI and MKR to “NewStable” and “NewGovToken” if they wish to take advantage of Endgame’s key feature: yield farming.
Users can earn interest on the new stablecoin via Maker’s existing savings rate — 7% on Friday — or in the form of governance tokens.
Those who hold the new governance token can “Enable“to earn interest and participate in the governance of the Maker.
The most engaged members of the cooperative can earn even greater rewards by keeping MKR or the new governance token locked on the platform.
“It’s the best place to save and grow your money over the long term,” Christensen said.
The rewards should attract new voters to MakerDAO, which is now dominated by “whales” who own so much MKR that they feel compelled to participate, he said.
Philips agrees.
“One of the general problems in crypto and DeFi is that there are often barriers to participation in governance,” he said.
Artificial intelligence
The final step will be the launch of Maker’s first sub-DAO — a cooperative within the MakerDAO cooperative.
The first sub-DAO will run Spark, a year-old lending protocol inspired by Aave and launched by Phoenix Labs, a company led by Spark founder Sam McPherson.
Sub-DAOs are meant to solve one of MakerDAO’s problems: its bureaucratic burden. By outsourcing some features to subgroups, the volunteers who help run MakerDAO will be less likely to burn out, Christensen said.
However, this plan faces an obstacle.
Christensen initially hoped to launch multiple sub-DAOs simultaneously.
Instead, only the Spark sub-DAO will launch initially, with others to follow as needed, Christensen said.
That’s because Endgame relies heavily on artificial intelligence.
“Things are a little complicated right now,” MacPherson said. DL Newsreferring to MakerDAO governance.
Eventually, AI will be used to crawl MakerDAO’s forums, where members debate proposals and service providers share data and progress reports.
The hope is that AI will be able to distill activity on the forum and help members make informed decisions.
AI “will help the average voter understand in a very simplistic way whether things are going well or not,” MacPherson said.
But AI has not progressed fast enough.
“AI is really great most of the time, but it also has a lot of hidden errors and little glitches that make it unreliable,” Christensen said.
In the meantime, Maker’s co-founder believes that a new, consistent brand and opportunities to generate yield from its tokens will drive mass adoption.
“It’s a bit of an experiment in that sense,” he said. “Maybe what’s missing from cryptocurrencies is a little bit more effort to make them truly accessible.”
Aleks Gilbert is DL News’ DeFi correspondent based in New York. You can reach him at aleks@dlnews.com.