Understanding the Evolution of MakerDAO

Long-Term Roadmap: The Endgame

Goal: Become the largest and most widely adopted stablecoin project within three years.

Implementation Path: Utilize AI tools to establish growth through the creation of subDAOs and parallel product development, building a community-driven ecosystem.

The Endgame is divided into five phases:

• Unified Branding and Token Introduction: Unify the MakerDAO and DAI brands, introducing Newstable and NewGovToken (MKR and DAI can still be used). Conversion between Newstable, NewGovToken, and the original DAI and MKR tokens is permitted.

• SubDAOs and NewStable Token Farm: Launch six SubDAOs and a NewStable token farm. MakerDAO delegates daily complexities to SubDAOs, dividing the workload and complexity. SubDAOs fall into two categories: FacilitatorDAOs and AllocatorDAOs. AllocatorDAOs allocate NewStable collateral, handle marginal decisions and operational efficiency, and explore innovative products and growth strategies. FacilitatorDAOs operate DAO governance processes and rule sets according to their specifications, facing penalties if their assigned rules are breached or improperly executed. All SubDAOs reuse critical governance processes and tools from MakerDAO.

• Governance AI Tool Release: Implement AI tools to ensure alignment of governance rulebooks, incorporating the unified data structure that encompasses principles, rules, processes, and knowledge of the MakerDAO ecosystem.

• Governance Participation Incentives: Once the governance ecosystem becomes adept at managing DAOs through the governance AI tool, the Sagittarius Lockstake Engine (SLE) will be launched. SLE incentivizes NewGovToken holders to deeply engage in governance by locking their tokens and delegating voting power to the alignment governance strategies maintained by AVCs.

• NewChain Launch and Final State: The launch of NewChain is the last step in the Endgame initiation process. NewChain will serve as a blockchain hosting the token economics of all SubDAOs and the secure backend logic of MakerDAO governance. From this point, the MakerDAO ecosystem can self-operate autonomously, undergoing no further significant changes.

The Endgame will simplify and parallelize the Maker ecosystem, introducing a new unified brand identity and the flagship launch of 6 new SubDAOs. Users can engage in farming through these SubDAOs, which will drive permissionless innovation and collateral distribution. Endgame will also introduce a robust AI tool to assist less hardcore governance participants in understanding all system intricacies and ongoing events, along with an incentivized governance participation reward system to encourage engagement through farming rewards.

The final step of the Endgame will involve deploying a new blockchain, tightly integrated with Ethereum, enhancing governance security of the ecosystem while realizing all advanced features and token economics of the Endgame.

MakerDAO and Real-World Assets (RWA)

Against the backdrop of the Federal Reserve's interest rate hikes, yields from DeFi protocols have sharply declined, with risk-free returns falling below those of “risk-free” U.S. Treasury bonds. MakerDAO, a leading project in the DeFi space, plans to utilize USDC, collateralized through community-governance-approved proposals, to generate DAI. These DAI tokens will then be invested in short-term bond ETFs.

According to data from makerburn.com, MakerDAO currently holds over $3.3 billion worth of short-term bonds. The projected annual yield from this investment is expected to exceed $90 million.



According to the data, currently, over half of MakerDAO's revenue comes from Real-World Assets (RWA).



Both USDC and USDT are issued with a 1:1 backing by the U.S. dollar. Tether (USDT) and USDC allocate a portion of the dollars used for backing to invest in short-term U.S. Treasury bonds to generate returns. Given the context of rising interest rates in the United States, the yields from U.S. Treasury bonds have been increasing. MakerDAO's Real-World Asset (RWA) holdings allow a portion of these increased yields to flow back into its own revenue.

DSR and EDSR

The Spark Protocol is the first protocol within MakerDAO's Endgame plan. It operates as a general lending protocol that allows over-collateralized borrowing using stablecoin DAI and other mainstream cryptocurrencies as collateral. The DSR (Dai Savings Rate) represents the interest rate for DAI deposits, while EDSR (Enhanced Dai Savings Rate) is an improved version of DSR that offers higher savings rates.

Users can earn an annualized yield of 8% by depositing DAI into the Spark Protocol. This enables them to take advantage of the enhanced savings rate provided by EDSR.



Previously, the MakerDAO community devised a design scheme for the EDSR (Enhanced Dai Savings Rate) values. The amplification factor of EDSR varies dynamically based on four different scenarios of DSR (Dai Savings Rate) utilization, as follows:

• When DSR utilization is below 20%, the amplification factor for EDSR is 3 times the basic DAI savings rate (commonly referred to as “DSR”), but with a maximum cap of 8%. Given the current DSR value of 3.19%, the EDSR value within this range will be 8%.

• When DSR utilization falls within the range of 20% to 35%, the amplification factor for EDSR is 1.75 times the basic DAI savings rate, resulting in an approximate EDSR value of 5.58%.

• When DSR utilization falls within the range of 35% to 50%, the amplification factor for EDSR is 1.35 times the basic DAI savings rate, leading to an approximate EDSR value of 4.15%.

• When DSR utilization surpasses 50%, EDSR will no longer be effective, and the contract will only adopt the basic DSR value of 3.19%.

It is evident that the core logic of the Endgame revolves around two key principles:

• Building a DAI-Centric DeFi Ecosystem: The ecosystem is designed to be centered around DAI, where protocols (SubDAOs) within the ecosystem construct a modular DeFi infrastructure around DAI, facilitating an internal economic loop.

• Achieving Decentralized Autonomous Operation for MakerDAO: The ultimate goal is to establish a fully decentralized and self-operating MakerDAO system.

In the future, MakerDAO plans to launch various protocols that provide additional ways of generating revenue for DAI. By utilizing the token economics of MKR and these protocols, incentives will be introduced to encourage economic circulation and achieve an internal loop. Ultimately, this ecosystem aims to realize decentralized governance through these mechanisms.