Bessie Liu

Rune Christensen, MakerDAO’s co-founder, suggested that a forthcoming appchain dedicated to the DeFi lending protocol could be built using the codebase of Solana.



That new appchain is part of the so-called Endgame plan, as previously reported by Blockworks. The plan is intended to improve MakerDAO governance and ensure that the protocol itself becomes more self-sustainable. It’s been in the works since May 2022, with the “<a href="https://blockworks.co/news/makerdao-makes-first-steps-toward-endgame">Maker Constitution</a>” receiving approval earlier this year. 



Endgame itself is split into five phases. The final phase — Phase 5 — will deploy a new chain, now known as NewChain, as a hub for the backend tools supporting MakerDAO. 



Read more: <a href="https://blockworks.co/news/makerdao-endgame-update">Takeaways From MakerDAO’s 5-phase Endgame Update</a>



“The most important reason for why NewChain is needed, is that it will allow the ecosystem to use hard forks to gracefully recover from the most severe form of governance attacks or technical failures,” Christensen wrote in an ecosystem discussion <a href="https://forum.makerdao.com/t/explore-a-fork-of-the-solana-codebase-for-newchain/21822">post on Friday</a>.&nbsp;



“After having researched all the different options available to act as the foundation for NewChain, I believe that the Solana stack is the most promising codebase to explore further,” Christensen went on to write.&nbsp;



He argued that the code is “engineered well and benefits from being designed long after the bottlenecks and challenges of blockchains were already well understood.”



If the MakerDAO community voted in favor of the proposal, Christensen suggested that a “symbiotic relationship” be formed between <a href="https://blockworks.co/tag/makerdao">MakerDAO</a> and the existing Solana community.&nbsp;



This could be achieved through maintaining an independent client or providing funding to the <a href="https://blockworks.co/tag/solana">Solana</a> ecosystem, he said.



“It would be strategically beneficial to ensure there is a Two-Stage Gravity Bridge from NewChain to Solana alongside the bridge from NewChain to <a href="https://blockworks.co/tag/ethereum">Ethereum</a>,” he wrote. “It would also provide a useful boost to the network effect of the entire multichain economy.”&nbsp;



Aside from a Solana fork, Christensen argued that the only other contender for launching Maker’s new app chain would be the Cosmos SDK.



The downside, he said, is that the <a href="https://blockworks.co/tag/cosmos">Cosmos</a> ecosystem is not as efficient as Solana, which may make it more expensive to maintain over time.&nbsp;



“Cosmos also doesn’t have a strong central foundation organization like Solana has, which could be either a good or bad thing,” Christensen wrote.



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MakerDAO co-founder floats using Solana’s code to build new chain

<div id="highlights-block_635707cc7f523" class="highlights">
 <ul>
 <li>80% of MakerDAO community members voted in favor of launching the Endgame Plan</li>
 <li>A proposal to move $1.6 billion worth of USDC from Maker’s reserve into Coinbase Prime has also received the green-light</li>
 </ul>
 
</div>



MakerDAO has <a href="https://vote.makerdao.com/polling/QmTmS5Nf#vote-breakdown" target="_blank" rel="noreferrer noopener">voted in favor</a> of moving forward with founder <a href="https://cms.blockworks.co/rune-christensen-wants-out-of-maker/" target="_blank" rel="noreferrer noopener">Rune Christensen</a>’s “Endgame Plan” — which aims to make the protocol more decentralized.



As one of the largest DeFi protocols, MakerDAO has had to <a href="https://cms.blockworks.co/could-endgame-ease-makerdaos-governance-tensions/" target="_blank" rel="noreferrer noopener">navigate</a> complicated internal political and structural disagreements. The Endgame Plan was designed by Christensen in the hopes of improving protocol governance mechanisms. 



In early October, Christensen submitted a set of Maker Improvement Proposals (MIPs) to set the ground rules that would enable the launch of the Endgame Plan



The plan proposes a new structure for the DAO to better align incentives between the different community members —&nbsp; including the DAO workforce, MKR holders, governance delegates, holders of the DAI stablecoin and Maker vault owners — by restructuring the DAO into smaller teams with one aligned mission.



These smaller teams, dubbed MetaDAOs, will each have its own governing token — they will have a specialized purpose that is aligned with the protocol at large but will be its own fully functional decentralized governance.&nbsp;



In an interview with Blockworks, Lucas Vogelsang, MakerDAO community member and founder of Centrifuge — a protocol bridging real-world assets to DeFi — said the Endgame Plan will be a huge experiment for MakerDAO to figure out exactly how it can run a fintech-startup in a fully on-chain and transparent way.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“If you want to do something different, it’s not going to be building the same structures that we already have — we have to experiment a bit, and that’s what we’re doing with MakerDAO,” Vogelsang added. “We’ll see how it works in six months from now and re-evaluate.”</blockquote>



Another proposal which received a <a href="https://vote.makerdao.com/polling/QmbMaQ9A#comments" target="_blank" rel="noreferrer noopener">green light </a>from the MakerDAO community today is moving <a href="https://cms.blockworks.co/coinbase-looking-to-acquire-1-6b-of-makerdaos-usdc/" target="_blank" rel="noreferrer noopener">$1.6 billion worth of USDC</a> from Maker’s reserve into Coinbase Prime, the centralized crypto exchange’s institutional investment arm, that will allow the protocol to earn a 1.5% yield on its assets.



In a <a href="https://vote.makerdao.com/polling/QmbMaQ9A#comments" target="_blank" rel="noreferrer noopener">community forum</a>, the London Business School Blockchain Society, which supported the proposal, noted that the “1.5% yield is an attractive way to bring immediate income to Maker.” 



“That said, this proposal is likely to create lock-in to holding USDC because of the revenue stream it creates, which runs contrary to the intention to decentralise our stablecoin holdings,” the group added. “We need to actively source other revenue opportunities to relieve this exposure.”



DAI is one of the largest stablecoins by market capitalization, with over $7.6 billion in circulation. Its price is pegged to the US dollar through a module known as the Price Stability Peg (PSG), which allows users to swap collateral for DAI at a fixed rate.&nbsp;



Currently, USDC makes up about <a href="https://daistats.com/#/" target="_blank" rel="noreferrer noopener">39% of DAI’s backing</a>, but following the US Treasury’s decision to <a href="https://cms.blockworks.co/coin-center-sues-over-treasurys-tornado-cash-sanctions/" target="_blank" rel="noreferrer noopener">sanction crypto mixer Tornado Cash</a>, MakerDAO has been looking at alternative ways to back the protocol’s crypto treasury.



It’s, as such, unsurprising that the community has also <a href="https://vote.makerdao.com/polling/QmRVN2SB#poll-detail">voted in favor</a> of transferring $500 million worth of USDC to hedge fund Appaloosa and crypto broker Monetails. The USDC will be loaned to centralized exchange Coinbase, collateralized by bitcoin and ether.



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Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the On the Margin newsletter</a>.



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