Could Endgame Ease MakerDAO’s Governance Tensions?

Not long ago MakerDAO’s co-founder shared The Endgame Plan, a roadmap that aims to improve the protocol’s gov­er­nance mech­a­nisms and tap into DeFi innovation.

But dis­agree­ments with­in Mak­er­DAO com­mu­ni­ty mem­bers have inhib­it­ed the protocol’s abil­i­ty to make com­pli­cat­ed deci­sions, lead­ing to vot­er apa­thy and poor accountability.

“The real­i­ty of the sit­u­a­tion is that the sta­tus quo of mak­er is unten­able,” Rune Chris­tensen, the co-founder, wrote in MakerDAO’s gov­er­nance Dis­cord. “MKR is near val­ue­less because of the com­pound­ing mul­ti­di­men­sion­al risk.”

Fol­low­ing the Tor­na­do Cash sanc­tions and Circle’s move to black­list all USDC in Tor­na­do Cash con­tracts, mem­bers of the Mak­er­DAO com­mu­ni­ty — the sin­gle largest hold­er of the sta­ble­coin USDC — con­tem­plat­ed whether the decen­tral­ized autonomous orga­ni­za­tion could com­plete­ly move away from its depen­den­cy on “seiz­able” cen­tral­ized assets. 

But com­plete­ly shift­ing away from USDC has its down­sides — as free-float­ing DAI would lose its Price Sta­bil­i­ty Peg to the US dol­lar — a mea­sure, Rune said, which would only be tak­en under an “author­i­tar­i­an threat.” 

Torn between ide­olo­gies of rely­ing on cen­tral­ized assets and being com­plete­ly decen­tral­ized, Chris­tensen said on Dis­cord, “there are polit­i­cal and struc­tur­al issues in the work­force nobody has ever uncov­ered before that I have just recent­ly encoun­tered as lit­tle as a few weeks ago.”

“The real­i­ty is that almost nobody can just fix it, and those who could, would nev­er waste their time and san­i­ty fight­ing against the garbage pol­i­tics of those who want to just cre­ate dra­ma or those who have a vest­ed inter­est in keep­ing the bud­gets flow­ing,” Chris­tensen said.

Despite his dis­dain for the Mak­er­DAO, Chris­tensen is of the opin­ion that The Endgame pro­pos­al could resolve some of the tensions.

“The Endgame is a solu­tion that under­stands these issues and deals with them and in doing so deliv­ers sus­tain­able advan­tages from decen­tral­iza­tion and token gov­er­nance that isn’t just reg­u­la­to­ry arbi­trage we hope the gov­ern­ments won’t keep up with,” Chris­tensen said. “The only way to real­ly do it is to just show it in action.”

Not all com­mu­ni­ty mem­bers of the DAO are convinced. 

Pseu­do­ny­mous Mak­er­DAO mem­ber psy­cho­naut replied to Chris­tensen, say­ing “Giv­en your MKR weight, nobody who is a key per­son will admit to dis­agree­ing with you. You are inevitably sur­round­ed by sycophants.”

It seems the only thing that the Mak­er­DAO com­mu­ni­ty has been able to agree upon over the past few weeks is turn­ing toward real-world assets to ensure the val­ue of the DAI would remain stable. 

Most sig­nif­i­cant­ly, the pro­to­col part­nered with Hunt­ing­don Val­ley Bank, a com­mu­ni­ty bank in Philadel­phia, by offer­ing it 100 mil­lion DAI to sup­port the growth of exist­ing busi­ness­es and investments.

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