MakerDAO ‘Endgame Plan’ Calls for Specialized DAOs, Says Protocol Is Held Back by Complexity

Source: Adobe/piter2121

A detailed proposal bringing the MakerDAO (MKR) protocol to a “predetermined, immutable end state” by setting up several new decentralized autonomous organizations (DAOs) was posted by protocol founder Rune Christensen. The plan aims to improve governance and tap into “the raw power of [decentralzed finance] (DeFi) innovation.

Posted on the MakerDAO forum by Christensen earlier this week, the central tenet of the plan is the formation of a series of new DAOs called MetaDAOs that would take on more specialized tasks in order to prevent Maker’s core from becoming too complex.

MakerDAO is a smart contract lending protocol that allows users to take out loans by posting digital assets as collateral. The loans are issued in the form of the DAI stablecoin.

The DAOs offered in the MakerDAO ecosystem would initially be created as a single DAO to test the concept in a low-risk manner, while other DAOs specializing in different fields would be formed later.

The idea behind creating the MetaDAOs on top of the already existing DAO that governs the Maker protocol today is to allow for greater specialization without increasing the complexity of the MakerDAO core.

Source: Forum.makerdao.com

Christensen described the idea behind the new DAOs, writing:

“MetaDAOs allow deep specialization through workforce, community, and governance process, as each MetaDAO can focus on the desired specialization, allowing it to devote the resources and focus needed to properly specialize and not be distracted by other responsibilities.”

He added that it was “a much better situation” than the current situation, where he said Maker had to specialize in “a lot of completely disjointed categories.”

Maker is currently held back by its “overwhelming, opaque complexity,” Christensen wrote, while noting that the complexity is there for a reason. The current level of complexity was necessary to take advantage of market opportunities, Christensen said.

With MetaDAOs, the Maker ecosystem could retain its complexity “and even adopt orders of magnitude more complex,” Christensen wrote, adding that this would then happen in “isolated and risk-free MetaDAOs.”

With this, Maker Core could potentially become “much simpler than it is today, creating a best-of-both-worlds situation,” the proposal says.

Regarding the benefits for holders of MakerDAO’s native MKR token, Christensen wrote that the new MetaDAOs would provide strong incentives for MKR holders to vote on governance issues. There would also be benefits in terms of higher returns and the ability to generate more DAI tokens for MKR’s long-term lock on the protocol.

For DAI holders, the proposal also brings benefits in the form of stronger and more decentralized collateral backing the stablecoin, according to Christensen. He added that the design of the system would make DAI “the best choice for trading [Ethereum] Crypto based on ETH and ETH.

Finally, Christensen explained that he views his endgame plan as “a self-complete roadmap”, designed to work like “a snowball that is released from the top of a hill”.

The MakerDAO founder ended his 6,000+ word blueprint by writing that:

“As it begins to pick up speed and MetaDAOs are created, the incentives that drive MetaDAOs will then drive them to build the pre-determined endgame state where the Maker Core has clearly defined, powerful yet simple functionality . […].”

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