1/ Maker's mission is to create an Unbiased World Currency.


MakerDAO has an Endgame Plan for it 🧵
2/ Maker's DAI is the largest #DeFi stablecoin by the market cap and 13th largest token overall.

Yet $DAI's $6.5B MC pales in comparison to $USDT's $67.5B.

So, how can it scale and eventually overtake centralized stablecoins?
3/ Currently DAI is >50% backed by $USDC which poses centralization risks.

But @RuneKek's Endgame Plan attempts to make $Dai as #bitcoin-like as possible:

• Decentralized
• Intrinsically resilient and,
• Where the scope and complexity of the core system stops changing.
4/ First, Maker needs to reduce the complexity of how it is governed by creating self-sustainable DAOs called MetaDAOs.

One can think of Maker Core as L1 Ethereum: slow and expensive, but secure.

While MetaDAOs are L2 solutions: fast & nimble, that get security from the L1.
5/ Each MetaDAO has a specific task at hand.

For example, Real World Asset DAO can develop specialized governance dynamics to allow them to overcome barriers that Maker got stuck in.

It's like Google's Alphabet, where Maker Core is Google and MetaDAOs are the “Alpha Bets”
6/ Each MetaDAO will have a token (MDAO) launched via yield farming.

2B MDAO tokens will be farmed in 10 years with declining issuance rate:

• 20% to DAI holders
• 40% to delegated MKR holders, increasing vote participation
• 40% to synthetic $ETH (ETHD) vault debt holders
7/ EtherDai $ETHD is backed by liquid staking tokens, such as Lido's $stETH, and will be used as collateral for DAI.

Why $ETH?

It's 'one of the only pieces of global financial infrastructure that can survive large scale global instability and economic crisis.'

#ETH 🚀
8/ To become the Unbiased World Currency, Maker is willing to drop $DAI's dollar peg.

Yep, this means, $DAI will free float away from 1:1 USD by gradually changing its price over time according to the Target Rate.
9/ The positive TR increases demand for Dai and reduces supply of Dai.

While a negative TR has the opposite effect: It reduces demand for Dai, and increases supply.

This should make DAI stable without the need of a 1:1 dollar peg.
10/ Why?

The Endgame Plan assumes eventual regulatory crackdown on RWA collateral, which includes $USDC.

So it prioritizes resilience against physical attacks over maintaining the 1:1 USD peg.
11/ $DAI is currently used as a decentralized alternative to $USDC or $USDT.

Thus here is a real possibility, @RuneKek assumes, that as many as 50% of the protocol users will leave in a short period of time after free floating is first activated.
12/ Rune also proposes a Protocol Owned Vault mechanism, similar to $FEI's Protocol Control Value.

The POV is a Maker Vault only usable by Maker Governance that holds ETHD and potentially other decentralized assets as collateral, and then uses it to generate & stabilize Dai.
13/ The Endgame Plan also aims to diversify collateral that includes:

• Decentralizes assets: $ETH, $UNI, $MKR etc.
• RWA: centralized stablecoins, renewable energy projects, cross-chain bridge tokens or Physically Resilient RWA...
14/ For example, a Physically Resilient RWAs are like renewable powered drone ships that can be disabled and re-enabled through on-chain governance and operate long term in international waters😎
15/ The Endgame Plan assumes a possibility that there will be a significant deterioration of regulatory security alongside a global economic and social decline.

To adapt, survive and recover Maker will have 3 'stances'.
16/ Pigeon Stance where there is no limit to RWA exposure and Dai remains pegged 1:1 with USD.

As Pigeons are not afraid of humans, Maker can tolerate minimal regulatory threats to generate as much income from RWAs as possible.

Pigeon Stance lasts 2.5 years.
17/ Eagle Stance - Dai becomes free floating with a negative Target Rate.

Stance guarantees that Maker’s exposure to seizable RWA is limited to 25%.

To achieve this Dai can be unpegged from the dollar if necessary.
18/ Phoenix Stance where Dai no longer allows any RWA other than Physically Resilient RWAs.

It's the maximum resilience form, where Maker no longer allows easily seizable RWA as collateral.
19/ The Endgame Plan roadmap is broken into 4 major phases.

Pregame will launch within 12 months to build ETHD, launch 6 MetaDAOs, starts liquidity mining etc.

Yet the Endgame will not launch until 2030 or later.
20/ If you want to learn more, check @RuneKek posts on Maker Forum.

There's so much more to add here, so I wonder what important points I might have missed

@DooWanNam @GArentoft @Mariandipietra @SebVentures @ChrisBlec @joce_chang
Update: free float would potentially happen after 3 years, maybe later, but not any time sooner.

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More from @DefiIgnas

Aug 26
1/ Compound III launched on #ethereum today.

So, what's new?
And how will it change #DeFi ecosystem?
2/The biggest change is the focus on borrowers.

Only one 'base asset' is supported for borrowing while other crypto assets are supplied as collateral.

Currently $USDC is the base asset and #ETH, $COMP, $LINK, $UNI and $WBTC are supported for collateral.
3/ Compound V2 used pooled-risk model, where users could borrow any asset.

In this model the protocol is as safe as the single weakest asset.

A single bad asset could drain all assets from the protocol.

This is how most of the lending protocols like Aave currently function.
Read 11 tweets
Aug 25
1/ $FRAX stablecoin is a giant compared to Venus $VAI

$1.3B market cap for FRAX vs $20M for VAI.

But just a year ago VAI was double the size at $250M, while FRAX only $133M.

So, what happened? 🧵
2/@VenusProtocol is a lending market similar to Compound or Aave, but available only on #BNB Chain.

It launched in late 2020 by forking Compound and MakerDAO's smart contracts, and had a successful $XVS token sale on Binance Launch Pad. Image
3/ One of the unique Venus features is the stablecoin $VAI.

The protocol allows using deposited assets as collateral to mint $VAI.

When VAI first launched, it supported the following assets as collateral: $SXP, $BNB, $USDT, $USDC, $BUSD and, crucially, $XVS.
Read 14 tweets
Aug 23
1/ There are 63 decentralized stablecoins on Defi Llama

Yet Aave and Curve are about to join the crowded market.

So, I researched 25 #DeFi stablecoins to understand:

• How do they function & keep the peg?
• What are their use cases and risks?
• What makes them special?

2/ 14.2% of the total $1.07T crypto market is stablecoins!

Just 3 ( $USDT $USDC and $BUSD) dominate 90% of the total stablecoin market cap.

In contrast, 63 smart-contract based #DeFi stablecoins together amount to a mere 8.3% ($11.72B) share.

Dwarfs against $USDT Image
3/Terra's $UST collapse wiped out half of the decentralized stablecoin market cap.

In April 2022 UST market cap was higher than Maker's DAI.

But UST collapsed due to algorithmic model design flaws, leaving DAI the leading #DeFi stablecoin. Image
Read 26 tweets
Aug 20
1/ $FEI Protocol is shutting down.

At $188M market cap, it's one of the largest #DeFi stablecoins.

Yet, it's closing down.

Why? 🧵
2/ In early 2021 Fei Labs raised $1.3B USD in #ETH to build a decentralized stablecoin.

That ETH raised was used as collateral for it's stablecoin $FEI.
3/ $FEI is different from other stablecoins such as $DAI

Fei is collateralized by various crypto assets, but in contrast to DAI, those assets are 'owned' by the protocol.

Users 'sell' crypto to get FEI.

The 'sold' asset is included in the Protocol controlled value (PCV).
Read 14 tweets
Aug 17
1/Terra's $UST collapsed 3 months ago.

Yet 3 major stablecoins are still using UST's algorithmic model:

• Tron's $USDD
• Wave's $USDN
• Celo's $CUSD

Is it worth the risk to hold them?

Let's find out 🧵
2/ Short reminder:

algorithmic stables are minted by depositing $1 worth of a volatile asset to issue $1 worth stablecoin.

For Terra, $1 USD of LUNA to mint 1 UST.

If UST price falls below $1, anyone could buy UST to mint LUNA at $1 then sell LUNA at a profit.
3/ The model is capital efficient:

as demand for UST increases, it boosts buying pressure & price for LUNA.

When the price of LUNA goes up, lower amount of it is needed to mint 1 UST.

On the way down, the process is reversed, which eventually lead to UST collapse.
Read 17 tweets
Aug 4
1/ More #DeFi projects are adopting veTokenomics.

I researched 20+ veToken ecosystem projects to understand:

• Why?
• How it works?
• What makes it special?

Here's what you’ll need to know 🧵
2/First things first. The price.

veTokenomics isn't a panacea to all #DeFi problems.

veTokens are highly inflationary and with the exception of $CRV all major veTokens underperformed $ETH in the past year.
3/Then why are more projects adopting the model?

The success metric in #DeFi is Total Value Locked.

So projects give away their own tokens as rewards to attract liquidity.

Yet without proper token value proposition, these tokens get sold away.

Let's look at @compoundfinance
Read 26 tweets

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