The 5 phases of Endgame

[rune]

The 5 phases of Endgame

Introduction

Endgame is a major update to MakerDAO designed to enhance efficiency, resilience, and participation by creating a strong governance equilibrium that acts as the bedrock for SubDAOs to parallelize growth and product innovation in an emergent, community-driven ecosystem.

The short term objective of Endgame is to grow the Dai supply to more than 100 billion within 3 years, and from there ensure that the ecosystem is anchored in an autonomous and vibrant DAO economy that continues to grow at an accelerating rate, while safely maintaining the governance equilibrium to ensure it can scale to any size.

This post gives an overview of the roadmap and the comprehensive changes that Endgame will bring to Maker in the 5 successive launch phases that will be coming soon.

Phase 1: Beta Launch

The first product launch of Endgame will focus on establishing a new unified brand for the ecosystem, and will arrive early 2024.

Maker and Dai are established and trusted brands in the cryptocurrency space. Unfortunately they have drawbacks, including having two separate brands rather than a single cohesive concept. The Endgame transition is the ideal time to introduce a new brand and new website that properly communicates and embodies the Endgame vision of building resilient and parallelized governance through AI-assisted processes to secure the future of stablecoins and DAOs.

Crucially, Dai and MKR will not be altered. You can continue to use and hold these tokens, and they will be permanently preserved.

It will be possible to directly upgrade Dai and MKR to their new versions with the codenames: NewStable and NewGovToken (final names to be revealed alongside the new brand and website).

NewStable will be a new ERC20 wrapper of the same underlying stablecoin as Dai. Its main unique features are:

• Native farm of NewGovToken with a total farm rate of 100 million NewGovToken per year (equivalent to 8333 MKR per year) available immediately from Phase 1: Beta Launch.
• Native farm for SubDAO tokens with a total farm rate of 350 million SubDAO tokens per year for each SubDAO available from Phase 2: SubDAO Launch.
• The new Allocation System will directly allocate large amounts of NewStable and Dai collateral to seed liquidity for NewStable on Uniswap and other major DEXes. The goal is to deploy enough assets that NewStable will have more on-chain liquidity than Dai from the moment it launches.
• The NewStable Accessibility Reward system will provide rewards to platforms and protocols that integrate NewStable.
• Dai users can upgrade to NewStable, or unwrap back to Dai, 1:1 with no fees, instantly and in unlimited quantities.

NewGovToken will be a redenominated version of MKR with a larger supply

• MKR can be upgraded to NewGovToken with a redenomination of 12000 NewGovToken per 1 MKR.
• Immediately at Phase 1: Beta Launch NewGovToken will have the Smart Burn Engine activated, which will accumulate LP tokens for NewStable against NewGovToken using all Protocol Surplus above 50 million.
• At Phase 3: Governance AI Tools NewGovToken will provide token gated access to the powerful Governance AI Tools system that enables NewGovToken holders to easily summarize and verify governance rules and processes, or generate new aligned governance proposals.
• At Phase 4: Governance Participation Rewards, NewGovToken will be able to Lockstake in the Sagittarius Lockstake Engine in order to receive 30% of protocol income as NewStable rewards or SubDAO token rewards (150 million tokens per year, per SubDAO).
• MKR users can upgrade to NewGovToken, or unwrap back to MKR, at a fixed rate of 1:12000 with no fees, instantly and in unlimited quantities.

USA IPs and VPN users will be geoblocked from accessing all forms of farming and yield opportunities of NewStable and NewGovToken.

The new brand, the new websites and the names of the new tokens are being developed by the Accessibility scope, and will be revealed before Phase 1: Beta Launch. The goal will be to simplify the brand towards the basic stablecoin product and highlight its unique value proposition: The ability to farm unique and independent SubDAO tokens that are fun and easy to govern.

Phase 2: SubDAO Launch

Phase 2: SubDAO Launch is the key launch of Endgame: the launch of the first 6 Maker SubDAOs and their NewStable token farms.

SubDAOs function as born-decentralized, specialized divisions within MakerDAO. They build their own unique governance processes, enabling rapid parallelized growth, specialization and decision making.

By delegating day to day complexity to SubDAOs, MakerDAO significantly streamlines the workload and complexity that Maker Governance needs to manage.

The primary tasks of SubDAOs include user acquisition and maintaining decentralized frontends.

Beyond this basic task of user growth, the SubDAOs are split into two classes each with their own focus: FacilitatorDAOs and AllocatorDAOs

FacilitatorDAOs specialize in operating the DAOs governance processes and rulesets according to their specifications, and are paid for performing well, but penalized in case rules under their responsibility are broken or not properly enforced. At Phase 2: SubDAO Launch 2 FacilitatorDAOs will be launched and have their genesis tokens distributed through the NewStable farms.

AllocatorDAOs specialize in allocating NewStable collateral, handling marginal decision-making and operational efficiency, and experimenting with innovative products and growth strategies. At Phase 2: SubDAO Launch 4 AllocatorDAOs will be launched and have their genesis tokens distributed through the NewStable farms.

MakerDAO never issues or generates Dai or NewStable itself, and in Endgame will slowly prepare to hand over maintenance and control of the native vault engine to an AllocatorDAO. Instead, long term collateral allocation will primarily happen through the AllocatorDAOs, that will use the Maker Protocol to generate NewStable in bulk through the Allocation System which allows AllocatorDAOs to borrow from Maker at a low rate and then allocate the NewStable to other DeFi protocols, Real World Assets, or their own vault engines.

AllocatorDAOs cover all collateral onboarding costs, oracles, maintenance, upgrades, legal costs, credit risk assessment costs, and other associated expenses. They also maintain junior capital that takes the first loss on all collateral exposure. In return, AllocatorDAOs can charge a spread above the Base Rate from their users, to compensate for their work and risks.

All SubDAOs reuse key governance processes and tools from MakerDAO to streamline their operations, and can maintain high quality governance with relatively small and hobbyist communities due to their shared access to the cutting edge core AI tools for governance provided by MakerDAO.

By delegating away the bulk of complexity and risk, Maker Governance can remove almost all costs and complexity related to day to day operations, and focus solely on mitigating tail risk through its slow moving, reliable governance processes.

SubDAO and NewGovToken holders’ incentives are aligned through intertwined economic mechanics of their governance tokens, and the distribution of the SubDAO Governance Tokens to the NewStable users and the NewGovToken holders.

The 2 FacilitatorDAOs each receive 50,000,000 NewGovToken (equivalent to 4166 MKR, or roughly 0.42% of total supply of NewGovToken/MKR) per year into their treasuries.

The 4 AllocatorDAOs each receive 40,000,000 NewGovToken (equivalent to 3333 MKR, or roughly 0.33% of total supply of NewGovToken/MKR).

These baseline token emissions provides the SubDAOs with basic funding for operations, expansion and development.

Surplus income earned by the SubDAOs is used to provide liquidity for its governance token, making it more liquid and valuable over time if the SubDAO token holders are able to effectively use the governance processes and AI tools at their disposal to generate a surplus.

The 6 SubDAOs initially have codenames based on the numbers ZERO to FIVE, and are then renamed by their new communities to match a new, unique brand identity developed collaboratively by the community.

To prepare the communities for the upcoming token and governance launch, the SubDAO forums have already been created, allowing the communities to begin forming already. The FacilitatorDAO forums: ZERO, ONE and the AllocatorDAO forums: TWO, THREE, FOUR, FIVE.

Phase 3: Governance AI Tools Launch

Following the launch of the SubDAOs, the Maker Ecosystem will begin to ramp up its production-grade AI tools for governance monitoring and improvement.

The Atlas is a giant governance rulebook built as a unified data structure containing all principles, rules, processes and knowledge of the entire MakerDAO ecosystem. The data is optimized for use with the specialized Governance AI Tools that can modify, improve, summarize and interpret the Atlas. The use of AI tools help level the playing field between deeply embedded insiders and more peripheral community members, by making it possible for anyone to participate at a very high level with all relevant facts and nuance available, and audit and verify decisions and actions by insiders in real time.

The Governance AI Tools continuously improve the Atlas, making them a powerful system of “Ecosystem Intelligence” that systematically accumulates knowledge, experience, examples and data, saving it in an optimized data structure for later use. This allows the DAO to learn from experience and steadily improve its processes and decisions over time, without requiring leadership or centralized authority.

At the root of the Atlas data structure sits the Immutable Documents. These documents are unchangeable to protect minority token holders and reduce the risk that AI-assisted governance will deviate from its intended purpose, or that misaligned actors will attempt to centralize the ecosystem. The Immutable Documents are designed to sustain the system permanently, forever keeping it safely in a decentralized equilibrium that produces economic value and public good.

Aligned Voter Committees (AVCs) are open governance participation structures where regular NewGovToken holders leverage the professional workforce and the most powerful governance and AI tools available to the ecosystem to receive detailed status reports and domain-specific professional advice. Based on this input AVCs develop improvement proposals about key decisions in a standardized format known as Aligned Governance Strategies.

A crucial aspect of Makers governance resilience is the focus on public good, which attracts high-value ecosystem participants that are aligned with the public good mission, and helps counterbalance the inherent principal-agent risk of the humans or AI that are embedded in the governance processes.

The Purpose Fund delivers on the public good focus by funding the development of free, open source AI models and free AI tools to help socially impactful industries and projects tap into the efficiency gains of AI and use it to achieve more self-sustainable impact. This both helps MakerDAO improve its own Governance AI Tools while also delivering on it’s public good purpose.

Phase 4: Governance Participation Incentive Launch

Once the governance ecosystem has become proficient in managing the DAO through the Governance AI Tools, the Sagittarius Lockstake Engine (SLE) will be ready to launch.

The SLE incentivizes NewGovToken holders to participate deeply in governance by locking up their NewGovTokens and delegating their voting power to an Aligned Governance Strategy maintained by the AVCs (explained above).

This form of governance participation happens through a user-friendly, gamified frontend for easy access, and is comparable to the well understood process of picking a political party in a multi-party democracy (with voting power weighted by token holdings).

As reward for their work in improving and securing the governance process, SLE users receive NewStable income (30% of Protocol surplus) or SubDAO tokens (30% of SubDAO token distribution, initially 150 million tokens per year per SubDAO).

The SLE imposes a 15% exit fee, which is burned from the locked NewGovTokens when a user exits. This commitment incentivizes problem-solving through governance tools like direct participation in AVCs, instead of just quitting when challenges emerge.

Starting from Phase 4: Governance Participation Rewards Launch and for the following 6 months, the SLE will provide a one time bootstrapping rewards boost. The rewards boost will be equivalent to the SubDAO tokens that would have been yield farmed by SLE users in the period of time from Phase 2 to Phase 4 when only NewStable users were able to farm SubDAO tokens. These additional tokens are distributed to SLE users over a 6 month period in addition to the standard reward of 15 million tokens per year, so e.g. if there was a 6 month period between Phase 2 and Phase 4, then the farming rate for the first 6 months of the SLE will be 30 million tokens per year.

Alongside the deployment of the Sagittarius Lockstake Engine, Phase 4: Governance Participation Rewards Launch will also launch 6 farms for SubDAO tokens, that will be able to farm 40,000,000 NewGovToken per year (equivalent to 3333 MKR and roughly 0.33% of total supply of NewGovToken/MKR). Users of the NewGovToken farms will be encouraged to participate in their respective SubDAO governance processes, but it will not be a requirement, and there will be no exit fee or other restrictions.

Phase 5: NewChain Launch and final Endgame State

After the Sagittarius Lockstake Engine has been launched, the next and final step is deploying the NewChain (Actual name to be based on the new brand). The launch of NewChain will be the last step in the Endgame launch process, and once it is deployed MakerDAO will permanently enter the Endgame State where further major changes are impossible, and it’s core processes and balance of power remain decentralized, self-sustainable and immutable forever.

NewChain will be a blockchain that houses all backend logic for SubDAO tokenomics and MakerDAO governance security. This means that on Ethereum, NewStable and NewGovToken, as well as Dai and MKR, will continue to function as normal, and the only change will be that they will be protected by a governance backend that operates through a secure, state of the art bridge using a two-stage bridge design.

The ecosystem focus of MakerDAO and SubDAOs will continue to be the Ethereum Ecosystem and Ethereum L2s, as well as any alternative L1’s that have sufficient markets and userbases. NewChain will be designed around this reality.

The key feature of NewChain is the ability to use hard forks as a governance mechanism to recover from catastrophic governance disputes where an attacker with majority voting power forces minority token holders to shut down the protocol, or where an attacker abuses the ability to shut down the protocol.

This provides a final level of governance security to users, businesses and protocols that rely on the Dai Stablecoin and NewStable, which ensures even the most extreme governance attack scenarios will only have a minimal impact on their user experience, and will not put their funds or their stability at risk.

NewChain will also have some extra features that optimizes it as a backend for AI-assisted DAO governance processes and AI tool users, including smart contract generation and state rent.

The native token for gas fees and state rent will be Savings-NewStable (tokenized version of NewStable that is actively earning the Savings Rate), and consensus staking will be with NewGovToken through the Sagittarius Lockstake Engine.

The Neural Tokenomics logic of Endgame will be implemented as a part of the protocol itself, and will unlock various new features, including:

• The ability to incubate new SubDAOs beyond the initial 6 SubDAOs, with a new major SubDAO automatically launching approximately once per year with no human intervention.
• The ability for AllocatorDAOs to incubate a new type of SubDAO called the MiniDAO, through at-will governance actions. This can result in a very large amount of new AI-powered MiniDAOs being incubated to experiment with various projects and opportunities.
• Neural Tokenomics Emissions from MakerDAO to SubDAOs, and from AllocatorDAOs to MiniDAOs that creates a gamified competition between SubDAOs, rewarding them based on how much NewStable/NewGovToken liquidity they can accumulate.
• A governance Lockstake system similar to the Sagittarius Lockstake Engine for each of the SubDAOs. This will replace their NewGovToken farms.

Conclusion

Endgame will streamline and parallelize the Maker Ecosystem, through a new unified brand identity and the release of 6 new SubDAOs that will parallelize growth and innovation and can be farmed directly by users. Endgame will also introduce powerful AI Tools to assist less hardcore governance participants to be on top of all details of the system and what’s happening, and a Governance Participation Rewards system that incentivizes people to participate through farming rewards. The final step of Endgame will be the deployment of a new blockchain that is tightly coupled to Ethereum while increasing the governance security of the ecosystem and implementing the full range of advanced Endgame features and tokenomics.

[flipsidegov]

First, thanks a lot for tying it all together. This is helpful and provides a much needed and important perspective for our place in the process of Maker Endgame.

Some comments:

@rune

NewGovToken will be able to Lockstake in the Sagittarius Lockstake Engine in order to receive 30% of protocol income as Dai rewards or SubDAO token rewards (15 million tokens per year, per SubDAO).

Assuming these are NewStable rewards.

@rune

American IP and VPN users will be geoblocked from accessing all forms of farming and yield opportunities of NewStable and NewGovToken.

You’re meaning US-American, we assume. This is an endless game of cat and mouse to successfully block US users. Would be good to get some legal clarity on what constitutes a good enough effort.

@rune

Instead, long term collateral allocation will primarily happen through the AllocatorDAOs, that will use the Maker Protocol to generate NewStable in bulk through special Allocator Vaults at the Base Rate, and then allocate the NewStable to other DeFi protocols, Real World Assets, or their own vault engines.

This doesn’t really answer the question how these new DAOs will manage to allow NewStable to have more liquidity than DAI out of the gat. Could use a sentence or two, or it seems like hopium or speculation.

@rune

The use of AI tools help level the playing field between deeply embedded insiders and more peripheral community members, by making it possible for anyone to participate at a very high level with all relevant facts and nuance available, and audit and verify decisions and actions by insiders in real time.

This a brilliant and necessary idea in theory. But how will outsiders check if and when the AI helpers make up stuff, or “hallucinate” as some call it. AI tools have very large fidelity issues, especially with strongly formalized systems.

Recommending later developments not to be contingent on AI development being where it needs to be for this to work.

@rune

NewChain will be a blockchain that houses all backend logic for SubDAO tokenomics and MakerDAO governance security. This means that on Ethereum, NewStable and NewGovToken, as well as Dai and MKR, will continue to function as normal, and the only change will be that they will be protected by a governance backend that operates through a secure, state of the art bridge.

Strongly recommend looking into Eclipse and EigenLayer, and using ETH rollup-as-a-service as a tech stack. We don’t have to leave Ethereum

[wisehermes]

Isn’t transitioning Dai to a newstable token going to fragment liquidity and give up the huge amount of integrations and brand power Dai has accomplished? Is DAI PR so bad that this is necessary to get to the next level of growth?

I like the new AI stuff.

Also RIP US OG MKR holders. Old investors absolutely get rekt with this plan, no wonder MKR is tanking right now.

[CodeKnight]

@rune

The key feature of NewChain is the ability to use hard forks as a governance mechanism to recover from catastrophic governance disputes where an attacker with majority voting power forces minority token holders to shut down the protocol, or where an attacker abuses the ability to shut down the protocol.

How does a minority convince other chains that their hardfork is the real one?

This also seems like it introduces a powerful new attack vector. Governments can force NewChain to hard fork more easily than they can force Ethereum to hardfork. MKR is a much smaller token and will have a much more centralized distribution, even with years of yield farming rewards.

[rune]

@flipsidegov

This a brilliant and necessary idea in theory. But how will outsiders check if and when the AI helpers make up stuff, or “hallucinate” as some call it. AI tools have very large fidelity issues, especially with strongly formalized systems.

Recommending later developments not to be contingent on AI development being where it needs to be for this to work.

This is an important point and something that is core to the design. The key will be to not have AI actually “run” governance, but just use it as a redundant assistant tool that is especially optimized to help participants that are more on the periphery of the ecosystem, and aren’t necessarily able to spend full time diving into the deep nuances of Maker Governance. With Governance AI Tools they have a chance to find out what’s going on, and be directed towards which areas they should be focusing because there is more critical data or controversy. Ultimately, in case of significant internal failure the Governance AI Tool may alert outsiders to wrongdoing or negligence by insiders that are operating within areas that would normally be completely obscured due to complexity, so they enable a lot more parallelization and specialization without putting governance security at risk.

Actual decisions should be done by domain experts, primarily the Advisory Council Members, but AI tools can be a massive productivity boost by helping them dealing with paperwork, reporting, and formatting everything correctly according to the Alignment Artifact data structure, so they can focus just on being subject matter experts and don’t have to wrangle with governance complexity.

False positives can be dealt with by ensuring that the AI tools are never relied on as the source for any decision, but that they simply help with automating boring work or paperwork, and are used to get suggestions for where to direct attention or how to learn about an advanced concept.

[rune]

@wisehermes

Isn’t transitioning Dai to a newstable token going to fragment liquidity and give up the huge amount of integrations and brand power Dai has accomplished? Is DAI PR so bad that this is necessary to get to the next level of growth?

The Allocator Vaults will be able to inject vastly more liquidity than Dai currently has to markets like uniswap and curve, with much greater flexibility. So in the market places that users actually use, there will be very deep liquidity - it will be like a PSM but everywhere on-chain.

Dai will remain and will be the undisturbed OG stablecoin with no flashy features, and its liquidity will always be bootstrapped by the unlimited 1:1 conversion to NewStable.

[rune]

@CodeKnight

How does a minority convince other chains that their hardfork is the real one?

How to determine forks will be specified in the Alignment Artifacts. Arranged Structures that hold real world assets will then transcribe these rules into their own bylaws, and as a result be able to deterministically pick a fork in case of e.g. a simple governance attack, or the most likely attack, which is a malicious minority-triggered shutdown.

For more complex shutdown events where the Alignment Artifacts can’t provide total clarity, it’s possible that the protocol will not be able to recover. To deal with this we have to use the AI tools to predict as many governance breakdown or protocol shutdown scenarios as possible and define deterministic restart procedures for as many as possible.

This also seems like it introduces a powerful new attack vector. Governments can force NewChain to hard fork more easily than they can force Ethereum to hardfork. MKR is a much smaller token and will have a much more centralized distribution, even with years of yield farming rewards.

This does introduce some new attack vectors, but they are orders of magnitude less serious than the current apex threat we face, which is a malicious minority triggered emergency shutdown. Currently it would cost relatively little to do and it would completely destroy the ecosystem and likely also cause significant damage to Ethereum. A hard-forkable blockchain is the only known solution to this problem and we can’t wait around for a hypothetical solution for Endgame, so the best option available is NewChain. The current latest proposed mechanics of the Two-Stage Bridge that will protect the ETH and Staked ETH collateral of the system are described in the May proposal for the Alignment Artifact in ATL4.4 MIP102c2-SP7: MIP Amendment Subproposals - #7 by rune

The basic idea is that the economic significance of a decentralized asset should scale with the number of universally aligned and fully decentralized DAOs that run on its blockchain, so the security of the bridge should remain safe as the ecosystem scales.

[truename]

@rune

All SubDAOs reuse key governance processes and tools from MakerDAO to streamline their operations, and can maintain high quality governance with relatively small and hobbyist communities due to their shared access to the cutting edge core AI tools for governance provided by MakerDAO.

In Phase 2 will Aligned Delegates actively follow, have responsibility for or interact with the internal governance dynamics of subDAOs?

What level of engagement with and information gathering pertaining to subDAO activity, operations and external performance would be required for Aligned Delegates to best perform their Alignment Conserver function for Maker Core?

Do you have current views on how high performing Aligned Delegates would be organized and internally resourced in order to provide the best service in each of the phases?

Thank you,
True Name
Aligned Delegate following Resiliency AVC and Regenerative Finance AVC

[rune]

@truename

In Phase 2 will Aligned Delegates actively follow, have responsibility for or interact with the internal governance dynamics of subDAOs?

No and perhaps this is only implied in the artifacts currently, but Aligned Delegates can’t be affiliated with a specific SubDAO at all because that could easily cause conflict of interest. They should exclusively be sitting on the Maker Core side and help enforce the rules impartially on all SubDAOs.

What level of engagement with and information gathering pertaining to subDAO activity, operations and external performance would be required for Aligned Delegates to best perform their Alignment Conserver function for Maker Core?

I think this is a reasonable idea, having ADs gain reputation with AVCs by passively monitoring internal governance of SubDAOs for risks of misalignment, and look for information that helps AVCs with decisions, maybe towards things like the ecosystem actor incubation article in the support scope.

Do you have current views on how high performing Aligned Delegates would be organized and internally resourced in order to provide the best service in each of the phases?

The rules that are currently in effect based on the April version of the Maker Constitution, will be slightly modified with the May Alignment Artifact edits, to give a slightly higher income level for Prime Delegates and Reserve Delegates. The intention is that the level of income increases over time, if the value of the ecosystem increases, and this will give Prime Delegates the means to operate as small businesses likely with one or two principals and some support staff that work together to gather information, support AVCs, and protect the ecosystem from misalignment.

[CodeKnight]

@rune

How to determine forks will be specified in the Alignment Artifacts. Arranged Structures that hold real world assets will then transcribe these rules into their own bylaws, and as a result be able to deterministically pick a fork in case of e.g. a simple governance attack, or the most likely attack, which is a malicious minority-triggered shutdown.

The real world assets don’t depend on a hard fork though .They aren’t stored on chain and that is a battle that will need to be fought out in courts regardless of where MakerDAO lives.

The issue is how to tell the Ethereum blockchain(and other chains) which fork to follow. How is the ETH and DAI living on Ethereum going to know to follow the minority fork? Bridge security is a major unsolved issue as it is, without adding the complexity of supporting minority bridge forks.

@rune

which is a malicious minority triggered emergency shutdown.

How is that different from a minority being able to seize control by triggering a hard fork of the protocol?

[CodeKnight]

@rune

USA IPs and VPN users will be geoblocked from accessing all forms of farming and yield opportunities of NewStable and NewGovToken.

Will there be a blacklist of addresses that are known to be owned by US based entities?

[VonNeumann]

How will it be possible to block VPN users?

[rune]

@CodeKnight

The real world assets don’t depend on a hard fork though .They aren’t stored on chain and that is a battle that will need to be fought out in courts regardless of where MakerDAO lives.

Arranged Structures for RWA, as well as RWA issuers that issue directly to the blockchain without going through a bridge, will need to build into their legal structures how to resolve a hard fork based on the Alignment Artifacts. It’s critical that they can determine which blockchain is canonical because it determines where they have a legal obligation to follow governance instructions or process redemptions.

The issue is how to tell the Ethereum blockchain(and other chains) which fork to follow. How is the ETH and DAI living on Ethereum going to know to follow the minority fork? Bridge security is a major unsolved issue as it is, without adding the complexity of supporting minority bridge forks.

The technical specification of the two-stage bridge that I linked to above in the Atlas should be the best resource answer this question. In normal conditions fork choice is determined by the newchain validators, but a minority of NewGovToken holders can trigger the fallback mechanism which puts a fallback multisig in charge, which ideally consist of the major decentralized governance ecosystems on the destination blockchain of the bridge.

How is that different from a minority being able to seize control by triggering a hard fork of the protocol?

The difference is that in the current system, a malicious shutdown results in the guaranteed catastrophic end to the project and all Dai users being forced to undergo a global redemption process which will likely result in massive legal and operational issues, as well as extreme volatility during this period. If Dai scales enough it could also cause serious damage to underlying decentralized collateral so that the end result of the redemption is much less than par.

With a hard-fork based emergency halt system instead, a hard fork will be something that can be drilled in advance, to ensure it can be done rapidly and smoothly. In case of a malicious emergency halt, the ecosystem, including the fallback mechanisms of the two-stage bridges, will just immediately switch to the canonical redeployment where the attackers gov tokens have been burned. This might result in the blockchain being unavailable for some minutes to hours depending on how often the redeployment drills are done (potentially causing small scale temporary depegs on other blockchains), but once the ecosystem has switched to the redeployment everything will just continue uninterrupted with no losses, legal uncertainty or instability of the stablecoin.

[GFXlabs]

@rune

but a minority of NewGovToken holders can trigger the fallback mechanism which puts a fallback multisig in charge, which ideally consist of the major decentralized governance ecosystems on the destination blockchain of the bridge.

We advise thinking carefully about this arrangement, as it may not be as secure or decentralized as is being assumed. Two major issues should be considered if going with this kind of setup.

First, getting a decentralized governance to act in a timely manner or coordinated with other governances may not be trivial. Even a successful implementation where all of the signers have consensus could take weeks. Most decentralized governances have processes for review, voting, and then a timelock, so using an misg of other governances would not be a quick resolution even in the best of times. If there is disagreement internal to those governances, this could further delay any action.

Second, if there are 7 different governances on the msig, that may in practice be only one or two entities guiding the decision-making process. Whether funds that own the governance tokens or professional governance service providers, it is likely that there will be common actors across the limited choices for msig signers.

Using ourselves as an example, GFX is holds votes across most of the major protocols on Ethereum, and would almost assuredly be intimately involved in the process you’re describing here. StableLab and Flipside Crypto are likewise situated across most of the candidates for decentralized signers on Ethereum. The same handful of investment funds are found over and over at governances, as well. On chains less mature than Ethereum, this common ownership/delegation is even more pronounced (especially given how few decentralized governances actually exist on most chains).

[0xEvan]

What is the rationale for creating a new chain vs using an existing chain like gnosis, which uses xDai as a network token already?

[pcfreak30]

Hmm. Why is everyone avoiding answering the USA IP/VPN question… Feels like the elephant in the room especially since it’s pretty much impossible to actually do perfectly.

[Ber10]

Why would anyone think its a good idea to make an entirely new chain for Maker. This seems idiotic. Rune do you understand how rollups work ? Why would you make a low security high centralization chain to set this all up ? Why deal with consensus only to get inferior security ? Why not customize a rollup ? What is the advantage of having a chain ? Because of hardforks ? You should not focus on how to optimize governance. You should focus on how to ELIMINATE human influence.

Reading the endgame gives me a headache its so convoluted. I dont understand what the benefits of making an entirely new L1 is. I dont understand the direction Maker is going in.

I think Maker totally lost the plot. Well I am glad that my money served to be part of this experiment. When I initially invested in MKR I did it under completely different promises and expectations. I feel like a fool for believing into this project. All this talk about how the burn doesnt work and that MKR owners are entitled to protocol revenues but not now only in the future. A future that never comes. Burning worked, the price action looks like ass since it was turned off.

Instead of focusing how to generate value for the MKR token and how to expand DAI supply. All the money and energy that once was there were squandered and used for funding useless people/garbage. All the money and research should have gone into researching how to make Dai/MKR autonomous! Remove all people. Remove governance. Thats it.

Btw how come the surplus buffer is melting? Have some restraint, lower your expenses. I wonder who actually controls everything. Many years ago I thought that the burning mechanism was immutable and coded into the platform, what an idiot I was. All those systems like the surplus buffer are exploited and governed by humans.

It should be MakerO and not DAO because its neither autonomous nor decentralized. That is false advertising, as so many things were falsely advertised. There will be pressure to decentralize. ALL defi protocols should work towards removing the human element completely. I thought once that this was the goal. Governance should have been temporary as long as necessary but not longer.

[neozaru]

My main comment on this is more “meta”.

In short, my question could be summarized as such:
“What makes us think that a global pre-planned endgame plan will provide a greater outcome than, say, fixing problems as they come and iterative improvements ?”

Apart from the blockchain part of the endgame, the “what” is pretty descriptive but there is very little on the “why”.
What are we trying to achieve ? What problems are going to be solved ? Etc…

[truename]

Excellent questions. You may find this post is responsive. Note it was written in March pre-ATLAS Alignment Artifacts, so some terms and concepts for Endgame have been refined since then.

The chief identified problems the Endgame is designed to solve :

@rune

The Complexity Spiral

Problem: The current governance process has become increasingly complex, with over 100 MIPs, many of which are unknown, inconsistent, or abandoned. Additionally, there are numerous unwritten, implicit rules, many of which impact decision-making more than the documented ones.

Solution: Endgame introduces clear and specific rules through the Maker Constitution and Scope Frameworks. These rules aim to stabilize the governance process, make all rules explicit, and streamline or reduce them over time to make sure the focus remains on what’s critically important. The approach of explicitly documenting all rules and processes also lays the foundation for transferring most of the complexity to SubDAOs.

Voter Apathy

Problem: Low voter turnout in Maker governance leads to centralization risk and vulnerability to governance attacks or forced emergency shutdowns. Typically, a few whales make key decisions.

Solution: The Sagittarius Engine (SE) Governance Participation Rewards incentivize MKR holders to easily delegate their MKR through the Easy Governance Frontend and helps increase the chance they are aligned with other MKR holders through the skin-in-the-game aspect of SE exit fees.

Delegates continue to play a crucial role in Endgame, serving as stewards of most of the voting power that results from the Governance Participation Rewards. This powerful position could be dangerous to the system without proper checks and balances since delegates might wield control without accountability or skin in the game as they don’t need to hold MKR.

CVCs act as the primary check on delegates, ensuring that MKR holders have a clear line of sight and can easily comprehend all critical decisions. This is why CVCs are integral to Endgame.

The Relationship Problem

Problem: The current governance system is slow and single-threaded, making it challenging for thousands of token holders to coordinate and manage delicate relationships with core unit members and collateral counterparties. Combined with the complexity spiral problem, this becomes highly problematic at scale, leading to conflicts, drama that hinders progress, and potential conflicts of interest that are difficult to detect and could in extraction of significant value from the protocol over time.

Solution: SubDAOs serve as a decentralized layer between Maker Governance and counterparties and contributors. They facilitate conflict resolution and relationship management while reducing the chance it spills over to other parts of Maker. Politics and drama can never be completely eliminated in truly decentralized DAOs, but SubDAOs that develop strong communities and counterparty networks can grow and execute without being slowed down by distractions from potentially dysfunctional relationships in other SubDAOs, and eventually those SubDAOs can then either be fixed or simply replaced by new SubDAOs that start fresh.

Growth

Additionally, a last problem is that the Dai supply isn’t growing and we don’t have effective means of distributing Dai or attracting more users. The SubDAOs in particular will help with this significantly because they can execute on growth strategies in parallel, and can use unique branding to specialize in attracting specific demographics, instead of being forced to try to make one-size-fits all distribution strategies. Then there’s also the SubDAO token farming element, where users may be attracted to use Dai and participating in the Maker Ecosystem because they can get SubDAO tokens for free through a fun and user-friendly gamified experience.

[rune]

Made some edits to this post to make it up to date with my latest atlas edit proposals.