Community divided after voting on “Endgame”.

The tornado cash ban in August this year by the US Treasury Department OFAC branch spooked one DeFi protocol in particular: MakerDAO, whose stablecoin reserves are largely made up of USD coin (USDC).

However, these can be frozen and disabled under central control, as some Tornado Cash users have found. Not long after the ban, unrest spread in the DAO of Ethereum’s largest DeFi protocol. Founder Rune Christensen feared for his decentralized stablecoin.

The recent vote on Christensen’s “Endgame” plan is now causing a sensation in the community, dividing the DAO of Ethereum’s unofficial central bank and showing the limits of crypto-democracy.

The Endgame plan

A “blacklisting” of his users or any other form of paternalism by regulators has never been an option for Christensen. In his opinion, it was therefore only a matter of time before Maker and the associated stablecoin DAI would become a target of the authorities.

The founder promptly forged a plan to protect DAI from any attacks and censorship attempts by the regulators – Maker’s “Endgame”. The aim was to liquidate the USDC reserves and other real financial assets (real world assets) that backed the DAI stablecoin and helped it to maintain parity. According to Christensen, USDC should be replaced with much more decentralized but also more volatile assets, such as Ethereum or its staking derivative stETH. And at the expense of parity.

The stablecoin should soon “float freely” and become the tuned key currency of the so-called “MetaDAOs”. They would act like divisions of MakerDAO, each with individual goals, incentives, and ROI opportunities for users.

The founder wanted to drastically reduce the influence of real world assets on the MetaDAOs. Instead, the Ethereum staking token stETH should become the new reserve and help makers to generate new income. Incidentally, the protocol would also have less attack surface.

But Maker’s $500 million investment in US government bonds testified to the discrepancy between the ideas of the founder and his community. And was a harbinger of the impending division of interests.

Is there a consensus?

Christensen’s restructuring of MakerDAO and the subsequent “MetaDAO Yield Farming” may sound a bit like megalomania. The founder is said to have described his protocol as the “most exciting and important place in the entire crypto space” after the upcoming changes are completed.

And with the necessary level of conviction, he made one in the community application for restructuring for voting. However, the DAO and the broader Web3 space met the fantasy mixed feelings. The pseudonymous crypto analyst Hasu berated Christensen’s intuition as an “extraordinarily bad suggestion”.

Hasu criticized the unbalanced relationship between meaningful change and unusual spinning. He is critical of the fact that Christensen pushed his proposal through in the vote without making any compromises.

At first glance, the matter was clear: around 74 percent voted for the endgame. However, it quickly turned out that only 15 percent of the tokens entitled to vote were used. And Christensen himself represented three-quarters of the voting rights. The accusation: the founder pushed through his quite drastic proposal quasi personally. Some users therefore complained about the “dismal” Protocol Governance Structure the MakerDAO.

The lack of voter turnout was actually one of the reasons for Christensen’s desire to restructure. He had previously criticized this and now apparently used it to his advantage, splitting the DAO at the same time. Decisive elections in the community are still pending.

From now on, however, the community is divided into supporters of the endgame, the MetaDAOists, and the constitutionalists, the opponents of Christensen and advocates of a more moderate reorganization. In Christensen’s world, the MetaDAOs are a more coordinated alignment of the more than 130 individual interests that have hitherto held back the productivity of the DAO.

The Sub-DAOs Makers would have their own voting tokens and a dedicated goal. The individual earnings models in the branched protocols actually also represent a new incentive for users and voters. The only question is: at what price?

With possible “DeFi killer laws” in the US, Rune Christensen’s concerns are justified. However, it remains questionable whether his courage will pay off or whether he will press the self-destruct button with his new plan.