Original author: Co-founder of MakerDAO Rune

Translation: Jaleel, BlockBeats

Editor's note: On August 5th, the MakerDAO community voted in favor of the "Enhanced DSA Activation, Spark Protocol Debt Ceiling Increase, RWA Treasury Update, Q2 2023 AVC Member Compensation, Monetails Clydesdale DAO Resolution, Project Funding Launch, Spark Proxy Spell Execution" execution proposal. The proposal was executed on August 7th Beijing time.

According to the Spark Protocol page of MakerDAO's lending protocol, the DAI Savings Rate (DSR) has been increased to 8%. In addition to raising the DAI Savings Rate to 8%, other major protocol changes include increasing the maximum debt ceiling of the Spark Protocol Direct Deposit Module from 20 million DAI to 200 million DAI; decreasing the RWA 004-A debt ceiling from 7 million DAI to 0 DAI, and implementing updates to the RWA 002-A protocol; allocating 134.1 MKR to AVC members; updating the DAI interest rate strategy in the Spark Protocol and decreasing the DAI Market Loan-to-Value (LTV) from 74% to 0.01%, lowering the DAI liquidation threshold from 76% to 0.01%, reducing the WETH Market Reserve Rate from 15% to 5%, and decreasing the variableRateSlope 1 of WETH from 3.8% to 3%.

After the DAI Savings Rate (DSR) was increased to 8%, whales have started to take action. It has been monitored that a whale sold 5,640 ETH on-chain yesterday in exchange for 10.32 million DAI (with an average selling price of $1,830), and borrowed 4 million DAI by collateralizing 5,400 wstETH, then deposited the 14.32 million DAI into MakerDAO to earn the current 8% APY. The current TVL of the DAI pool has exceeded 400 million dollars.

This article was written by Rune, co-founder of MakerDAO, on Twitter on August 7th. Rune introduced the upgrade of DAI and MKR to a unified brand with temporary codenames: NewStable (NST) and NewGovToken (NGT), as well as all the key elements of Maker Endgame. The following is the translation of the original article by BlockBeats:

The current decentralized finance system is broken, and it's time to replace it with a system that benefits everyone. Maker Endgame achieves this through the power of DeFi and DAO: overcoming their weaknesses, amplifying their strengths, and driving accelerated growth of DeFi.

We mostly stay here to experience the cryptocurrency winter because we know that if blockchain technology can have meaningful applications in the global financial system, it will unlock undeniable and incredible benefits for the world.

The key to a decentralized financial system is decentralization and transparency in its underlying governance infrastructure. The users of this system must also be the ones in control of the system. This is where DAO comes in. DAO itself is an amazing, transformative technology. In theory, it is a system that allows strangers to freely cooperate and benefit from each other on the internet while making the world a better place.

But in reality, things are not as simple. It has been proven that most people only care about their personal interests. Therefore, we encounter coordination problems with DAO. In theory, it is a system that allows strangers to freely cooperate and benefit from each other on the internet while making the world a better place.

Maker is the oldest DAO and controls the largest decentralized stablecoin. Our annual revenue is $142 million and project expenditures are $44 million. At this scale, we have been struggling with coordination problems for many years. But through Endgame, we have finally found some answers.

Alignment Engineering is a decentralized solution that keeps all participants in DAO aligned. The goal is to make collaboration an easy choice. Alignment Engineering is like a puzzle, where every part and process in DAO must contribute to maintaining alignment.

Endgame is our attempt to achieve this by completely transforming Maker governance and the Maker protocol. It is our final effort to realize the utopian future of a decentralized financial system. Endgame is the actual implementation of Alignment Engineering within the Maker ecosystem, gradually developing the ecosystem in four major aspects over the course of approximately one year.

Brand Redesign: Upgrading MKR

Previously, the Dai and Maker brands were separate, and so were their user bases. We hope to change this by establishing a new unified brand that brings more consistency between users and governance.

The key point is: DAI and MKR will continue to exist! Upgrading is an option. The new unified brand will focus on making it as easy as possible for people to start using stablecoin products, DAOs, or both.

The temporary codenames are: NewStable (NST) and NewGovToken (NGT). The repricing of MKR to NGT in the upgrade is 1:12000. NST will be able to mine NGT tokens.

It's Time to Build Sub DAOs

They are undoubtedly the main feature of Endgame, and their impact and advantages could potentially change the entire industry.

The basic idea is that we want to avoid having one complex DAO by separating advanced features and innovations into different SubDAOs. Regular holders of NewStable (NST) can mine the tokens of these SubDAOs for free. These self-organizing communities can then innovate, build, and distribute products on top of the core DAO, generating revenue. By doing so, they can benefit and contribute to the development of the entire ecosystem. Let's take Spark DAO as a concrete example.

Let's use Spark DAO as a specific example. SPK is one of the six initial SubDAO tokens that can be mined quickly with NST. It already has a ready-to-use product: http://Sparkprotocol.io

Each Sub DAO is unique, and which one you mine depends on which community you want to participate in. Sub DAOs only become effective when there is a significant number of NGT voters participating in setting the governance boundaries.

Voting for Governance Strategies by Locking NGT Tokens

Locking creates two groups of NGT holders: regular holders and locking holders.

Ordinary holders do not care about governance. But lock-up holders have a significant interest in advocating and guiding the direction. Lock-up holders must vote, and they also need to easily provide useful input to the system. Voting in Endgame feels like an election. Lock-up holders only need to choose their favorite governance strategy once a year, and the strategy will be automatically executed.

Combining AI Tools to Aid Governance

To further align the ecosystem, we have implemented a comprehensive set of rules called Atlas. Atlas sets objective boundaries, rules, and best practices for sub-DAOs, lock-up holders, and other participants. All valuable shared knowledge within Atlas is available for the entire ecosystem free of charge. The challenge of formally and explicitly formalizing all information related to effective DAO governance is that the Atlas dataset will be very large. We overcome this issue by providing free AI tools as an interface layer. Using Atlas is quick, user-friendly, and extremely powerful.

However, this does not mean that the core DAO or sub-DAOs will be "run" by AI. The AI tools will simply enable even amateur participants to easily comprehend and interact with the knowledge and rules of Atlas. This means that anyone can help inspect and constrain insiders.

The final and most important piece of the Alignment Engineering puzzle is the target system.

It is an immutable financial commitment to the public interest, ensuring that the ecosystem attracts good-hearted individuals who are naturally aligned and capable of suppressing dissonance. If you are interested in contributing to making this vision a reality, please join our discord. I will be giving a presentation at the Korean Blockchain Week in September, providing more details and updates.