Conversation with MakerDAO Lianchuang: Can the Final Plan fix the bad status quo of DAO governance?
The peak of the last bull market was when Rune Christensen was most disappointed with DeFi and DAO. In the latest episode of the Unchained podcast, Christensen said, “I don’t even know how MakerDAO will survive.” Now, Christensen is helping the DAO climb out of its trough of disillusionment. Will MakerDAOs ambitious endgame plan aimed at overcoming the core issue of voter apathy work or is the DAO doomed, he said?
The following is the main content of this dialogue, which was translated and organized by Shenchao, and the main points were output:
Host: Laura Shin, Unchained Podcast
Speaker: Rune Christensen, co-founder of MakerDAO
Video Attribution: Unchained Podcast
Original title: Can Makers Rune Christensen Fix the Sad State of DAO Governance?
Column:Link
Release date: August 23
Why does MakerDAO need major changes?
Christensen proposed significant changes to MakerDAO, which will be adopted. Laura asked him why he wanted to implement this change, especially considering that MakerDAO was already stable.
Christensen explained the history and vision of MakerDAO, emphasizing that it was born in the relatively early days of Bitcoin and Ethereum. MakerDAOs goal is to create a decentralized stablecoin that is not affected by the traditional financial system and can provide stable value to global users. Although the crypto market has experienced several bull runs in recent years, progress in the DeFi space has remained stagnant, meaning that despite a large amount of funding and interest in the market, innovation and applications are not developing at a rapid pace.
Christensen believes that part of the stagnation in the DeFi space is due to challenges faced by DAOs (decentralized autonomous organizations). DAOs are designed to decentralize decision-making, making it a true democratic system where every member has a say. In practice, however, this decentralized decision-making process is often inefficient and susceptible to influence by large token holders (i.e., “whales”) who may act in their own interests rather than those of the community as a whole. Come vote. Additionally, many DAO members may express apathy toward voting, resulting in a lack of broad community participation in the decision-making process.
Christensen noted that despite being the oldest DAO, MakerDAO has had significant difficulty managing and controlling its operating expenses. These expenses may include technology development, marketing, community management and other expenses related to the operation of the project. Due to the difficulty of fee management, MakerDAO creates internal coordination issues, so the decision-making process is complicated and inefficient due to possible disagreements between different teams and community members.
Christensen believes that as MakerDAO and other DAOs grew and expanded, the idea of harmonious, shared decision-making that was originally hoped to be achieved began to break down. This may be because reaching consensus becomes more difficult as the number of members increases, and more conflicts of interest and strategic disagreements may arise.
Proposal of MakerDAO’s “Final Plan”
Christensen detailed his “endgame plan” for MakerDAO, mentioning four phases. Christensen emphasized that the core goal of this endgame plan is to ensure MakerDAOs long-term stability, continued growth and continuous innovation.
Rebranding: In order to better communicate with the community and the market, MakerDAO needs to rebrand. Its not just about the visual identity, its more about how to better communicate its core values and vision.
Sub-DAO: A small, focused DAO operating within the MakerDAO framework. Each sub-DAO has its own specific goals and tasks, such as processing loans or assets in a specific area. This structure allows for faster, more flexible decision-making while maintaining overall collaboration and consistency.
Voting rewards: This incentive mechanism can ensure that more members actively participate in the decision-making process, thereby strengthening the democracy and decentralization of the DAO.
Governance AI tools: To help members make decisions more effectively, governance is aided by the development of AI tools that can analyze large amounts of data to provide members with insights into the possible impacts and outcomes of various proposals.
Christensen explained why they chose the name Endgame. He mentioned that the name was chosen because they wanted MakerDAO to achieve a state similar to Bitcoin, with a higher level of certainty and reliability.
Laura mentioned that the well-known venture capital firm a16z expressed opposition to Christensens endgame plan and asked why the MakerDAO community still decided to adopt it.
Responding to this objection, Christensen explained that he is the most active large token holder in MakerDAO. More importantly, he stresses that he is a true volunteer, meaning that his decisions and recommendations are based on his belief in the project and commitment to its long-term success. He proposed this plan because he genuinely believed it would be good for MakerDAO, and if he didnt think it would do any good, he wouldnt have proposed it.
Laura Shin mentioned that Christensen holds a large number of MKR tokens, and she asked whether a single large holder might be an issue for a governance token, as this could lead to imbalances or bias in the governance process.
Christensen explained that this actually has to do with Phase 4 of their Project Endgame. He noted that the goal of this phase is to address the core issue of voter apathy, which they will begin to address once everything else is in place. This means that they are aware of the problems that a single large holder can bring and plan to solve it in the final stages of the endgame plan.
Phase 1 of The Endgame: Rebranding
Christensen described the first phase of MakerDAOs endgame plan, centered on the rebranding of the token, which means MakerDAO will make some major adjustments to its existing tokens to better reflect their value in the market and positioning.
Laura Shin asked why MKR and DAI were not simply renamed to resolve confusion or issues related to the branding.
Christensen explained that it would actually be difficult to rename the tokens. Renaming is complicated because on the blockchain, each token has a certain identifier that not only provides uniqueness to the token on a technical level, but also in the community and the market. An identity is established for the token. Sudden brand or name changes can cause panic or confusion among users, and in the cryptocurrency space, any major change related to a token or project can lead to a market reaction that may be detrimental to the stability and credibility of the project.
Christensen further emphasized that he sees no need to bother users who are already familiar with and enjoy using DAI and MKR. These users have already built trust and loyalty to these two brands, sudden changes may damage this trust, users should have the right to choose the version of the stablecoin they want to use, whether it is a new stablecoin or original DAI.
Christensen proposed allowing users to freely switch between the new stablecoin and the original DAI. He believes that as the cryptocurrency market develops and user needs diversify, providing this switching capability becomes particularly important.
Christensen believes that different users may have different needs and preferences. For example, some users may prefer the new stablecoin because it may offer better stability or other advantages; while others may prefer the original DAI because they are used to it or think it is more reliable, through By allowing users to switch freely, MakerDAO ensures that these different needs are met while also giving users more power and control.
Christensen emphasized the importance of providing flexibility to users. He believes that flexibility can not only enhance user trust and satisfaction, but also encourage more users to participate in and use the MakerDAO platform. If users feel they are forced to use a particular stablecoin and have no other options, this can cause them to lose faith in the platform or look for other alternatives.
Christensen also mentioned the importance of ensuring the entire switching process is risk-free. In order to gain the trust and acceptance of users, it must be ensured that they will not face any risk or loss when switching stablecoins, and the entire switching process should be simple, safe and reliable, and they should feel at ease.
While it is good to provide users with more choices, these choices must be easy to understand so that users can make decisions easily. For example, any changes related to stablecoins, whether technical or branding, should be transparent. This way, users can clearly understand what is happening, why it is happening, and what it means to them.
And, communication and education with users is crucial. When new features or changes are introduced, there should be adequate education and communication to ensure that users understand these changes. This communication can not only help users better understand and use new features, but also ensure that they dont Feeling confused or overwhelmed by something.
Phase Two of “The Endgame”: The Big Release
Christensen introduced the second phase of MakerDAO’s “endgame plan,” which he called a “big launch.” This phase is not just a simple update or improvement, but a comprehensive strategy aimed at revolutionizing MakerDAO and the entire cryptocurrency industry. If the mega launch of the second phase is properly executed and promoted, it has Potential to change the entire cryptocurrency industry.
Christensen emphasized that MakerDAO is not just to meet the current market needs, but to create an ecosystem that can continue to innovate and develop in the long run. Their goal is to do something that has never been done before, which means that they are not just following the trend of the market, but trying to set new standards and directions for the market.
Christensen believes that in order to maintain MakerDAOs leadership in the cryptocurrency industry, continuous innovation is the key. In the second phase, they try to introduce some unprecedented functions and strategies. These innovations aim to improve the efficiency, security and user-friendliness of MakerDAO, and also provide new ideas and directions for the entire cryptocurrency industry.
Christensen expressed optimism about the future of MakerDAO. He believes that through the second phase of the Endgame Plan, MakerDAO will further consolidate its leading position in the cryptocurrency industry and provide users with more value and opportunities.
Christensen described the six new DAOs and six new governance tokens they plan to launch, which is MakerDAO’s strategy to further decentralize and optimize its governance structure, simplify MakerDAO’s core structure, make it more efficient and user-friendly, and In order to encourage community members to participate more actively in the governance and development of MakerDAO by creating new governance tokens.
All advanced functions and innovations will be dispersed into these sub-DAOs, which will be responsible for specific functions or tasks, such as stablecoin management, risk assessment or marketing promotion, etc. In this way, each sub-DAO can focus on its specific task without worrying about other unrelated issues, so that each sub-DAO can work more flexibly and efficiently.
The Third Phase of the “Endgame Plan”: Community Incentives
Christensen discusses how child DAOs can be used to incentivize user participation. He mentioned that each sub-DAO can develop its own incentive mechanism according to its specific goals and strategies. This could include token rewards, a reputation system, or other forms of incentives. In this way, the sub-DAO can not only attract more users to participate, but also ensure that these users remain active and active during the participation process.
Christensen also mentioned the potential of sub-DAOs to address user apathy. He believes that user apathy can be effectively addressed by providing users with programs and opportunities that are specific and relevant to their needs and interests. He emphasized that in order to ensure the active participation of users, they must be provided with opportunities and incentives that are truly valuable.
Christensen emphasized the importance of encouraging long-term user engagement. He believes that in order to ensure the continued success and stability of MakerDAO, the long-term and continuous participation and support of community members is required. While short-term rewards and incentives may attract users attention, their goal is to ensure that users are not only engaged for short-term gain, they want users to truly understand and support MakerDAOs vision and goals.
Christensen detailed how they encourage long-term engagement by offering different rewards and incentives.
Token Rewards: Strategies that provide users with token rewards that can increase in value in the future, thus encouraging long-term holding and participation.
Reputation system: Users can gain reputation based on their contributions and participation, and this reputation can be used to obtain specific benefits or rewards.
Education and Training: Provide education and training to users to help them better understand how MakerDAO works and how to participate.
To ensure long-term engagement with users, it is imperative to build trust and relationships with them, which can be helped to be built by providing transparent information, timely feedback and ongoing support.
Phase 4 of The Endgame: Governance AI Tools
Christensen introduced the fourth phase of MakerDAO’s “Endgame Plan” and emphasized that the core of this phase is the implementation of governance AI tools.
Christensen emphasized that as the complexity of MakerDAO and other DAOs increases, it becomes increasingly difficult to manually manage and monitor all decisions and interactions. The introduction of governance AI aims to reduce this complexity, they can automate a large number of daily governance tasks such as voting, proposal review and other decision-making processes, which not only speeds up the decision-making process, but also ensures that decisions are based on data and predetermined rules , rather than based on personal bias or emotion.
Christensen further pointed out that governance AI is not just a static tool, it has the ability to learn and adapt, which means that it can optimize future decisions based on past data and decisions, ensuring continuous improvement of the system. By governing AI, MakerDAO can greatly reduce human intervention and potential conflicts, which can ensure a more fair, transparent and bias-free governance process.
Christensen believes that governance AI can improve the reliability and stability of the system. Since decisions are based on predetermined rules and data, errors and inconsistencies can be reduced, thereby ensuring the stable operation of the system.
Finally, Christensen mentioned Atlas, an AI project under construction. The project centralizes all relevant data across the entire MakerDAO project. This centralized approach is designed to simplify information retrieval, making it easier for participants to find the information they need.
