These Are the New Tokens MakerDAO Will Launch

MakerDAO Founder Rune Christensen has confirmed that MakerDAO will launch Phase 1 of the “Endgame” plan in Summer 2024.

Phase 1 of MakerDAO’s Endgame will lay the foundation for structural reforms of the decentralized autonomous organization (DAO) by introducing the new tokens. 

MakerDAO Evolution: New Tokens

The new tokens, codenamed NewStable and NewGovToken, will provide users with enhanced options for participation and investment within the ecosystem. They are the second stage in MakerDAO’s plan, which starts with a brand reveal and ends with enhanced staking and yield farming opportunities.

MakerDAO has enjoyed success with its MKR governance token and DAI stablecoin. DAI’s price stays at $1 through a mechanism that adjusts the fee for borrowing DAI based on the number of tokens in circulation. Users must deposit a certain amount of ETH in a Maker Vault to receive the number of tokens determined by the stabilization algorithm.

In the Endgame scenario, DAI will serve crypto-native use cases, while NewStable will target broader, mass adoption scenarios. The Lockstake Engine (LSE) will expand the protocol’s governance mechanisms and encourage participation in the ecosystem through crypto staking. And, a new low-cost bridge will improve blockchain interoperability.

Read more: Dai (DAI) Cryptocurrency: A Beginner’s Guide

Following its launch of Spark Lend, MakerDAO will also launch SparkDAO, a so-called SubDAO designed to reach real-world assets and perpetual swap yields. The development of SubDAOs will improve MakerDAO’s scaling amid anticipation of a new Layer-1 blockchain.

SubDAOs will also allow sustainable yield farming opportunities and improved user engagement through its tokenomics.

The Ups and Downs of Endgame

The MakerDAO community approved the Endgame plan by blockchain voting in August 2022, following years of preparation in technology, legal frameworks, and community building. Phase 1 will usher in structural reform roughly ten years after Christensen conceived MakerDAO.

Maker’s DAI stablecoin was among the first algorithmic stablecoin variants to keep its US dollar peg through financial engineering. However, the project has come under threat from the broader crypto markets.

Users must deposit ETH to receive DAI as a loan without a fixed term. Nonetheless, an unfavorable market that plummets the price of ETH can cause DAI loans to become undercollateralized and trigger a wave of liquidations, as occurred in 2020.

The liquidations totaled around $5.7 million as of March 16, 2020, drawing attention to the need for better crisis governance. MakerDAO has not indicated in its Endgame launch post how the new governance tokens can overcome past failures, but Christensen highlighted the need to move fast in the bull market.

“It will be necessary to execute some changes with the bootstrapping fast-track process, as we are not just navigating the preparation for launch, but also the ongoing bull market, which demands a faster pace of action,” Christensen wrote.

Read more: Maker (MKR) Price Prediction 2023/2025/2030

Following the passage of the Endgame proposal, MakerDAO’s Sébastien Derivaux questioned the objectivity of the MakerDAO Endgame vote. He alleged Christensen influenced 60% of the voting addresses.