MakerDAO Endgame: Launch Season
Endgame is a fundamental transformation of MakerDAO that improves growth, resilience and accessibility, with the aim of scaling the Dai supply to 100 billion and beyond.
This post provides the latest updates of the Endgame features that will be launched in the short- and long term.
The key feature of Endgame is to make savings fun with sustainable yield farming of SubDAO tokens. The SubDAOs are a unique ecosystem of highly efficient DAOs that draw on the power and infrastructure of MakerDAO, while remaining flexible and autonomous. There will be a SubDAO for every taste, and Dai users can simply choose which SubDAO appeals to them, and start farming the SubDAO tokens.
The virtuous circle of offering SubDAO tokens to all Dai users powers the SubDAO ecosystem by giving them new community participants, making them more vibrant and giving them the ability to adapt to every market opportunity and new innovation. This increases momentum and grows the intangible value of the SubDAOs in a virtuous cycle.
Preparing for launch
Endgame was first proposed almost two years ago, and it was approved by a governance vote in August 2022. Since that moment, the entire DAO has been going through an unprecedented structural transformation.
Until now, all of the work has focused on building core technology, tooling, legal structures, supplier networks, and everything else necessary to act as the foundation for the future limitless scale of the SubDAO ecosystem.
Finally, it is time to get ready for launch. As we get closer to launching the first components of Endgame, during the “Launch Season” phase, it is important to communicate what users should expect in more simple and tangible terms.
Phase 1: Launch Season
In Phase 1 of Endgame Launch all of the major features of Endgame are released in rapid succession. These are the most critical elements that drive the underlying growth engine. The goal is to quickly get a fully featured virtuous cycle where SubDAOs, tokenomics, the new brand and new user acquisition funnels all work together to produce exponential growth of Dai usage.
Launch Season is planned for summer 2024.
New Brand Reveal
The first release of Phase 1 is the reveal of the new brand.
The new brand, accompanied by a promo website, are designed to communicate the core pillars of the project: Making saving money with stablecoins fun and simple, and providing easy access to new and interesting tokens for free and with no additional risk.
The brand reveal phase will last a month, and during this time early adopters can sign up for a launch bonus that will increase their yield when the new tokens become available.
New Token Launch
A month after the New Brand Reveal, the two new tokens of the ecosystem will become available: NewStable and NewGovToken (actual names to be shared at Brand Reveal).
The Dai and MKR tokens will remain, but users will get the option to upgrade to NewStable and NewGovToken if they wish to access all of the new features that are coming to the ecosystem.
The ecosystem will explore ways to eventually differentiate Dai and NewStable, with Dai focusing on crypto-native use-cases and NewStable focusing on mass adoption.
NewStable
NewStable will be available for new users, and existing Dai users will be able to upgrade at will. NewStable users can also convert their NewStable to Dai freely.
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NewStable will be able to farm NewGovToken from the moment it launches, without additional risk.
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The rate of yield farming will be 600 million NewGovToken per year distributed to NewStable holders that are participating in the farm.
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Farming will not be available to US residents and VPN users.
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The real name of NewStable will be shared at Brand Reveal.
NewGovToken
MKR holders can upgrade their MKR to NewGovToken, and NewGovToken can also be converted back to MKR. The supply of NewGovToken is redenominated compared to MKR, so 1 MKR upgrades to 24,000 NewGovToken.
- This means every MKR holder can choose to get 24,000 NewGovToken for each MKR they upgrade.
- The real name of NewGovToken will be shared at Brand Reveal.
New user-friendly Website and app
To simplify access to key features of the ecosystem, including farming and savings rate, a new user-friendly website will launch alongside the new tokens.
It will provide access to all key features in one place, and be a friendly entry-point for newcomers to DeFi.
Lockstake Engine Launch
After the New Token Launch, the Lockstake Engine (LSE) will launch.
The Lockstake Engine (LSE) encourages long term governance participation by enabling MKR and NewGovToken holders to lock their tokens for a long term commitment that gives them more risk/reward exposure to the success of the protocol, and a greater incentive to participate in governance.
Both NewGovToken and MKR can be used in the LSE interchangeably, with one MKR counting for 24,000 NewGovToken.
Lockstake Engine rewards and yield farming
The main benefit of the LSE is yield farming. Users that have Lockstaked their MKR or NewGovToken can yield farm NewStable and the upcoming SubDAO tokens, including the SPK token from the Spark SubDAO. This means they receive NewStable or SPK tokens simply by having their MKR or NewGovToken locked in the LSE.
- 30% of all protocol surplus income earned by the Maker Protocol is distributed proportionally as NewStable rewards to LSE users that have chosen to receive NewStable yield.
- 30% of all SPK tokens earmarked for yield farming distribution are distributed proportionally as rewards to LSE users that have chosen to receive SPK yield.
- Lockstake Engine not available to US residents and VPN users.
LSE Exit Fee
In exchange for the benefits of using the LSE, and to encourage long term commitment and governance participation, NewGovToken and MKR tokens locked in the LSE pay a 15% exit fee when they unlock their tokens.
This fee is burned by the protocol, and is subtracted from the principal that was originally lockstaked. Rewards earned from yield farming with the LSE are unaffected by the exit fee.
NewGovToken Launch Airdrop
The NewGovTokens accumulated by early adopters during the Brand Reveal will unlock in the Launch Airdrop when the LSE launches, so that they can instantly be used to get the benefits of the LSE.
NewBridge Launch
Following the launch of the LSE, the first version of NewBridge will launch, connecting NewStable, NewGovTokens and other Maker Ecosystem tokens from Ethereum Mainnet to a major L2 (TBD). The real name of NewBridge will be unveiled at the Brand Reveal.
NewBridge enables low cost native farming of tokens on the supported L2, giving low cost access to all users. By integrating with a major L2 first, the ecosystem can take full advantage of the new Ethereum Dencun network upgrade that makes L2 transactions cheaper.
Bridges to additional major L2’s and L1’s will follow later.
Spark, a Maker SubDAO
The pinnacle of Launch Season is the much anticipated launch of SparkDAO, the launch of the SPK token and multiple SPK token farms
Spark focuses on providing innovative lending and DeFi products that can meet proven market demand at scale through the economic power of MakerDAO.
Spark is the first of Maker’s SubDAOs. It is a specialized, independent community, deeply tied to the Maker Ecosystem, but with autonomy and unique business models.
SparkLend
The main product of Spark is SparkLend, available on spark.fi
SparkLend is a modern lending engine where users can directly generate Dai, and in the future, NewStable, at predictable rates, using crypto as collateral. SparkLend launched a year ago, and is already very popular and widely used in the ecosystem, currently sitting as the 9th biggest DeFi platform by TVL in the world.
Users of SparkLend are already able to farm the Spark airdrop today, which will grant them SPK tokens when Spark fully launches.
Additional Spark business models
In addition to SparkLend, Spark will also gain some new business capabilities that will help create value for the Spark community at every point in the market cycle. These features will be built and shipped around the time of Spark launch.
Real World Assets
Spark will have the ability to deploy capital into Real World Assets, using the already well-established and proven RWA infrastructure of MakerDAO that has been battle-hardened by protecting more than a billion USD worth of RWA for over 2 years. Having access to RWA and the yield available in traditional finance complements the on-chain lending business model well, as it allows Spark to shift its exposure to whichever environment has the best risk-adjusted return.
Perpetual Swap yields
In addition to RWA, Spark will also gain the ability to tap into the yield available in crypto perpetual swap markets through mechanisms such as Ethena sUSDe. During bull markets this is a unique low-risk yield opportunity. The mechanism also synergizes well with a native lending engine and access to RWA yields, because Spark will be able to shift to wherever the best opportunities are available, something that continuously changes with market cycles and conditions.
Spark Tokenomics
The moment Spark Launches, the SPK token will be available to yield farm by NewStable users both on Ethereum mainnet and a major L2. Yield farming on the L2 will have very low transaction fees. LSE users will also be able to farm SPK tokens the moment Spark launches.
SPK farming with NewStable and LSE
The rate of SPK distribution will be 1 billion tokens per year the first 2 years, this will halve every 2 years until a total of 4 billion SPK tokens have been distributed after 10 years.
This total distribution will be divided so NewStable users will be farming at a rate of 700 million SPK tokens per year, and LSE users will be farming at a rate of 300 million SPK tokens per year. This rate will remain in place for the first two years following Spark launch.
SPK yield will not be available to US residents and VPN users.
NewGovToken farming with SPK
The SPK token will be able to farm NewGovToken immediately when it launches. This farming opportunity will be available both on Ethereum mainnet and a major L2.
SPK token holders will be farming NewGovToken at a rate of 80 million NewGovToken per year.
SPK pre-farming airdrop
It is currently possible to farm SPK tokens in advance of the launch of Spark. The tokens are earned by using SparkLend on spark.fi
Users of SparkLend can check the SPK tokens they’ve accrued so far on Spark | Block Analitica
The SPK tokens will be available for claiming at the moment of Spark Launch.
Spark Governance
Spark has a community governance mechanism controlled by SPK token voting. Over time Spark Governance will run all aspects of Spark autonomously, within the framework of the Maker SubDAO ecosystem.
At launch, SPK token holders will initially only manage Community Marketing and the Spark Purpose System. As time progresses and the Spark community strengthens, Maker will delegate additional responsibilities to the SPK token holders.
Community Marketing
The SPK token holders will be able to vote on community marketing grants to provide interesting, unique grass roots initiatives that can help promote the adoption of Spark Products, or increase the ecosystem around Spark.
Spark Purpose System
A key pillar of SubDAOs like Spark is that they must have a tangible purpose rooted in fundamental human values. This can be a charitable cause, scientific research, open source AI development - whatever it is, it must be a public good that benefits everyone, and it must reflect the values of the SubDAO community. The SPK token holders will have a small portion of SPK tokens available to provide as grants and payments in accordance with the principles of the Purpose System.
It will be up to the Spark community to figure out what their shared purpose and vision is, and to take positive action that realizes this vision.
Phase 2: Scaling up
Phase 2 begins once all the key launches have been realized during Phase 1. The Lockstake Engine, NewBridge, and the Spark SubDAO must be successfully launched and operational. Once the basic primitives of Endgame are in place, Phase 2 focuses on scaling them up vertically and horizontally.
This means more SubDAOs, such as RWA-focused or gaming-focused SubDAOs that cater to different communities and business models. In total 6 SubDAOs will launch during Phase 2 - each will cater to different market segments.
It also means more bridges, such as bridges to all major, popular L2’s like Arbitrum, Optimism or Base, or to other popular L1’s like Solana.
Finally, during Phase 2, the governance responsibilities of SubDAOs will grow to include full autonomy of all SubDAO activities, within the boundaries set by MakerDAO. The activation of full governance autonomy will happen slowly and deliberately as the SubDAO communities grow to become more capable.
The activation of SubDAO governance will be accompanied by powerful user interfaces and AI tools that help streamline and simplify governance decisions, making it possible for people who aren’t full time experts to still provide valuable input and oversight of the SubDAOs decisions.
Phase 3: NewChain
The final technical iteration of Endgame occurs in Phase 3 with the creation of NewChain - a stand-alone L1 blockchain that will host the core tokenomics and governance mechanics of Maker Core and the SubDAOs, and be a hotspot for RWA, DeFi and inter-blockchain bridging through the NewBridge system.
NewChain is an extension of the existing Maker ecosystem, and the launch of NewChain does not mean that Maker is leaving Ethereum. All of the user-facing products that exist on Ethereum today will remain, and more will be launched.
NewChain will be built several years out in the future as a fork of a suitable best-in-class blockchain codebase. Which codebase to use will be decided after a long period of research to ensure that the best possible architecture is chosen.
When NewChain is live, the SubDAO ecosystem will gain the ability to scale infinitely, with many more SubDAOs getting created at a much higher frequency.
Phase 4: Final Endgame
Final Endgame is the moment that all technical and foundational governance mechanisms have been completed, and there are no more developments to make beyond the permanent dynamics of Maker Core and the SubDAO Ecosystem. When Final Endgame is activated, all of the foundational governance mechanisms of Maker Core become immutable, achieving the ultimate vision of Endgame which is to make a dynamic, ever-growing ecosystem rooted in an unchangeable, reliable financial infrastructure built for the ages.
Governance changes to support Launch Season
In the coming months, leading up to the beginning of Phase 1, I will propose several major governance changes that practically implement the things mentioned in this post into the Maker Atlas.
To make the most of the launch and the opportunities we have to build momentum in the months leading up to the launch, I believe 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.
In the short run I will come back to the Maker governance community with more concrete proposals and plans of action for how we practically prepare and organize ourselves for maximum success and impact of this once in a lifetime opportunity.
