The Love-Hate Relationship Between MakerDAO and Vitalik Buterin

On September 2, Vitalik Buterin sold 500 MKR tokens worth approximately $580,000. This move has attracted widespread attention and seems to be related to MakerDAO founder Rune Christensen's announcement of plans to build a new chain based on the Solana codebase. This is the final step in Rune's proposed "Endgame" plan.

MakerDAO has been a protocol frequently mentioned by Vitalik since its inception. He has publicly praised MakerDAO as an impressive application on several occasions. However, Vitalik has also questioned the development direction of MakerDAO a few times. This article will briefly review the development history of MakerDAO and explore the changes in Vitalik's attitude towards the protocol at various stages.

Ambitious Birth

MakerDAO founder Rune Christensen initially explored launching the stablecoin Dai on BitShares. After research, he decided to build an on-chain dollar stablecoin based on Ethereum. In early 2015, Rune began sharing the initial code of the Maker protocol on Reddit. In December 2017, MakerDAO released its white paper, stating that initially Dai could only be collateralized with ETH.

MakerDAO has developed rapidly, attempting to use other ERC-20 tokens and tokenized gold as collateral in Q2 2018. The true multi-collateral (MCD) system was not launched until 2019, reflecting the difficulty of perfecting the ideal USD stablecoin protocol.

In September 2018, Rune stated that he was collaborating with multiple real estate tokenization projects, hoping to use real estate assets as collateral. This shows that MakerDAO's proactive positioning in the current RWA narrative is backed by evidence.

At that time, Vitalik had a high regard for MakerDAO. In an interview at the end of 2018, he expressed that MakerDAO left a deep impression on him and considered it one of the most complex protocols on Ethereum. Vitalik also pointed out that theoretically, the MakerDAO model could be extended beyond the US dollar to encompass any asset, consumer price index, or real estate index.

Encountering setbacks but continuously developing

In September 2018, A16Z invested $15 million in MakerDAO by purchasing MKR. By early 2020, the total supply of DAI reached 100 million tokens. However, in March of the same year, a market crash resulted in $5.3 million in bad debt, and MakerDAO overcame the crisis by auctioning MKR.

MakerDAO has recovered quickly, with bad debts dropping to around $100 by March 23. Subsequently, MakerDAO transferred control of the MKR tokens to the governance community. To address the decoupling, MakerDAO supported USDC as collateral through voting and offered high interest rates.

Vitalik has questioned the development path of MakerDAO, believing that a stablecoin protocol with a single collateral and minimal governance is needed. However, the community believes that a single collateral is insufficient to support the expansion of Dai's issuance, and the introduction of USDC helps Dai quickly return to stability.

Facing challenges and turning crises into opportunities

In mid-2021, the price of MKR reached over $5000. However, the subsequent Black Swan event on May 19 brought a huge shock to the cryptocurrency world. The biggest challenge faced by MakerDAO came from the algorithmic stablecoin UST. UST had a peak market cap of nearly $20 billion, and the Terra community behind it proposed the introduction of 4pool, trying to challenge the position of Dai.

However, on May 8, 2022, UST began to decouple. Terra founder Do Kwon was still saying on social media that there was no need to worry. Ultimately, UST and Luna collapsed, and Dai won this challenge, consolidating its position as the leading decentralized stablecoin.

In a subsequent article, Vitalik mentioned the stablecoin Rai, believing it better represents a purely decentralized, ideal type of stablecoin. Clearly, at this point, Dai is no longer Vitalik's preferred choice.

RWA Narrative Performance is Stunning

With the Federal Reserve raising interest rates, MakerDAO has begun to layout RWA. The protocol will redeem stablecoins such as USDC for US dollars and then purchase US Treasuries. Currently, RWA has become dominant in MakerDAO's assets, allowing the protocol to enable users to enjoy the yields from US Treasuries, while the protocol's revenue mainly comes from RWA.

This strategy has multiple benefits: on one hand, it avoids the risks of centralized stablecoins and increases the stability of the protocol; on the other hand, it allows on-chain users to have the opportunity to earn RWA yields, such as the significant increase in MakerDAO's DSR.

On September 1st, Rune proposed the idea of building a new chain based on Solana, which sparked a huge reaction. Rune subsequently stated that this proposal should not be viewed through a "tribalist" lens. Vitalik did not comment on this, but sold 500 MKR on the same day.

Summary

Rune, as an ambitious pragmatist, constantly drives innovation at MakerDAO. In contrast, Vitalik advocates for a certain form of "pure decentralization" and idealism. The differences in their philosophies are reflected in the development history of MakerDAO and have sparked many thoughts.