An Ambitious Vision — MakerDAO’s Endgame Plan
Learn about what Rune lays out in his endgame plan for MakerDAO
Something that slipped through the cracks over the past few weeks was MakerDAO’s founder, Rune, posting about what he dubs “The Endgame Plan” for MakerDAO. I found it a pretty interesting read because it acknowledges the problems with the current structure but also offers a glimpse into the future of what DAOs might look like. This post is just some key highlights I took away from it.
Here’s the blog post in case you want to read it: https://forum.makerdao.com/t/the-endgame-plan-parts-1-2/15456
#1 - Conglomerate Design
Starting out in the post, this was the key graphic that kind of informs what you’re going to read. Maker intends to be somewhat similar to Alphabet and then break the DAO up into further subDAOs that have complete autonomy to do what they want. I like the idea and am a big believer in the model however the way it’s laid out achieving truly cross-functional, autonomous teams is hard and requires a very large restructure. I have doubts about whether Maker will be able to pull this off.
#2 - Problems are clear
I’m glad that the founder himself has articulated things that I’ve been seeing first hand, but at the same time this is what makes me skeptical of whether this radical new change can actually be executed, given the hubris of the organisation in its current state.
The most alarming stat to me is $43m (cash alone) is being spent on 115 people. That averages to $280,000 USD per person. Once you factor in the MKR that figure becomes $400,000 (base). I cannot for the life of me understand how you can burn that much money on payroll with less than stellar growth.
Once again I’m glad that it’s being acknowledged, but it sounds like there are going to be a lot of people with vested interests against having this plan being executed since things are going to get torn up…
#3 - The MetaDAO
This is where the conglomerate vision comes in of Maker managing multiple pods. The intention makes sense but the role and responsibilities relative to the smaller units feels very hand-wavey with no clear sense of who actually will run the MetaDAO and how much power it has over the subDAOs. Autonomy is always the goal but they’ll still need to connect to the mothership and be connected to their other subDAOs.
#4 - MKR go up?
It sounds like the need to drive a stronger value accrual is outlined as an intention with the introduction of the “Singularity Engine” but it feels like this slide fell short when it comes to details. Maker has three core problems, none of which this post outlined:
Expenses are way too high. How do you cut spending to something that’s more reasonable?
Growth is stagnating. How exactly will splitting the DAO into subDAOs solve this problem? Will the Growth subDAO really be able to make engineering changes or will it need to politic with the Engineering subDAO?
No mention of how to intelligently distribute free cash flow to holders in a way that makes sense. Right now all excess cash is used to buy and burn MKR. That just tells me there’s no IRR Maker can rely on.
For the record, I think MakerDAO is probably one of my favourite all-time crypto projects and I have nothing but immense respect for the team and all the hard work they’ve done for the ecosystem!
That being said, the endgame plan felt too convoluted with no clear answers to the deeper problems that pertain to the problems outlined in the post. Rune says in the post that the way the subDAOs and metaDAOs will form will become a self-perpetuating system that brings Maker to its end state but I think that relies on many assumptions which haven’t been de-risked and require a significantly higher buy-in from more parties.
I’ll be watching carefully to see how the execution of this plays out since there are a lot of unknowns that I’d like to see answered before becoming bullish.
Nevertheless, Maker is leading the way for what the future of DAOs might look like…