Although
MakerDAO’s
dai
(DAI)
might
be
the
most
successful
decentralized
stablecoin,
last
year
founder
Rune
Christensen
worried
the
project
was
teetering
on
the
edge
of
collapse.
So
he
set
about
coming
up
with
a
rescue
plan.
Christensen’s
proposal,
now
known
as
Endgame,
is
a
massive
expansion
of
the
Maker
project,
which
would
see
the
release
of
new
stablecoins,
new
ways
to
generate
revenue
and
potentially
limitless
new
business
prospects
through
the
creation
of
“subDAOs.”
CoinDesk
sat
down
with
Christensen
for
a
wide-ranging
interview
to
get
a
better
sense
of
what’s
coming
down
the
pike
as
Endgame
begins
to
roll
out
as
early
as
this
summer.
We
connected
on
May
17,
the
day
Maker
announced
the
coming
release
of
two
fully
decentralized
stablecoins,
NewStable
and
PureDAI,
which
will
eventually
replace
DAI,
which
has
a
market
cap
of
over
$5
billion.
So
it’s
a
big
news
day
for
you
guys.
You
could
say
that.
Would
you
say
the
idea
of
launching
a
more
decentralized
stablecoin
is
a
tacit
acknowledgment
that
dai
(DAI)
should
have
always
pursued
decentralization
first
and
foremost?
I
mean,
there’s
mainly
two
approaches
to
decentralization
in
DeFi.
One
uses
decentralization
as
a
tool
and
the
other
is
using
it
as
sort
of
the
guiding
–
I
wouldn’t
call
it
an
ideology,
but
this
underlying
measure
or
the
end
goal
itself.
What
this
announcement
touches
on
is
how
these
two
things
interact
when
using
decentralization
as
a
tool.
If
you’re
thinking
about
someone
building
a
product
that’s
useful
for
end
users,
then
making
it
decentralized
should
be
done
for
a
specific
reason
like
resilience
and
the
ability
to
offer
features.
Whereas
when
decentralization
is
your
guiding
ideology,
then
the
product
itself
is
pure
decentralization.
It’s
two
very
different
user
bases
and
demographics,
right?
Our
second
user
base
is
the
OG
Bitcoin
and
Ethereum
types
that
value
purity.
But
the
vast
majority
of
people,
especially
the
more
mature
crypto
gets,
are
more
interested
in
useful
products.
We
especially
see
this
with
stablecoins.
With
the
stablecoin
trilemma
it’s
very
hard
to
scale.
If
you
have
a
$1
peg,
you
have
to
use
real
assets,
which
will
always
limit
decentralization.
What
are
MakerDAO’s
core
values?
When
Maker
started
it
was
during
a
time
when
all
these
early
experiments
and
random
ideas,
which
were
mostly
pointless
[were
floating
around].
We
wanted
to
try
to
build
something
useful
to
people
with
this
technology.
We’re
really
lucky
that
we
had
that
perspective
because
it
brought
us
to
build
a
stablecoin,
which,
at
the
time,
was
kind
of
a
boring
idea
that
nobody
wanted
to
do.
All
that
other
stuff
was
cool,
but
you
couldn’t
use
it
unless
there’s
something
stable.
It
turns
out
that
a
stablecoin
is
actually
the
most
powerful
business
model;
it’s
basically
been
the
product
that
has
taken
off
and
come
out
of
blockchain
technology
that
has
actually
impacted
people.
Big
time,
right?
Ultimately,
the
reason
why
we’re
in
the
game
now,
the
reason
why
we
are
basically
making
a
lot
of
major
changes
is
we’re
basically
trying
to
rethink
from
first
principles.
How
to
really
build
something
useful
that’s
going
to
benefit
people
that
also
benefits
from
all
the
things
you
can
do
with
decentralization.
Do
you
feel
like
you
have
a
good
sense
of
where
Endgame
will
end
up?
So
the
real
basic
concept
of
Endgame
is
really
growth
and
resilience
–
that’s
the
overall
goal.
It
has
to
be
something
that
can
grow
exponentially,
and
as
it
grows
it
gets
more
and
more
resilient.
The
core
idea
of
Endgame
is
to
reach
an
end
state
of
the
system,
so
it
doesn’t
have
to
change
anymore
to
the
extent
that’s
possible.
That
kind
of
taps
into
the
original
Bitcoin
values,
this
principle
that
decentralization
is
good,
resilience
is
good,
reliability
is
good.
But
to
give
people
what
they
want,
you
have
to
be
able
to
adapt
to
the
market.
So
that’s
where
subDAOs
come
into
the
picture;
you
enable
the
core
of
the
system
to
reach
this
end
state
and
become
immutable.
…
That
then
allows
for
subDAOs
to
take
care
of
all
the
complexity,
adaptation
and
innovation
that
can
attract
new
users.
That’s
basically
where
the
whole
journey
begins.
We
have
to
see
what
actually
works
in
practice
before
we
commit
to
something
and
follow
market
cues.
It’s
hard
to
predict
everything
in
advance
and
then
just
build
it
exactly
the
way
it
was
predicted.
Usually
that
would
not
result
in
something
that
is
actually
very
useful
to
people.
It’s
better
to
sort
of
figure
out
what
people
actually
want
and
then
move
in
that
direction
with
it.
What
do
you
make
of
the
trend
of
DeFi
brands,
like
Aave,
for
instance,
expanding
beyond
their
core
category?
I
mean,
it’s
the
same
sort
of
thing
that
is
pushing
us
towards
Endgame
at
Maker.
So
actually
I
think
Aave’s
attempt
at
decentralizing
social
media
is
a
bit
of
an
outlier.
I
think
the
more
classic
way
this
is
happening
is
– Frax
was
the
first
project
to
articulate
this,
when
they
were
talking
about
how
every
project
ends
up
sort
of
doing
all
the
code
bases
models,
right?
So
if
you’re
DeFi,
probably
you’ll
also
be
doing
lending,
you’ll
be
doing
stablecoin,
you’ll
be
doing
exchange.
Maker
also
is
doing
a
DEX,
lending
and
stablecoins.
The
reason
why
this
is
happening
is
because
the
real
challenge
all
of
this
is
not
really
building
the
actual
products,
it’s
having
the
governance
layer
in
a
DAO
to
maintain
it
all.
So
that’s
where
all
the
complexity
and
investment
goes:
having
the
ability
to
make
the
decisions
that
maintain
something
like
that.
If
you
already
have
that
capability
for
doing
it
with
a
stablecoin,
then
you’ve
already
paid
the
majority
of
the
cost
and
it’s
very
easy
to
add
more
features
using
the
same
governance
rails.
And
in
fact,
you
kind
of
have
to
do
that
because
it’s
so
expensive
and
difficult
to
maintain
the
governance.
With
Endgame,
we’re
taking
this
to
the
absolute
extreme,
because
we’re
building
this
extremely
advanced,
extremely
sophisticated
governance
layer
that
we
will
be
reusing
again
and
again
and
again
with
subDAOs.
That’s
the
economies
of
scale
–
experience
and
data
is
gained
from
all
the
different
subDAOs.
Do
you
ever
feel
that
MakerDAO
governance
is
over-engineered?
I
believe
the
problem
is
that
it’s
undere-ngineered.
The
problem
is
the
reason
why
you
can
simplify
governance.
I
mean,
that’s
what
we
did
originally,
right?
We
built
the
technical
layer,
we
built
the
protocol,
and
put
a
simple
voting
system
on
it
and
released
it
assuming
that
the
free
market
would
take
care
of
it
because
the
community
will
vote
in
their
own
best
interests.
But
unfortunately,
what
actually
happens
in
DAOs
is
politics.
So
the
problem
is
the
assumption
in
any
group
setting
–
in
any
political
setting,
you
could
say
–
is
that
when
somebody
makes
a
proposal
or
makes
an
adjustment
to
a
public
system
they’re
doing
that
to
benefit
the
system,
right?
That’s
the
game
theory.
…
But
the
real
game
theory
is
that
people
will
do
whatever
is
best
for
them.
Everybody
wants
to
vote
to
give
themselves
money.
If
you
just
have
enough
honest
people,
they
can
see
that
happening
and
then
shut
it
down.
The
problem
is
you
get
this
additional
layer
of
politics
where
what
happens
is
people
will
kind
of
argue
over
some
proposal
that’s
supposed
to
be
in
the
best
interest
of
the
whole
system.
They’ll
say
“it’s
so
great
and
I’m
so
selfless
proposing
this,”
but
there
will
be
an
underlying
motivation.
It’s
incredibly
difficult
to
tell
when
it
is
genuine.
Humans
are
just
like
that,
right?
They
will
be
obfuscated
and
they
will
collaborate
and
you’ll
have
groups
with
shared
interests.
The
point
of
all
this
is
it
is
very,
very
complex
–
you
can’t
“solve”
human
politics.
The
only
real
answer
to
this
is
basically
to
put
in
place
some
hierarchy,
a
leader
that
you
have
faith
in
to
decide
who’s
being
honest.
The
only
alternative
to
that
is
to
try
to
build
out
a
transparent
framework
that
contains
all
of
that
knowledge,
like
all
the
knowledge
that
a
CEO
typically
has
in
a
company.
You
want
to
have
as
much
public
data
and
knowledge
as
possible
so
when
you
pay
for
a
particular
engineering
task,
you
know
if
you
were
overpaying
and
how
to
quality-check
it.
You
can’t
leave
all
those
decisions
up
to
voters
because
they’ll
vote
for,
like,
their
own
supplier
that
gets
paid
10x
market
price.
But
you
can’t
figure
out
if
that’s
happening
unless
you
actually
have
the
data
and
these
processes
built.
In
a
sense,
it’s
an
extremely
challenging
engineering
effort
where
you
have
to
build
all
these
processes
to
be
detail-oriented,
because
every
single
black
box
you
leave
anywhere
in
the
governance
system
is
like
leaving
a
bug
in
a
smart
contract
that
a
hacker
can
come
and
hack.
That’s
the
direction
we’re
slowly
going
in
at
Maker
by
building
Atlas,
which
is
sort
of
a
big
governance
layer.
Do
you
think
you
would
make
a
good
politician?
No.
I
mean,
like,
I
definitely
have
had
to
develop
those
types
of
skills
to
basically
deal
with
the
problem
of
doing
stuff
with
DAOs.
But
I’m
definitely
not
naturally
–
I’m,
well,
I’m
not
exactly
a
technical
person
in
the
sense
that
I’m
not
doing
any
of
the
code
in
Maker,
but
I’m
definitely
more
technically
minded.
What
do
they
call
it?
A
shape
rotator
rather
than
a
wordcel.
That’s
funny.
You
can
feel
free
to
decline
to
answer,
but
do
you
have
any
sense
of
why
those
VCs
collaborated
to
vote
against
Endgame?
Well,
it
was
not
all
the
VCs.
I
think
there
were
three
prominent
ones.
I
think
at
that
point,
like
everyone
else,
they
were
very
disappointed
with
what
had
happened
with
the
project
because
it
had
sort
of
taken
off
–
it
had
grown
a
lot
and
then
suddenly
it
lost
all
its
revenue
and
had
crazy
expenses.
And
then
I
think
from
their
perspective,
they
probably
just
viewed
Endgame
as
some
kind
of
desperate
sort
of
fever
dream,
right?
Like,
it’s
already
bad
and
now
it’s
gonna
fail
fully
and
their
tokens
are
going
to
become
worthless.
And
then
they
actually
sold
all
their
MKR
when
they
failed
to
vote
against
it.
Unfortunately
for
them,
they
sold
right
at
the
bottom.
Then
what
happened
was
you
had
this
new
generation
of
hedge
funds
and
VCs
coming
in
and
buying
up
all
their
MKR.
These
were
institutions
that
were
explicitly
very,
very
excited
about
Endgame,
they
bought
because
they
actually
thought
this
was
a
cool
idea.
And
I
think
that’s
what
you
want
–
the
MKR
did
its
job
because
you
actually
want
voters
to
be
aligned.
When
exactly
did
you
start
thinking
that
you
had
to
do
Endgame?
It
really
all
came
from
the
problem
of
the
politics
I
just
talked
about,
right?
The
budgets.
I
saw
what
was
happening,
and
then
I
started
extrapolating
and
I
realized
it
would
get
so
much
worse
–
like,
the
project
would
die.
That’s
where
the
idea
of
subDAOs
came
from,
a
way
of
starting
from
fresh
so
you
can
set
the
right
direction,
the
right
momentum,
with
the
right
knowledge.
You
can’t
just
put
people
in
a
DAO,
and
then
have
the
free
market
steer
things.
You
have
to
really
give
them
the
data,
give
them
the
frameworks,
give
them
the
tools
to
move
in
the
right
direction
where
there’s
interaction.
And
even
when
you
do
that,
it
will
still
fail
sometimes.
That’s
the
other
thing,
it’s
a
fresh
start
for
communities
that
are
specialized
in
particular
areas
so
they
can
become
more
streamlined.
Spark
will
be
a
subDAO
focused
on
DeFi
innovation.
And
then
there
are
other
subDAOs
that
can
be
about
gaming
or
financial
inclusion
by
serving
as
a
way
to
get
yield
for
potential
users,
for
instance,
which
is
a
huge
crypto
demographic
that
hasn’t
really
seen
an
advanced
crypto
product.
You
get
to
make
these
bets
on
new
communities
that
have
a
particular
direction
led
by
a
group
of
people
that
believe
in
that
direction.
The
other
major
thing
is
they’re
allowed
to
fail.
It’s
designed
so
that
if
a
subDAO
fails,
it
doesn’t
damage
the
whole
thing,
which
is
kind
of
a
problem
with
Maker.
See
also:
Rune
Radio
The
last
part
is
solving
how
to
make
growth
really
take
off,
because
DAI
was
really
only
adopted
by
crypto
natives.
The
branding
was
sort
of
quite
random.
So
with
Endgame,
we’re
rebranding
to
try
to
fix
that.
The
ace
up
our
sleeve
that
we
have
is
decentralization.
SubDAOs
will
function
as
an
adoption
funnel
through
tokens
that
offer
yield
to
holders
of
the
new
stablecoin
with
new
and
better
branding.
It’s
exactly
the
same
asset
–
the
only
question
is
how
are
you
getting
the
yield
for
the
DAI
savings
rate?
It’s
a
bit
like
DeFi
Summer,
where
yield
farming
was
essentially
risk
free.
So
it’s
a
way
to
sort
of
get
the
growth,
excitement,
experience,
and
maintain
its
resilience
as
it
grows
so
people
are
not
losing
the
money.
So
you
can
really
kind
of
just
push
it
and
adopt
it.
How
do
you
deal
with
the
stress
of
leading
one
of
the
most
important
DeFi
projects?
It’s
really
hard
for
me
to
explain
how
I
dealt
with
it
in
the
past
because
it
was
really
crazy.
The
early
days
of
crypto
were
so
insane
–
unreal
situations,
crazy
drama,
crazy
personalities,
a
lot
of
toxicity.
The
main
way
I
dealt
with
it
is
that
the
more
I
tried
to
improve
what
we
were
trying
to
build
–
making
something
useful
for
people
–
the
better
things
got.
Gradually,
things
have
just
been
getting
better
and
better.
Even
dealing
with
Endgame
–
this
massive
change
–
is
nothing
compared
to
the
early
days
of
Maker.
Are
you
still
thinking
about
making
an
MMORPG?
I
actually
have
a
gaming
company
that’s
building
an
MMORPG
that
I
founded
around
the
time
the
Maker
Foundation
wound
down.
Being
in
Europe,
are
you
at
all
concerned
about
the
Tornado
Cash
verdict?
I
ask
because
the
judge
essentially
said
founders
could
be
criminally
liable
for
code
they
release
that
they
suspect
could
be
misused.
I
think
the
problem
with
privacy
technology
is
that
it
attracts
a
lot
of
bad
guys
and
illicit
use.
There’s
naturally
a
large
illicit
user
base.
But
there
are
also
way
more
legitimate
users.
It’s
like
a
road,
bad
people
use
the
roads,
but
the
vast
majority
are
regular
people.
It’s
a
big
challenge,
because
we
need
privacy
technology,
right?
We
have
a
right
to
privacy,
but
these
tools
often
end
up
as
honeypots
in
a
sense.
But
obviously
Maker
has
always
focused
on
having
good
relationships
with
regulators
because
we
want
adoption
by
regular
people.
And
we’ve
achieved
that.
A
lot
of
people
use
and
benefit
from
the
system,
which
makes
it
dramatically
different
from
something
like
Tornado
Cash.
Today’s
announcement
of
a
completely
decentralized
stablecoin
detached
from
Maker
wouldn’t
have
KYC
though,
by
definition.
It
seems
like
prosecutors,
when
they
can’t
shut
something
down,
try
to
put
a
person
behind
the
code.
Yeah,
but
again
it
comes
back
to
whether
it
has
some
kind
of
legitimate
use.
The
point
is
if
you’re
making
it
easy
to
do
bad
things
with
this
technology.
There
is
no
privacy
on
the
blockchain,
right?
Everything
is
totally
transparent.
You
have
Chainalysis
monitoring
everything.
Mixers
thwart
that.
The
best
example
of
all
is
the
banking
system,
because
this
is
happening
all
the
time
at
a
much
greater
scale.
You
can
be
fully
anonymous
in
crypto
if
you’re
just
smart
enough.
But
in
the
banking
system,
it’s
actually
pretty
easy
because
you
just
need
to
bribe
a
few
corrupt
bankers
or
something
like
that.
It’s
pretty
straightforward.
So
the
thing
that
would
get
risky
for
us,
even
though
I
think,
again,
that
there
is
a
moral
obligation
to
figure
out
how
to
do
this
in
a
way
that
doesn’t
just
disproportionately
benefit
criminals,
is
to
build
a
privacy
solution
into
a
decentralized
currency.
It’s
very
hard
to
do
that
safely
and
without
becoming
a
target.
We’re
definitely
not
going
to
build
you
know,
native
privacy
into
pure
DAI
or
anything
like
that.
Do
you
want
to
do
a
quick
round
of
Overrated/Underrated?
Underrated.
Life
extension
research?
Overrated.
Ai
risk
research?
Overrated.
AI
itself?
Underrated.
Overrated.
Blockchain
gaming?
Overrated.
Could
you
say
why?
I
think
it
has
a
ton
of
potential,
but
I’m
really
disappointed
in
basically
almost
everything.
The
amount
of
attempts
and
quality
of
the
attempts
is
just
very
disappointing.
There’s
something
wrong
with
the
culture
–
like,
everyone’s
just
doing
it
for
the
money.
And
it’s
pushing
away
real
builders
who
are
never
going
to
touch
the
blockchain
gaming
industry.
If
you
had
the
right
people
trying
to
do
it,
you
could
build
some
really
cool
things
and
we’ll
get
there.
But
the
signal-to-noise
ratio
is
crazy.
How
much
MKR
do
you
own
or
control?
You
can
log
onto
Etherscan
and
find
my
wallet.
It’s
pretty
easy.
Is
there
anything
that
you
want
to
talk
about?
I
mean,
the
only
thing
that’s
important
to
me
right
now
is
just
how
impactful
launch
season
will
be.
There
are
many
new
things
coming
and
it
can
be
quite
difficult
to
explain
–
there’ll
be
a
new
brand,
new
token,
new
app.
There’ll
be
these
different
options
if
you’re
a
DAI
holder
that
you
can
choose.
It’s
really,
really
powerful
stuff.
We
spent
two
years
just
distilling
all
the
things
that
have
been
learned
basically
since
the
beginning
of
DeFi.
And
then
we
are
sort
of
launching
all
the
key
aspects
of
those,
but
trying
to
make
it
simple
and
easy
to
use.
The
killer
feature
is
yield
farming,
which
I
think
will
be
relevant
for
a
lot
of
people.
But
it’s
hard
to
explain
in
advance
that
you
will
be
able
to
save
money
with
low
risk,
like
you’re
used
to
with
stablecoins,
but
now
you
can
get
these
very
interesting
and
valuable
tokens
as
you
do
it.
Yield
farming
is
sometimes
described
as
a
marketing
expense.
Would
you
agree
with
that?
Yeah,
I
think
that
was
kind
of
the
old
version
of
yield
farming
that
others
have
done.
But
nowadays
we
have
designed
a
system
where
the
yield
side
actually
makes
the
protocol
sustainable.
What
was
risky
before,
even
if
you
were
doing
it
with
stablecoins,
is
that
you
were
doing
it
in
untested,
brand-new
smart
contracts.
So
there’s
gonna
be
a
lot
of
technical
risk.
In
our
case,
there
is
no
technical
risk
–
or
very
low
technical
risk
–
because
it’s
just
as
safe
as
all
the
other
components
of
the
Maker
system.
There’s
financial
risk,
but
with
the
new
subDAOs
and
tokens
there
will
be
a
lot
of
incentives.
In
10
years
where
do
you
think
Tether
will
be?
I
think
it
would
probably
be
even
bigger
than
it
is
today.
They
are
reaching
escape
velocity
and
they’re
not
even
paying
any
yield.
They’re
just
growing
and
growing
and
growing
because
it’s
so
useful.
The
number
one
thing
that
makes
a
stablecoin
useful
is
the
network
effect,
right?
People
use
tether
because
everyone
else
uses
it,
so
they
already
have
that
flywheel.
We
definitely
hope
to
get
to
that
point
as
well.
But
fundamentally
the
bed
we’re
making
with
Endgame
is
we
can’t
guarantee
we
get
to
that
point
at
least
within
some
timeframe
we
can
control.
So
we
are
really
focusing
on
the
yield
aspect
so
we
have
a
growth
driver
that
is
independent
from
requiring
this
huge
network
effect.
But
then
we
may
be
able
to
use
this
yield
growth
driver
to
build
up
a
huge
network
of
users
and
start
to
get
this
sort
of
compounding
effect.
It
could
be
very
successful
and
profitable,
even
if
it
was
never
used
as
a
currency
at
all.
Maybe
it’s
just
like
a
savings
account
to
tether
or
something
like
that.
This
was
great,
good
luck.
I
appreciate
the
candid
responses.
