Original Author: Crypto Researcher Ann
Original Translation: Bai Ze Research Institute
The latest soap opera in the cryptocurrency industry is unfolding.
Yesterday, a piece of news flooded Crypto Twitter that Ethereum co-founder Vitalik is selling his MakerDAO token $MKR, which is the first time he has done so in two years.
My initial reaction was that Vitalik may not be enthusiastic about real world assets (RWA), which is a subfield of the cryptocurrency industry where MakerDAO and its stablecoin DAI are leading protocols.
However, what actually happened is something I could never have imagined in a million years, and many other members of the cryptocurrency community feel the same─which is why many people feel uneasy.
MakerDAO founder Rune proposed building a new Solana-based blockchain for the protocol.
Unless you are a "local" who regularly follows the cryptocurrency industry, you wouldn't know how significant this is.
Solana, the "Ethereum killer"
Maximalism (emphasizing more is more) is not something I'm proud of in the cryptocurrency industry─although I'm often fascinated by it. Each Layer 1/smart contract platform has its own die-hard fans who like to argue and debate over who is the strongest.
Sometimes it's just a healthy joke, people excitedly discussing whose technology is superior, the most decentralized, and so on. But most of the time, it devolves into a fierce "online brawl" with each group insulting the other.
During the last bull market, the L1 war became the focus of the cryptocurrency market. I think this was a period when ETH maximalists lost their sanity because the spotlight and liquidity of their beloved Ethereum were being usurped by the most favored L1s at the time.
However, among the various "Ethereum killers," Solana is the most well-known. For ETH maximalists, Solana is a nightmare. Why?
Firstly, it has the support of the cryptocurrency giant and great entrepreneur SBF (who is now in prison). Having just one SBF is not enough, Solana's fan base also includes Su Zhu of Three Arrows Capital.
Secondly, Solana is cool and powerful─it claims to process transactions at a volume 40,000 times greater than Ethereum.
The price of Solana's native token $SOL has soared from $3 in the early bull market to a historic high of $259.
Subsequently, the Solana community became arrogant and conceited.
But no one dislikes Solana more than Ethereum supporters.
MakerDAO's Shocking Proposal
In the MakerDAO governance forum, Rune suggested rebuilding the MakerDAO protocol by using the Solana codebase to create a new blockchain.
MakerDAO is the OG of Ethereum DeFi, and they are the bluest of blue-chip stocks. Maker has been an integral part of the Ethereum community since the early days (2014). In 2017, they launched the stablecoin DAI, which quickly grew to become the largest algorithmic stablecoin in the crypto market and a substitute for centralized stablecoins like USDC and USDT.
In short, Maker, as the OG of Ethereum, is so deeply rooted that Rune's proposal is shocking, feeling like the most severe "betrayal" event in Ethereum's history.
Among all the blockchains and smart contract platforms, why must Solana be chosen?!
This slap feels much louder than the time decentralized exchange dYdX moved from Ethereum to Cosmos as its main chain. At least dYdX chose Cosmos, a blockchain respected by Ethereum supporters (including Vitalik).
But Solana? The humiliation felt by Ethereum supporters would be worse.
Why Solana?
Rune believes it has the most efficient and high-performance technology stack. He also takes into account the vibrant developer community of Solana, which means he will never be short of talent to help him build using the Solana codebase.
Full proposal: https://forum.makerdao.com/t/explore-a-fork-of-the-solana-codebase-for-newchain/21822
Regarding his proposal, what's interesting is the subtle shadow he casts on Ethereum. MakerDAO has too much technical debt, and I wonder if he implies that the existence of debt is due to the platform (Ethereum) MakerDAO is built on also having a lot of technical debt.
To address these debts, he is considering starting over.
dYdX also agrees with the upgrade to a new chain instead of building on the old one. This comes down to one thing: Ethereum is difficult to scale and does not allow ambitious DApps to achieve their goals. (In the case of MakerDAO, their goal is a supply of 100 billion DAI.)
Rune brings another shadow to Ethereum: the rampant MEV extraction. The emergence of MEV is due to a lack of foresight in the early days of Ethereum. Who would have thought robots would massively exploit simple arbitrage trades to the point where most transactions are now carried out by these rent-seeking robots? MEV is Ethereum's perpetual technical debt.
In short, Rune wants to completely upgrade to a new chain, a new stablecoin, and a new governance token to achieve massive scalability. To start over and correct some past mistakes. He doesn't have many choices, it's either Solana or Cosmos, and he chose the former.
"The biggest difference between Cosmos and Solana is that Cosmos doesn't prioritize efficiency like Solana does, which means the cost of maintaining and achieving high performance will be higher. Cosmos also doesn't have a powerful centralized foundation organization like Solana, which could be both a good thing and a bad thing." - Rune
Reaction from the Ethereum Community
It seems that selling $MKR is not enough to "vent one's anger," as Vitalik briefly mentioned the possibility of MakerDAO heading in a strange direction on Discord.
To be honest, compared to the various "ngmi" (not gonna make it) comments made by frustrated Ethereum supporters on Twitter, Vitalik's reaction was quite elegant.
Rune's proposal is a big blow to Ethereum. MakerDAO is an OG protocol on Ethereum and has the second-largest liquidity in the entire DeFi space. This only exacerbates the seriousness of the survival crisis already happening on Ethereum. Not long ago, discussions were held on the security of rollups and the fact that they are neither secure nor decentralized in practice.
What if other OG protocols follow suit? It's not good for Ethereum and it's not good for the wallets of Ethereum supporters.
Conclusion
With this proposal, the multi-chain debate is once again making waves (after the L2 Summer narrative we just experienced). Choosing between Ethereum and other blockchains is a complex issue, and each decision requires some trade-offs.
If more protocols attempt to branch out from Ethereum, I personally think it's a good idea. (Just that Rune didn't choose Cosmos)
We like to think about what would happen if we were to move Ethereum's DApps to other chains. Would it work? Would it scale? Or would the catastrophic events that people often speculate about actually happen? We'll never find the answers unless someone is willing to take the risk and build on those chains. That's why I commend MakerDAO for being the latest trailblazer.
Translator's note:
The above projects and opinions should not be considered investment advice. DYOR (Do Your Own Research). According to the "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" issued by central banks and other departments, the content of this article is for informational purposes only and should not be used for promoting or endorsing any business or investment activities. Readers are advised to strictly comply with local laws and regulations and not engage in any illegal financial activities.
