By George Ward
Ethereum co-founder Vitalik Buterin has raised concerns over MakerDAO’s decision to migrate its backend to a new chain (Solana). Accordingly, Buterin has moved to sell his Maker (MKR) holdings, stating that Maker’s plan is “weird.”
His decision has sparked conversations within the crypto community, who are curious about the implications of his move. Meanwhile, MakerDAO CEO Rune Christensen has unveiled his “Endgame” vision for Maker.
He shared his insights in a MakerDAO forum post on September 1. Part of the plan involves relocating the backend of the Maker Protocol to a fresh blockchain known as NewChain.
What caught the attention of the crypto world was the proposal to use the Solana stack as the new codebase, signaling a significant departure from Maker’s Ethereum origins. However, Buterin expressed his disagreement with Christensen’s strategy.
After the forum post, Buterin exchanged 500 MKR for 353 ETH, valued at around $580,000, 24 hours after the post. Moreover, a recent Discord message shared by Wu Blockchain revealed that Buterin endorsed Maker’s RAI over DAI due to its reduced governance complexity in the context of Christensen’s plans.
MakerDAO’s NewChain Move
Buterin’s reservations about the Maker protocol prompted analysts to examine why Maker intends to shift its backend to a different chain and why Solana is their favorite choice. Christensen explained that the move to NewChain is to enhance the resilience of the Maker protocol against governance attacks and technical failures through hard forks.
Additionally, this transition aims to provide developers greater flexibility to optimize Maker components for their intended purposes. Maker plans to duplicate an already established Layer 1 blockchain to avoid the challenges of creating a blockchain from the ground up.
Christensen has highlighted the Solana stack as the most favorable codebase for this endeavor. He cites three key reasons for this choice: Solana’s technical excellence and optimization, the network’s robustness following the FTX collapse, and the success of Solana forks like the Pyth Network.
While Christensen acknowledges Cosmos as a strong contender due to its extensive talent pool and numerous app chains, he argues that Solana’s competitive edge lies in its efficiency. He asserts that the Cosmos chain requires a higher level of capital for maintenance.
It’s important to note that Christensen’s plan is currently in the proposal stage, and he estimates that the project may take at least three years to complete. Notably, Maker’s frontend will continue to operate on Ethereum and Ethereum Layer 2 chains, connected to the new backend via a bridge.
Despite Buterin’s skepticism, the price of MKR has not experienced any significant decline. At the time of writing, MKR is trading at approximately $1,122, up 0.9% in the past 24 hours, according to current Coingecko data.
Implications For DeFi And Ethereum Ecosystem
Given its substantial influence within the DeFi ecosystem, any moves made by MakerDAO could affect the broader Ethereum blockchain. While Rune Christensen’s vision aims to enhance Maker’s resilience and development flexibility, it remains a proposal with a long-term timeline.
Hence, it raises questions about the future of DeFi protocols, especially the shift of significant projects from Ethereum to other blockchains and the dynamics of governance and decision-making within the crypto space. Meanwhile, Ethereum co-founder Vitalik Buterin has highlighted a critical challenge affecting the Ethereum network – node centralization.
Buterin shared his views during his address at the recent Korea Blockchain Week. Most Ethereum nodes are currently on centralized web services, such as Amazon.
The primary concern regarding this centralized reliance is that a single point of failure could undermine Ethereum’s foundational principle of decentralization. Buterin emphasized that node centralization is the first among the six formidable issues affecting Ethereum.
However, he pointed out that achieving statelessness is pivotal in mitigating this challenge. Buterin explained that stateless clients enable users to operate a node without the burden of handling colossal amounts of data, making it feasible even on mobile devices.
However, he acknowledged that fully surmounting this obstacle might be a tasking journey stretching over a decade or two. In addition to addressing the node centralization predicament, Buterin discusses other vital factors pivotal to fortifying Ethereum’s decentralization.
They include reducing barriers to distributed staking, enhancing documentation, and fortifying the security framework surrounding staking.