MakerDAO Considers Integrating Ethena's Stablecoin as Collateral for DAI

MakerDAO has recently updated its "Endgame" roadmap, with a notable highlight being the potential integration of Ethena's stablecoin USDe as collateral for DAI.

The Endgame Plan

Rune Christensen, the founder of MakerDAO, recently shared updates on Twitter regarding the Endgame plan aimed at achieving the ambitious "100 billion USD market cap" vision for the DAI stablecoin.

The phases of the plan include:

1. Phase 1 (Launch): Deploying basic information and infrastructure for SubDAOs.
2. Phase 2 (Scale): Operating SubDAOs with their own governance models, focusing on specific niches.
3. Phase 3 (NewChain): Establishing a dedicated chain for Maker governance.
4. Phase 4 (Final Endgame): Bringing Maker's governance and operations into an "Immutable" state - unchangeable and permanent.

This is a more detailed version of the plan compared to the outline shared in May 2023. However, the most notable update in this proposal comes from the Spark Protocol team, a lending protocol developed by Maker that will operate as a SubDAO under Maker. They are considering the integration of sUSDe, a stablecoin from the recently popular Ethena project, to maintain high DSR (Dai Savings Rate) interest rates for DAI.

Community Concerns

Despite the potential benefits, this idea has sparked concerns within the DeFi community regarding the risks involved, especially concerning the collateralization model at centralized exchanges (CEX). Addressing these concerns, Rune Christensen mentioned that the team is assessing the risks associated with asset liquidation in the event of a CEX bankruptcy. One proposed solution to mitigate these risks is to enhance the collateralization level for the stablecoin.

Strategic Move

This move is part of MakerDAO's efforts to remain competitive in the yield race among stablecoins. On March 10, Maker officially raised the DSR interest rate to 15% to prevent the risk of DAI's peg deviating from its target.

MakerDAO's strategic consideration of Ethena's stablecoin as collateral for DAI reflects its ongoing commitment to innovation and adaptation in the rapidly evolving DeFi landscape. The decision will be closely watched by the community as it unfolds, with the potential to significantly impact the stability and growth of DAI.