Author: Haotian, Crypto Observer Source: X (original Twitter) @tmel0211
Originally, I thought the Newchain project of MakerDAO had been “extinguished” under a wave of public opinion, but unexpectedly, SLianGuairk Protocol, a lending protocol under MakerDAO, passed the proposal of Gnosis Chain a day ago, and it even called it the Kick-off of the multi-chain strategy. It seems that MakerDAO’s Endgame expansion and the “defection” road have officially begun?
What is GnosisChain? Officially, it is described as an independent public chain built on xDAI, but in fact, it is equivalent to EVM chains like BSC and Avalanche, which aim to be Ethereum killers. SLianGuairk Protocol chose to deeply integrate with an unknown competing chain of Ethereum during the crucial period when everyone was discussing MakerDAO’s escape from Ethereum, which shows their concern that Vitalik may once again crash the MKR market out of anger.
So, what motivations are behind the partnership between SLianGuairk Protocol and GnosisChain? Why is Ethereum layer2 not the best solution for MakerDAO? Why doesn’t MakerDAO implement a multi-chain strategy like AAVE? Next, I will try to provide a brief analysis for reference:
- How to use abstract thinking to interpret on-chain data for business purposes
- Turbo Introduction A Rollup Framework for the Autonomous World
- What alpha investment opportunities does the Ethereum Cancun upgrade hold?
Why choose Gnosis?
It is fair to say that it is Gnosis that succeeded in taking advantage of the grievances between MakerDAO and Ethereum, rather than MakerDAO choosing Gnosis. This is because according to DefiLlama data, the TVL of the entire Gnosis chain with 50 protocols is only $77 million, while the TVL of SLianGuairk Protocol alone on Ethereum is as high as $427 million. It seems a bit of a self-demeaning move for MakerDAO to choose Gnosis. Why does it have to be Gnosis? Simply put, Gnosis was originally named xDai Chain, aiming to use the number one algorithmic stablecoin DAI, compatible with and scalable on Ethereum, to attract Ethereum users, especially MakerDAO users.
It is not difficult to see that Gnosis is a chain (or a hitchhiker) born for MakerDAO. Now, the backup has finally become the main player because of its fast transaction speed, low fees, and good cross-chain interoperability. But is it really that simple? I believe that this is a signal flare released by MakerDAO to execute its Endgame plan: it does not want to be trapped within the framework of Ethereum. The inclusion of Gnosis in the strategic plan gives a sense of “when the immortals fight, the chickens and dogs rise”.
Why is Ethereum layer2 not the best solution?
In my previous article, I analyzed that Ethereum’s layer2 scalability is limited (you can refer to the highlights article on the homepage), constrained by the capacity of the mainnet rollup contract. As the father of DeFi, it is understandable that MakerDAO has a bit of arrogance and recklessness and wants to break through to achieve higher performance. However, lending and borrowing, which are part of the digital banking business, are low-frequency scenarios, and performance is not the core consideration. MakerDAO’s ambition is to have a secure and controllable chain that can have the decision-making power of a hard fork. To achieve this fundamental goal, it cannot rely too much on layer2.
In fact, if we look at AAVE’s layer2 development strategy, we can also find some reasons why MakerDAO dislikes layer2. AAVE has deployed 9 chains in total, and the majority of TVL is still on the layer1 main chain, with Arbitrum only having $145 million TVL, while compared to that, GMX has $422 million TVL. Although it is somewhat subjective to define that layer2 is not suitable for the development of lending protocols, considering the sidechain nature and the tendency to be more centralized, as well as the core position of lending in layer1 chains, it is not difficult to see that layer2 cannot support the grand vision of lending platforms.
And, to add another piece of news, after announcing a deep collaboration with Gnosis, MakerDAO quietly proposed a deployment to zkSync. MakerDAO has not made much movement within the two leading OP-Rollup factions, Arbitrum and Optimism. This may be interpreted as MakerDAO’s disregard for the security of OP-Rollup. If they choose layer2 and only choose the ZK-Rollup track of zero-knowledge proof, it is hard not to make such an association. I even see many people calling for MakerDAO to land on the Base chain in the Maker forum. Whether this will happen is uncertain, but given MakerDAO’s current security requirements, it is a bit difficult.
What is the endpoint of MakerDAO’s multi-chain strategy?
Based on current data, MakerDAO’s CDP has a TVL data of up to $4.68 billion, surpassing AAVE deployed on 9 chains. If we add SLianGuairk Protocol’s $427 million, MakerDAO is still the king of DeFi. AAVE’s TVL of $4.56 billion, non-Ethereum chains only account for $500 million. Obviously, the temptation of comprehensive multi-chain strategy is not great. MakerDAO’s multi-chain strategy is definitely not as simple as protocol coverage on various chains.
Because if MakerDAO simply wants to go multi-chain, Avalanche, Polygon, and other layer1 solutions are also good choices. By ignoring these well-known layer1 solutions and layer2 solutions, and choosing an unknown backup chain, isn’t the intention not very clear? It is precisely because of Gnosis’s affinity with MakerDAO that it can satisfy MakerDAO’s multi-chain expansion without sacrificing the strategic intent of “sovereignty” control.
Of course, it will be good news for Gnosis. No matter what, this is a hug from MakerDAO. Gnosis’s layout on RWA may also be a key attraction for MakerDAO. However, overall, Gnosis is just one piece on MakerDAO’s chessboard. I have roughly looked at Endgame and it actually plans for 5 stages. MakerDAO’s multi-chain, cross-chain, and even the launch of NewChain application chains all confirm one thing: MakerDAO does not want to be limited by any single chain. In the future, it wants to seamlessly integrate into various financial application scenarios and ultimately realize a highly autonomous financial service community composed of multiple SubDAOs.
Although born on Ethereum, developed on Ethereum, and shining on Ethereum, Vitalik and everyone hope that MakerDAO will always focus on Ethereum. However, the fact proves that while Ethereum is solid, MakerDAO is fluid. MakerDAO does not want to be limited by any framework.
Finally, let me share some little-known facts. MakerDAO’s official website app entrance has been changed to SLianGuairk Protocol, clearly redirecting users to SLianGuairk. If users want to participate in CDP lending, they have to find Oasis trade, which changed its name to Summerfi a month ago. Not only did it change its name inexplicably, but the entrance is also hidden deep, making it difficult for ordinary people to find.
Note: The above analysis and viewpoints are only my personal forward-looking analysis based on MakerDAO’s system research. Just like my usual positioning of technology + business, I will not deliberately present a bunch of terms like GSV and D3M in news releases. I only hope to use a different and accessible interpretation to let everyone see something different.
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