MakerDAO's Departure from Ethereum: A Different Perspective

[DearMary]

MakerDAO's recent announcement about launching a new chain, referred to as their "Endgame," has ignited discussions within the crypto community. Many are perplexed by MakerDAO's decision to step away from Ethereum, and questions arise about the motivations behind this move. Why didn't MakerDAO opt for a Layer 2 solution within the Ethereum ecosystem? Why the inclination towards Solana? Could this shift indicate a trend where prominent protocols like Optimism and Uniswap, originally built on Ethereum, consider transitioning to independent application chains?

Without delving into the specifics, let's explore an alternative perspective:

The Ideal Growth Trajectory for Public Chains: Public blockchains, as fundamental infrastructure, ideally foster a thriving ecosystem of applications closely intertwined with the core blockchain. Any attempt to break away from this symbiotic relationship may seem counterintuitive. However, due to Ethereum's performance limitations, it appears that application "breakaways" are becoming inevitable. So, how can this transition be understood? Examining the historical evolution of blockchain infrastructure, we can identify three methods:

1. Layer 2 Modular "Escape": This approach relies on Ethereum's mainnet as a secure consensus layer and leverages its data availability for scalability. It's essentially an "escape," but Layer 2 remains linked to the mainnet, creating a mutually beneficial alliance. As the Layer 2 ecosystem grows, with ETH as the gas token in various scenarios, Ethereum's position becomes more robust.
However, it's vital to recognize that Layer 2 scaling has limitations. Rollup solutions are constrained by Ethereum's mainnet contract, and no matter how much Layer 2 scales, it's bound by the Ethereum Virtual Machine's (EVM) resource limits. Ethereum's gas limit, for instance, is currently around 30,000,000, with a single block accommodating roughly 1,000 transactions. Therefore, while Layer 2 scaling is widely accepted as an "escape" strategy, it's not without limitations.
For MakerDAO, a DeFi infrastructure with relatively infrequent transactions, Layer 2 scaling could address scalability concerns. However, MakerDAO's interest in creating a NewChain stems from the fact that the Rollup solution doesn't allow for a hard fork, meaning they can't regain control over their assets if Layer 2 experiences a significant security breach. For MakerDAO, retaining absolute control and security is the core motivation behind their NewChain initiative.

2. Off-Chain + On-Chain Exclusive Transaction Routing "Exit": Consider Uniswap as an example. Currently, nearly 60% of Ethereum transactions are linked to Uniswap. However, Uniswap grapples with challenges stemming from the underlying "miners charging gas fees based on bids" system. This mining system incentivizes miners but also fosters the presence of MEV arbitrage bots, causing fluctuating gas fees and affecting user experiences.
Uniswap is working on solutions like Wallet, UniswapX for off-chain preprocessing, and on-chain integration. This can be seen as another form of "exit." In the future, if 60% of Ethereum transactions must pass through Uniswap's off-chain preprocessing before going on-chain, this decentralized preprocessing environment essentially becomes a Uniswap Chain. For Uniswap, defining rules (fee-less transactions, Dutch auction mechanisms for pools, anti-MEV measures), and constructing a new ecosystem become natural steps. However, even if Uniswap ventures into chain development, it's likely to maintain a deep connection with Ethereum.

3. Building a Completely New Consensus Public Chain "Exit":Some projects have ventured into creating Layer 1 public chains. However, many have realized that Ethereum's performance bottlenecks and established ecosystem make it more practical to stay within Ethereum's orbit. Projects like Polygon 2.0, opBNB, and others are returning to Ethereum by aiming for EVM compatibility and integrating with Layer 2 solutions. Creating an independent consensus public chain is the most comprehensive form of "escape," but Ethereum's performance limits and ecosystem foundation pose a dilemma. Currently, aligning with Ethereum's ecosystem seems like a more prudent choice.

In conclusion, the crypto market is a complex landscape where projects make strategic decisions based on their unique needs and objectives. While many opt for Layer 2 scaling to address scalability issues within Ethereum's constraints, others, like MakerDAO, choose to build their own chains to ensure absolute control and security. Each project's path is influenced by its distinctive circumstances, and the dynamics between Ethereum and its ecosystem will continue to evolve as the blockchain space matures.