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MakerDao uses Solana codebase for NewChain

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On September 1, Rune Christensen, co-founder of MakerDAO, proposed using the Solana codebase to develop a NewChain blockchain. MakerDAO currently operates on Ethereum. However, the developers want to make a more rapid and efficient blockchain, and later move a part of the project to it. 

This is one of the five steps in an ambitious development plan called "Endgame". Let's take a closer look at the announcement.

MakerDAO brief overview

MakerDAO is an Ethereum-based protocol behind the DAI algorithmic stablecoin. Unlike USDT or USDC-type stablecoins that are backed by real money or securities, DAI is issued against the collateral of other cryptocurrencies. Read more about such stablecoins here.

A protocol is a set of rules or standards that define how specific operations or processes should occur on the blockchain. 

MakerDAO also has its own Maker token, MKR, which is needed to participate in its governance.

What is new for MakerDAO with Solana

On May 11, Rune Christensen posted a big "Endgame" plan on the forum. This plan is aimed at increasing the protocol’s sustainability and changing its governance structure. Additionally, one of the goals is “to grow the Dai supply to more than 100 billion within 3 years”. According to CoinMarketCap, DAI's current supply stands at $5.3 billion. 

The fifth phase of this plan involves launching a dedicated blockchain called NewChain to run the protocol. While the protocol token and DAI will work on Ethereum and other networks, they "will be connected to NewChain through advanced bridges kept secure by the Maker Protocol (called Two-Stage Gravity Bridges)".

In order not to build a blockchain architecture from scratch, Rune Christensen suggested taking the Solana codebase and building a solution around it due to the following reasons:

1. The technical quality of the Solana codebase meets all NewChain's needs.
"The Solana codebase is engineered well and benefits from being designed long after the bottlenecks and challenges of blockchains were already well understood".

2. The Solana community and developers have weathered the collapse of the FTX exchange, which had a large influence within the ecosystem.
"Despite all of the issues and hardships, the project still has a thriving developer community".

3. There are successful project examples on Solana forks.
"Most notable is the Pyth project which runs its own adapted version of Solana to act as its backend".

Cosmos was considered as an alternative, but Rune Christensen emphasised that decentralisation is the priority in this ecosystem, as opposed to the speed and efficiency that NewChain needs and Solana has.

Reaction from the creators of Solana and Ethereum

Anatoly Yakovenko, Solana’s co-founder, called MakerDAO's decision a victory for open-source code in general and encouraged the community to avoid conflicts about it.

Ethereum’s founder, Vitalik Buterin, did not comment on the news separately. However, on September 2, he sold 500 MKR tokens for $581,000.

You might also like:

What are stablecoins

What is Ethereum


Maria Kachura
Maria Kachura

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