The history of MakerDAO’s DAI stablecoin and the Endgame Plan

The single-token era and scaling hurdles

MakerDAO launched in 2017 with MKR holders managing the DAI stablecoin. These holders voted on stability fees and collateral types using on-chain mechanisms. Governance participation typically stayed between 5% and 15% of the circulating supply. This concentration in a few wallets raised questions about decentralization. The system failed during the March 2020 Black Thursday crisis because the liquidation system did not work. This crash left \$6.65 million in undercollateralized positions when the Ethereum price dropped 45% in 24 hours. The transition from single-collateral DAI to multi-collateral DAI required managing dozens of monthly parameter adjustments and evaluating new collateral proposals that demanded specialized risk analysis from the original governance participants. The protocol expanded to include real-world assets like US Treasury bonds through arrangements with BlockTower and Monetalis. In the delegate era, MKR holders transferred voting power to professionals to improve decision quality. This model introduced principal-agent risks where delegates could vote against the interests of their delegators. To maintain DAI stability, the protocol mints new MKR to cover obligations if collateral value becomes insufficient during price downswings. When auctions exceed the necessary limit, the protocol uses the excess to buy back and burn MKR. The circulating supply of MKR stood at about 1 million in October 2020.

Implementation of the Endgame Plan

Rune Christensen proposed the Endgame Plan in 2022 to address the scaling issues of the original model. This plan restructured MakerDAO into a Star System of SubDAOs. These SubDAOs act as independent organizations with their own tokens and treasuries. The structure includes FacilitatorDAOs, designated as ZERO and ONE, to govern operations, while AllocatorDAOs, designated as TWO through FIVE, manage collateral and legal fees. One example is Spark Protocol, which functions as an Aave v3 fork and holds between \$5 billion and \$6 billion in total value locked. The rebrand to Sky Protocol, which saw Phase 1 completion in May 2025, introduced the SKY token. MKR holders can exchange MKR for SKY at a one-way ratio of 24,000 to 1. You already know that high token prices make it hard for small holders to participate. This redenomination was intended to make the token price more accessible. The plan also introduced the ability to stake SKY to earn rewards from SubDAO income. MKR now functions as a "central bank" asset backing DAI. The protocol also planned a 2025 move to a dedicated blockchain to improve governance and yield.

The Sky Protocol in 2026

The Sky Protocol dominates the decentralized stablecoin market in 2026. USDS supply reached \$9 billion by April 2026, while DAI supply fell to \$3 billion. The combined supply of both assets exceeds \$12 billion. Real-world assets back more than 50% of the total supply. These include BlackRock BUIDL and holdings from BlockTower. The on-chain RWA exposure exceeds \$2 billion. The Sky Savings Rate pays between 4% and 9% APY to users, which makes Sky a direct competitor to bank deposits in the DeFi space. The market share of DAI fell to 4.2% as competitors like PayPal’s PYUSD grew. Users access the system through Sky.money, which provides the consumer front end. USDS and DAI remain fungible through a permanent Upgrade Hub that allows 1:1 swaps with no fees. The redenomination process remains opt-in and one-way for all users. SKY trades in the \$0.04 to \$0.08 range in 2026. While these assets provide stability, the reliance on US Treasury bills creates massive exposure to traditional market fluctuations. Will the SubDAO model prevent governance capture by large interest groups?