A thread summarizing the latest Maker Drama™
How we went from onboarding a US Commercial Bank to discussing how to depeg from the US dollar in less than two months. (1/38)
A thread: *ALL ABOUT AJNA*
@ajnafi
Next week Ajna redeploys to the Ethereum mainnet and to multiple L2s. I think it's as good a time as any to share the story of how the project came to be, and why it was so insanely hard to build.
The story begins in July of 2021 with the
The Uniswap frontend is public and open source, to my knowledge. What's stopping all you keyboard warriors from hosting your own without the blacklist? 👀👀
Things I'm going to do today:
1. Print some money without selling my ETH (Dai with
@MakerDAO
)
2. Use this money to buy ETH and bet on the
#SuperBowl
using
@AugurProject
(through
@veil
)
3. Feel really smart or really dumb depending on the outcome
I keep getting the question "How would Ajna handle the CRV situation?"
Let's think through it.
For one, Ajna functions more like compound/aave than Maker/MIM in the sense that it sources liquidity from users and not from a native stablecoin. Second, there is no
The Maker/Ethena drama is so mid curve I can't take it. No, it's not going to spontaneously implode. It's also not a "no brainer." It's nuanced.
USDe is going to scale to the double digit billions because it's an incredibly good idea and an amazing structured product to have
To get involved in Maker governance:
For further updates on the inner workings of DeFi, please give me a follow. I'm currently helping to build a truly decentralized lending protocol called
@ajnafi
and still doing new work in the RWA space (38/38)
A blockchain-based application just powered 4,405 merchant sales at a massive event and **only extracted $0.20 in rent**. How are people's heads not exploding?
The Burner Wallet at
@EthereumDenver
was 🔥 AF!!! Smooth user onboarding powered 4405 meal purchases at $0.000046 USD per transaction means it cost $0.20 to run the entire event on xDai 😏 Plus, $38,432.56 off-ramped to food trucks!
LUNA is now at the point where Maker would trigger a liquidation on an ETH vault. Would have been way higher for a volatile token like this.
I like to joke about the absurdity, but if you're holding UST... you don't want to be someone else's exit liquidity. There's no upside.
This deal took an incredible amount of coordination to close. A good comparison for doing a deal in Maker is trying to get something through Congress - except the political parties are not overt and the politicians are occasionally anons operating behind cartoon avatars. (6/38)
(Sidenote - Somewhat humorously,
@bantg
has discovered a great twitter engagement strategy where he lurks in the Maker discord and waits for Rune to say something ridiculous and then tweets it, which is how this spilled out of the forums and into the media.) (32/38)
Hate decentralized “governance”?
@m0labs
has some good news →
It’s no secret that I’m not a fan of decentralized governance. The current implementations of these mechanisms are an embarrassment to our industry.
Governance is used in dapps when a subjective input is needed. In
A year ago,
@lucaprosperi
,
@oliver_schimek
, and myself set out to remedy what we viewed as structural deficiencies in the DeFi landscape. Today we are proud (with most of the thanks going to the team of nearly 50 people we have built) to release the M^0 whitepaper.
The original
The M^0 whitepaper is live.
M^0 is an on-chain protocol, as well as a set of off-chain standards and APIs, that allows multiple issuers to mint a fully fungible cryptodollar: M.
Minters connect to the protocol to manage the supply of M. Validators support the process
While I'm saying nice things about VCs 😉...
Ajna didn't have a traditional round and there was no lead, but
@nascentxyz
@hack_vc
@hash3xyz
were the fastest highest conviction "yes" I've ever gotten.
If you're building something in deep DeFi, call them.
In case it's unclear, everyone is fired. Or at least I quit, so they might have to fire themselves?
Also we no longer have editorial input on the Twitter account... God help us.
*Takes a deep breath*
Commencing with its full launch on January 11, 2024, the Ajna protocol will be fully operational as a decentralized, permissionless lending, borrowing, and trading system.
Consequently, Ajna Labs LLC (“Ajna Labs”) will no longer be involved in the
It's been a long road, but we're really just getting started. Stablecoins (or Cryptodollars, whatever you want to call them) will be the primary future driver of global dollarization. M^0 is the tech stack that cuts no corners to make this happen.
I have to ask... If you're holding DAI and not putting it into this
@ajnafi
sUSDe collateral pool that's currently yielding 45% APR (~56% APY), especially considering DAI is about to be backed by USDe, what exactly are you doing with it?
The majority of Dai is already backed by USDC, it doesn't matter whether it's at Coinbase or "in" Maker, it's already centrally controlled. Therefore this is an objective improvement as it's letting Maker earn more yield by taking the exact same risk.
I have formally voted on
@coinbase
's proposal to capture $DAI.
If this proposal passes, it will permanently end
@MakerDAO
's claims of decentralization & censorship-resistance.
See that tiny red blip on the "no" line?
That's me.
I'm the only recognized delegate voting against.
@MPtherealMVP
To quote
@MicahZoltu
from like 3 years ago.. Crypto is an "opt-out" of the current system. It doesn't save countries, it let's people save themselves from countries.
1/ Introducing Social Payments 💸🐦📲 – a Twitter-native financial ecosystem.
Today, you can send USD to any Twitter handle, regardless of where that person lives — even if they don’t have a Dharma account.
Now *every* Twitter handle accepts (and earns interest on!) payments.
The forum and discord exploded with activity. The decentralists replaced Blec with
@ameensol
as their de-facto leader. In my mind this marks the new era - the battle for the soul of Dai. (31/38)
#DeFi
MakerDAO's smart contract could've been completely drained of it's $ETH ($7.2 million worth) "The cost of performing the attack is almost zero".
Would've been interesting to see if they would've done another bailout.
We built a new faucet:
✅ Funds wallet across 4 testnets at once (Ropsten, Kovan, Görli,
@optimismPBC
Kovan)
✅ Drips 5 ETH, 5 wETH, 5K DAI, and 5 ERC721 NFTs
✅ No need to tweet your address, just sign in with Twitter instead
I wrote a post summarizing my thoughts on Terra's stablecoin, $UST.
In summary, I'll be surprised if doesn't collapse under its own weight. Its growth causes a proportionate increase in its burn rate that will be increasingly more difficult to match.
After four years of building and leading the
@MakerDAO
Business Development team, I was torn as to what my next steps would be when the Maker Foundation began its dissolution...
Just bought my first AI Generated painting from
@DrBeef_
on
@SuperRare_co
! Robbie trains AIs with oil paintings and then makes them convince other AIs that they're real paintings.
David and I used to sit next to each other in the
@MakerDAO
NYC office, where I had a front row seat in observing his work ethic and dedication. He's *the* expert in DeFi community building. I know I speak for the whole team when I say how excited I am to have him on board.
☀️☀️☀️
Today I begin a new chapter as the VP of Grants & Sr. Community Manager
@Ajnafi
I have two goals
1. Build an amazing community where folks can learn and do business
2. Create a superb grants program aimed at protocol success.
Excited to pour my heart into this thing 😊
Sooo get 99.95% off a new Garlic Guajillo Steak entrée when you spend your ETH using
@FlexaHQ
at Chipotle.
Exp 10/4 or $20K in total redemp. In-restaurant only; no digital orders. Subj. to avail. 1/acct (max. discount $20/purch). Terms: . Offered by Flexa.
For me, I intend to continue to learn and listen. I honestly don't know what the right path forward is yet. My gut tells me it's going to be somewhere in the middle of all these paths. How would you choose, anon? (37/38)
LOVE had broad support among VCs and the centralists, but no support from the futurists or decentralists. The unit was to be lead by
@LucaProsperi
who has done an excellent job of chronicling the saga here - (24/38)
First some context. MakerDAO uses token governance to make changes to the protocol.
Most changes can be boiled down to (a) new credit lines, aka "debt ceilings", (b) new expenditures, mainly for "core units" of contractors. (2/38)
So what are Juiced Pools, actually?
Or
Why I love my anonymous cartoon internet friends ❤️
Before we ceased operations at
@ajnafi
LLC, we made a bunch of anonymous cartoon internet friends. It turns out they all contribute to
@yearnfi
. They asked us “what’s the plan for
I tremendously appreciate all of our investors and partners, I don't have a single complaint.
But it's worth calling out that
@PanteraCapital
has consistently, for a year now, went above and beyond in their role as the lead of our round. Every founder should take their call.
1/ In April 2023, we
@PanteraCapital
announced that we were leading
@m0labs
seed round. Today, we are thrilled that they are introducing what they are working on to the world. 👇
The decentralists are probably the oldest political group in MakerDAO and have never really had a figurehead (as decentralists are wont to do). But in May,
@ChrisBlec
became their de facto figurehead when he got about 6k MKR staked to him by toeing this party line. (14/38)
So where does this leave us? The centralists make excellent points about the impracticality of such radical plans. That Dai will be functionally useless if it's not pegged to the dollar. The decentralists and futurists retort that it needs to exists to be useful. (36/38)
The LST/ETH pools on
@ajnafi
have hit a point that I think is ridiculous. For example, you can currently borrow ~400 ETH (over $1M) for 0.8% with ~15x leverage. So if you have 25 rETH you can basically be making 32% APY with comparatively little risk.
*NOT FINANCIAL ADVICE*
Welcome to the oracle free zone!
Interesting design. Similar to Ajna but seems to have a more peer-to-peer approach which will improve simplicity but limit functionality.
Introducing Blend!
@blur_io
wanted a lending protocol with:
* Arbitrary collateral, including NFTs
* No oracles
* No expiries
* Market-set interest rates
So
@transmissions11
and I worked with them to design a new mechanism
Here’s how it works 🧵
Immediately after this action, Circle, who has been spouting marketing nonsense about "muh DeFi" for years, blacklisted all USDC in the Tornado contracts. (29/38)
If you're unaware, MakerDAO is the largest single holder of USDC via its PSM mechanism. This isn't a new issue, after all that's why Maker was onboarding real world assets like HVB's loans in the first place. But the collective "oh shit" when this happened was palpable. (30/38)
The futurists want to get the expenses that the centralists continue to incur off the DAO's balance sheet. They see corruption and waste in the core unit budgets. The centralists see vague dreams in the plans of the futurists, lacking practical next steps. (21/38)
This has made me more optimistic about decentralized governance than I've been in years. Nouns have built the best implementation of a DAO I've seen yet.
The futurists are about advancing the vision of "clean money," i.e. the idea that Maker will be used to advance the obsolescence of fossil fuels, and by the "End Game Plan," a scaling plan from Rune that I've affectionately termed a Sci-Fi novel. (10/38)
The centralists don't necessarily have a figurehead, but if one were to emerge my bet would be on
@SebVentures
, as he's the most senior member of their ranks and (in my mind) has put forth the most proposals embodying their philosophy. (12/38)
It wasn't obvious at the time, but this deal was apparently the glue holding together the entire DAO political allegiances. Shortly after the vote passed, lines started to be drawn. (We can't really know if this is true, but it's my story so deal with it.) (8/38)
In corner
#2
there's the "centralists," who do not have as clear of a vision or leader. If I had to describe their position it's "get shit done." They are happy to sacrifice a bit of decentralization if it means something might actually happen in Makerland. (11/38)
Feb 2020: "Compound will not release its own stablecoin. We have zero plans to create a stablecoin, I'll go on record and say that, you can tweet that." -
@rleshner
Dec 2020:
“Show me the incentive and I will show you the outcome.” - Charlie Munger
The decentralists primarily align with Dai holders, but in an ideological way. I.e. they're more concerned with the censorship resistance of Dai than its utility in the ecosystem. (18/38)
Rune's latest plans are nothing short of radical - to depeg Dai from the dollar and to push all core units and non-crypto vaults to the theoretical construct of Meta-DAOs. He has the support of his fellow futurists and the decentralists. (35/38)
Governance is a bad solution, period. Something you use when absolutely no better alternative exists. Even then, it should be ruthlessly minimized. The only people dumb enough to think governance works better than markets are socialists.
Trading and lending are not things that
In corner
#3
are the "decentralists." This is the "ideological right" of the DAO and they want absolutely zero centralized dependencies for the protocol. It's an admirable goal. The problem is there has yet to be a good way to achieve this. (13/38)
The centralists have a lot of members on the DAO payroll, whether core units or delegates, and are therefore generally aligned with the operational apparatus of the DAO. At times, they've been able to align the VCs (who pack big MKR heat if you can get them to vote). (17/38)
There has been a quiet revolution fomenting in decentralized finance.
The premise is simple, almost embarrassing; the “D” in DeFi is a farce and we need to do something about it before it’s too late.
@ajnafi
and others want to change that.
🧵👁️
I'm doing a thing where I use
@redactedcartel
's apxETH to create
@yearnfi
yETH, but it takes a while and I want liquidity.
If you have WETH, I'm willing to pay 10% for now to borrow vs the apxETH.
(Front end options)
The discussion that informs Maker's token governance happens on its Discourse forums and Discord server. These channels collectively comprise the "Maker Community" as you'll see it referred to. (3/38)
Why are Yearn strategists aping into the YFI/DAI
@ajnafi
pool on
@summerfinance_
?
1) Misplaced nostalgia for DeFi summer?
2) Stacking Ajna rewards.
3) Incoming Ajna strategy alpha?
Whatever you think the answer is, join them
Things you couldn't say in 2016: "Hang on, I'm just firing off this tweet to help decide monetary policy for this central bank we started on the internet."
You don't raise rates from 1.5% to 10% in a swift move, crazy that that's on the table. Should be more gradual with increases imo, look to other similar margin loan rates at places like Interactive Brokers, at least start targeting around there 1st
Today we are proud to make the Ajna whitepaper public:
What is Ajna? Ajna is a lending protocol with no governance, permissions or external price feeds (oracles). You can use it to borrow and lend against your entire portfolio, including NFTs.
1/9
Many others. Usually much smarter than me. But the problem is that truly decentralized systems scale inversely to centralized ones, so we're all going to need to have a bit of faith and patience if we want protocols like Ajna to reach mass adoption.
Now everyone in the community pretty much knows each other at this point. It's kind of like if they made the song "Hotel California" into a reality show.
Don't worry about casting, we've got plenty of characters already. (4/38)
Today Dai was featured in one the largest newspapers in Argentina. Blockchain and stablecoins are making a real impact in countries where the legacy financial system faces challenges.
Up until now, the decentralists have been largely ignored. In the bull market the futurists and the centralists had agreed on enough to shove them aside when it came to votes. (22/38)
At
@m0labs
we're building technology that allows institutions to generate a fungible, structurally superior cryptodollar. We're launching soon and need someone to help us build a narrative/public presence that is as good as our tech.
DM if interested
Since ppl arent aware, some time ago I built llamasearch, which expands google search with the most common crypto usecases:
- Go to trusted websites (eg maker) and avoid scams
- Check token prices
- Check addresses on etherscan/debank
When the bull market was raging, all of these underlying ideological differences were swept under the rug. Everyone was doing well. This worked until the market pulled back and the DAO started losing money. The mythical end of this era was the closing of the HVB deal. (20/38)
They would argue that this *is* its utility in the ecosystem. They have Nikolai (
@delete_shitcoin
) on their side, Maker's other co-founder, and some of the OG engineers from the Core Units. (19/38)
@Remi_Tetot
(1) You're obviously not going to delete yourself. Posting something like this makes it seem like you didn't learn anything.
(2) I do think it would be helpful for you to write a thorough post-mortem on UST/LUNA, just like you would write on any failed experiment.
Missing the point. The goal is censorship resistance, not collective intelligence. Honestly reaching the efficiency of an individual would be the DAO equivalent of the singularity.
I’m super excited to announce the launch of ⚡️ Spark Protocol ⚡️ - a growth-focused arm of the Maker Protocol.
Our first product is Spark Lend which builds upon Aave V3 to bring the best lending market features to Maker.
🧵👇
Now it's important to understand the alignment of the various political parties in order to understand why they act the way they do. The futurists are mainly aligned with Rune and therefore their main allegiance is to the MKR token. (16/38)
*clears throat*
*does a little drum roll*
*taps mic*
Announcement of announcement time.
Ajna launches at 9am Eastern Time tomorrow!
*drops mic*
*picks it back up again*
LFG!
Hey
@vaultsfyi
how can
@ajnafi
get integrated? It already has 2 of your top 10 Vaults by APY via Yearn, but it would be 3 if you could see this pool as well:
Hey
@ajnafi
this guy is calling out all of our competitors as potential marketplaces even though they had a lending market within 20 minutes of their launch tweet.
This is an UNALIGNED PROTOCOL. I demand Ajna gubbernance remove this asset immediately.
Wait... Shit...
Have seen a couple comments along the lines of:
"I can just do it myself"
Sure you can, think even my grandmother can
It is not the cash and carry which is interesting in isolation, it is what you can unlock when this is trade is transformed into a liquid and composable token:
Fun fact: The ability to trade commodities on a blockchain (I was a commodity futures trader) was what got me interested in Ethereum in the first place - although at the time it was on BitShares.
Better late than never. Excited to see
@OstiumLabs
finally making this a reality.
The latest Maker Drama™ begins when, with the help of my company (RWA Co.), Huntingdon Valley Bank (HVB) was awarded a 100M Dai debt ceiling to help diversify Maker's real world asset portfolio out of USDC. (5/38)
Historically speaking, the LOVE unit itself should have been quite uncontroversial, but the meta had changed in the background and it was a victim of circumstance. The futurists and decentralists had found common ground. A new political alliance was born. (25/38)