CRV model? Maker founder proposes Sagittarius Engine economic model to address climate issues

MakerDAO founder Rune Christensen proposed a lengthy article on the 5th titled "The Case for Clean Money", stating that Maker has evolved into a decentralized governance organization. He believes that Maker needs a compelling and focused vision to showcase its transformative power in DeFi and attract more outsiders. The vision he came up with is addressing climate change. In his DeFi vision, the ESG concept - Environmental (E), Social (S), Governance (G) - plays a significant role.

Within the extensive content, the most impactful part in the near term is the changes in the token economic model, demonstrating the founder's progressive ideas and determination to empower MKR with broader governance rights.

What is the connection between DeFi and climate issues?

Founder Rune Christensen emphasizes the severity of climate issues as a global threat and states that at this critical moment, only with the most ancient and powerful tool of human society, money, can survival risks be mitigated.

He points out that the association between DeFi and climate issues lies in the fundamental problem of climate issues, which is the financial and capital allocation problem. The root cause is that the global economy cannot plan for anything beyond the short term and cannot address the corruption caused by centralized and opaque infrastructure. DeFi is aimed at solving such problems.

What can Maker do?

He mentions that Maker reached a consensus in 2018 to develop sustainable finance, supporting collateral related to sustainability and climate. He believes it is not just about using assets related to solar and wind energy as real asset collateral within Maker. Thus, he proposes three elements for flagship collateral:

• Sustainable Collateral: Maker can provide loans for global sustainable energy projects, such as solar energy, wind farms, batteries, and their supply chains.
• Climate-Resilient Collateral: Christensen believes that collateral supporting DAI must be climate-resilient, prepared for economic disasters caused by climate change and not subject to the influence of multiple currencies. Expanding the diversity of collateral to include real assets from countries with climate resilience and political stability will help reduce risks. Friendly DeFi countries can be considered "super countries," such as New Zealand, Canada, Switzerland, and the UK.
• Decentralized Collateral: Christensen believes that after Ethereum transitions to PoS, it will become an efficient and energy-saving blockchain, challenging Bitcoin's dominant position in cryptocurrencies. Therefore, Maker's collateral strategy should prioritize accumulating more ETH and related LP tokens or collateral assets as reserves. He also mentions expanding the application of DAI on platforms like Aave, Compound, and Yearn.

In conclusion, he envisions creating a stablecoin brand supported by sustainable and climate-resilient collateral. He also states that with initial implementation, over $3 billion in USDC assets can be allocated to ESG corporate assets protected by super countries within a year.

Sagittarius Engine Economic Model

Christensen believes that to achieve the "Clean Money" plan, a new token economic model is needed to make it more robust.

The token model called Sagittarius Engine gives long-term MKR lockers certain benefits. By choosing to lock MKR for the long term, one can use the locked MKR as collateral through the Sagittarius Engine to borrow DAI with discounted interest rates and liquidation conditions. He suggests changing the current core unit locking reward model to a large issuance of MKR and incentivizing MKR holders.

Learning from Current DeFi Models

He proposes learning from some emerging DeFi models, adopting diverse token issuance methods like Dutch auctions and yield farms to attract funds from the market and promote more MKR locking and low-interest borrowing under the Sagittarius Engine.

Impact NFT: Certificates with Stories

He introduces the concept of Impact NFT, where MakerDAO facilitates socially meaningful stories recorded in NFTs and distributed through lotteries to users of the Sagittarius Engine. For example, NFTs can show real-time sustainable energy generation data through Maker's oracle. NFTs can also be further developed for gaming or personal image applications.

In Christensen's view, MakerDAO still relies primarily on governance by a core group and lacks transparent standards. While these professionals have created significant value for Maker, the evaluation within the MKR holder community is not positive, and they feel excluded. He believes that attracting more MKR holders to participate in governance through token economic restructuring will be a crucial goal for the next phase.

Maker's Locked Assets Still Among the Top

According to Token Terminal data, MakerDAO currently has $13 billion in locked assets, second only to Curve and Aave. The proposed Sagittarius Engine model seems quite similar to Curve's CRV token providing long-term locking solutions with preferential rewards. In fact, the Maker community discussed expanding staking rewards back in February, but no concrete results were achieved.