MakerDAO: The DeFi Institution Rethinking Itself

Why MakerDAO Still Matters in 2025

MakerDAO isn’t just another DeFi protocol. It’s the blueprint. The original. The first to prove that decentralized finance could issue a stablecoin — DAI — backed by crypto collateral, governed by a DAO, and sustained by community incentives. In a world of fast-moving DeFi experiments, MakerDAO remains a cornerstone.

But in 2025, it’s no longer just about stability. MakerDAO is evolving into something bigger, more modular, and more business-minded. With the launch of its Endgame Plan and transition to Sky Protocol, MakerDAO is rewriting its own playbook — and possibly the future of decentralized finance itself.

From MakerDAO to Sky Protocol: A Strategic Rebrand

In mid-2024, MakerDAO began its transformation into Sky Protocol. This wasn’t just a name change — it was a full strategic pivot. The goal? To scale governance, improve decentralization, and prepare for institutional-grade adoption.

The rebrand introduced three new tokens:

• NewStable (NST): A fresh stablecoin designed for farming and liquidity incentives.
• NewGovToken (NGT): A governance token with updated mechanics.
• SKY: The new flagship token replacing MKR in the long term.

Importantly, DAI and MKR remain active — DAI as the “OG stablecoin,” and MKR as a legacy governance asset. But the new tokens are designed to scale the ecosystem and attract broader participation.

SubDAOs: Modular Governance in Action

One of the most innovative features of the Endgame Plan is the creation of SubDAOs — semi-autonomous units that manage specific functions within the protocol. These are designed to reduce governance complexity and allow specialized teams to operate independently.

The first SubDAO, Spark Protocol, launched in May 2024. It focuses on lending products for DAI users and is already gaining traction. More SubDAOs are planned, each with its own token, treasury, and governance system.

This modular approach could solve one of DeFi’s biggest headaches: governance overload. Instead of one DAO managing everything, MakerDAO is building a network of focused, agile units.

Real-World Assets (RWAs): MakerDAO’s Institutional Play

MakerDAO was one of the first DeFi protocols to experiment with real-world assets (RWAs) as collateral. In 2025, this strategy is central to its growth plan. Collaborations with firms like BlockTower Credit and Centrifuge have brought over $220 million in tokenized RWAs on-chain.

Why RWAs? Because they offer:

• Stable yield: Less volatility than crypto collateral.
• Institutional appeal: TradFi understands RWAs.
• Diversification: Reduces reliance on ETH and other volatile assets.

MakerDAO’s RWA strategy positions it as a bridge between DeFi and traditional finance — a theme that’s becoming increasingly important across the ecosystem. For comparison, see our breakdown of Aave’s institutional lending and Yearn Finance’s vault strategies.

AI in Governance: The Next Frontier

Another bold move in MakerDAO’s roadmap is the integration of AI tools into governance. Phase three of the Endgame Plan includes launching internal AI systems to monitor proposals, analyze data, and streamline decision-making.

This isn’t hype — it’s a response to real pain points:

• DAO governance is slow. AI can help filter noise and surface priorities.
• Data is fragmented. AI can unify dashboards and reporting.
• Participation is low. AI can personalize notifications and voting prompts.

If successful, MakerDAO could become the first DAO to use AI not just for analytics, but for governance augmentation. That’s a major leap — and one that could influence other protocols like Synthetix and Uniswap.

Current Strengths: What MakerDAO Does Well

Despite its age, MakerDAO remains one of the most robust DeFi platforms. Key strengths include:

• DAI stability: Maintains peg even in volatile markets.
• Deep liquidity: DAI is integrated across hundreds of protocols.
• Security-first design: MakerDAO has survived multiple market crashes.
• Governance transparency: All decisions are public and traceable.

These strengths make MakerDAO a reliable backbone for DeFi — and a trusted brand for institutions exploring Web3.

Current Challenges: What Needs Work

But MakerDAO isn’t perfect. It faces several challenges:

• Governance fatigue: Too many proposals, too few voters.
• Complex UX: New users struggle to understand CDPs and vaults.
• Slow innovation: Compared to newer protocols, MakerDAO moves cautiously.
• Brand confusion: The rebrand to Sky Protocol is still unclear to many users.

These issues aren’t fatal — but they require attention. Especially as competition heats up from protocols like Aave, Synthetix, and Yearn.

Community Sentiment: Mixed but Hopeful

MakerDAO’s community is diverse — from early crypto idealists to institutional strategists. Sentiment is mixed:

• Some fear centralization: SubDAOs and AI tools feel “corporate.”
• Others welcome pragmatism: The Endgame Plan is seen as necessary evolution.
• Many are watching: Waiting to see if Sky Protocol delivers.

In forums and governance calls, the tone is serious but constructive. MakerDAO isn’t chasing hype — it’s building infrastructure.

Conclusion to Part 1: A Protocol in Transition

MakerDAO in 2025 is no longer just a stablecoin issuer. It’s a full-stack DeFi institution, experimenting with modular governance, real-world assets, and AI-powered decision-making. The transition to Sky Protocol is bold — and not without risk. But if successful, it could redefine what a DAO can be.

In the next part, we’ll explore MakerDAO’s future: what’s coming, what could go wrong, and how it might reshape the entire DeFi landscape.

MakerDAO in 2025–2026: Forecasts, Frictions, and the Future of DeFi Governance

What’s Next for MakerDAO?

MakerDAO’s transition to Sky Protocol is more than a rebrand — it’s a strategic overhaul. The roadmap ahead includes modular governance, AI integration, real-world asset expansion, and a new token economy. But how will this play out in practice?

Let’s break down the key components of MakerDAO’s future — what’s planned, what’s possible, and what could go wrong.

Forecast: MakerDAO’s Strategic Pillars

Here’s what MakerDAO is building toward:

• SubDAO Ecosystem: A network of autonomous units, each managing a specific product or function.
• AI-Augmented Governance: Internal AI tools to assist with proposal filtering, analytics, and decision support.
• Multi-token Economy: NST, NGT, and SKY tokens to incentivize participation and scale liquidity.
• RWA Expansion: More partnerships with asset originators, bringing off-chain yield on-chain.
• Brand Consolidation: Clearer messaging around Sky Protocol, DAI, and MKR legacy roles.

These pillars aim to make MakerDAO more scalable, resilient, and attractive to both crypto-native users and institutional players.

Table: MakerDAO’s Future — Opportunities vs Risks

MakerDAO vs Other DeFi Protocols

Compared to other major DeFi platforms, MakerDAO is taking a more institutional, long-term approach. While protocols like Uniswap focus on liquidity and trading, and Aave on lending markets, MakerDAO is building infrastructure — governance systems, collateral frameworks, and cross-chain stability.

That said, competition is real. Protocols like Synthetix are innovating fast, and newer entrants like Frax are challenging DAI’s dominance with hybrid stablecoins. MakerDAO must balance stability with speed.

FAQ: MakerDAO’s Future Explained

Is MakerDAO still decentralized?

Yes — but with nuance. SubDAOs and AI tools introduce structure, but governance remains open and transparent. The goal is scalable decentralization, not central control.

What happens to MKR and DAI?

Both remain active. MKR continues as a legacy governance token. DAI remains the primary stablecoin. New tokens (SKY, NST, NGT) are designed to expand the ecosystem, not replace it overnight.

Will SubDAOs compete with each other?

Not directly. Each SubDAO has a distinct mandate — lending, liquidity, analytics, etc. Coordination mechanisms are being built to ensure alignment.

Is AI really part of governance?

Yes. MakerDAO plans to use AI for proposal analysis, data aggregation, and even voting assistance. Human oversight remains critical.

Can MakerDAO survive regulation?

It’s trying. By integrating RWAs through legal wrappers and working with compliant partners, MakerDAO is positioning itself as a “DeFi with guardrails” model.

Pros and Cons of MakerDAO’s Evolution

Pros:

• Modular governance: Reduces complexity, improves agility.
• AI integration: Enhances decision-making and participation.
• RWA strategy: Bridges DeFi and TradFi with stable yield.
• Token incentives: Attracts new users and liquidity.
• Brand refresh: Positions MakerDAO for the next wave of adoption.

Cons:

• Governance fragmentation: SubDAOs may dilute cohesion.
• Token complexity: Multiple assets can confuse users.
• AI risks: Over-reliance on opaque systems.
• Regulatory exposure: RWAs introduce legal challenges.
• Legacy tension: Long-time users may resist change.

What to Watch in 2026

MakerDAO’s next 12 months will be critical. Key milestones include:

• Launch of additional SubDAOs — expanding the modular ecosystem.
• Full rollout of SKY token — replacing MKR in governance.
• AI dashboard deployment — testing governance augmentation.
• New RWA partnerships — scaling real-world collateral.
• Cross-chain DAI integrations — expanding beyond Ethereum.

Each of these steps will shape MakerDAO’s role in the broader DeFi landscape. Success could position it as the first truly scalable, institutional-grade DAO. Failure could fragment its community and weaken its influence.

Final Thoughts: MakerDAO as a Case Study in Crypto Maturity

MakerDAO isn’t chasing hype. It’s building infrastructure. Its evolution from a single-token protocol to a multi-layered governance network reflects the growing complexity of DeFi itself.

Whether you’re a developer, investor, or DAO contributor, MakerDAO offers lessons in strategy, resilience, and adaptation. It shows that decentralization isn’t static — it’s a process. And sometimes, the most radical move is to evolve.

For more insights into DeFi governance and protocol design, explore our breakdowns of Aave, Yearn Finance, and Synthetix.

Beyond the basic structure of decentralized governance, the biggest test for any DAO lies in its ability to maintain fair representation and high participation. Many established organizations suffer from crippling low voter turnout and the risk of centralization due to large token holders. To see how innovative models are overcoming these systemic weaknesses, we recommend reading our detailed report focusing on DAO Apathy & Whale Voting Failure, where we break down the mechanics of the flexible Liquid Senate approach.

Disclaimer

This article is for informational and educational purposes only. It reflects current developments, community discussions, and strategic directions within MakerDAO and the broader DeFi space. It is not financial advice, and it does not represent any official position of MakerDAO or its affiliates. Always do your own research, stay curious, and think critically — especially in crypto, where innovation moves fast and assumptions age quickly.