Why did Vitalik sell MKR? What is the story behind it?
What's the story behind Vitalik selling MKR?
According to The Data Nerd, just yesterday, Vitalik transferred 500 MKR to CoWSwap and sold it, exchanging it for 350 ETH. This is his first time selling MKR in nearly two years.
Undeniably, MKR still has impressive performance in the secondary market with limited liquidity. Since the lowest point on June 10th, it has recorded a 124% increase in price. However, Vitalik chose to sell MKR at this time. What is the reason behind it? What is the story behind it?
The choice forced by the final scene
On September 1st, MakerDao founder Rune posted on the forum to discuss the fifth phase of the “Endgame” project roadmap, which is also the last phase. It involves completely re-implementing the entire Maker protocol and deploying it on a new chain called NewChain. Once the deployment is completed, MakerDAO will permanently enter the Endgame state without any further significant changes. Its core processes and power balance will remain decentralized, self-sustainable, and immutable.
However, it is worth noting that after “researching all possibilities,” Rune made a “not difficult decision”: to trust Solana. Rune listed three reasons for choosing Solana:
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Firstly, the technical quality of Solana’s codebase, as it has been highly optimized for operating a single, efficient blockchain, which is exactly what NewChain needs. Solana’s codebase is well-designed and was only developed after a full understanding of the bottlenecks and challenges in blockchain, which aligns with NewChain’s goal of addressing Maker’s technical debt. Solana already has two clients, which is crucial for flexibility.
Secondly, Solana’s ecosystem survived the FTX explosion, proving the resilience of the public blockchain. Despite all the problems and difficulties, the project still has a thriving developer community. This means it has a significant Lindy effect and may exist in the long term, which also means lower costs for development and maintenance, and there will always be a high-quality talent pool for Maker to access and contribute to.
The third reason is that there are already examples of Solana codebases being forked and adjusted for application chains. The most notable one is the Pyth project, which runs its own modified version of Solana as its backend.
Interestingly, Rune also mentioned Cosmos as an alternative, but he also stated that “Cosmos is not built with efficiency as its core like Solana, which means the cost of maintenance and performance will be higher.” As for Aptos, Sui, and other public chains, they are “simply not suitable.”
Reactions from within and outside the community
The reply on the second floor of Rune’s post may represent the thoughts of most onlookers who saw this epic article: “Please tell me you’re joking…”
In fact, many people left comments below the post to express their opinions. Some asked about the time spent on researching this decision and whether there are detailed technical documents to support this choice. More people started debating whether Solana or other chains are suitable for NewChain. One guy directly refuted Rune’s views:
“The most important reason for needing NewChain is that it allows the ecosystem to gracefully recover from the most severe governance attacks or technical failures through hard forking.”
“The second reason is that the Solana ecosystem has proven its resilience.”
“Everything is going well, and all previous shutdowns have indeed demonstrated its ‘paralysis’.”
“The third reason is that there are already existing examples of the Solana codebase being forked and adjusted to become an application chain.”
“Delete the post, you’re a joke.”
Vitalik’s reaction to this is more direct: sell MKR. The monitored on-chain address has become the most explicit voice.
Star projects, starting anew
In fact, many star projects have the vision of “building their own portal” and starting a separate application chain to solve the many problems they face after their development, such as Axie Infinity choosing to build their own game sidechain Ronin after it exploded in popularity, sacrificing verification nodes to achieve faster transaction speeds and making millions of on-chain game interactions possible; dYdX faced the problem of competing for network resources with many other projects after its ecosystem development, which is unacceptable for on-chain decentralized exchanges. Therefore, it chose to build a new chain on Cosmos to further ensure the protocol’s liquidation speed and decentralization.
Rune and MakerDao were not the first to propose building their own application chain – for projects that have gained independent voice and funding after growing, defection from the “mother body” has become an unavoidable topic, and public chains always seem to be the side that is helpless in the face of this situation.
It’s just that for Vitalik, at least MKR has risen quite a bit.