Christensen thinks the decentralization of DAI would reduce the impact of lawsuits on the MakerDAO protocol. He said the regulations forcing cryptocurrency companies to follow state guidelines him to think of that measure.
Rune Christensen, the CEO of MakerDAO, recently explained that Dai (DAI) issuers plan to take steps toward decentralization. The Danish entrepreneur claimed that removing the US dollar risks of DAI might cause it to lose its USD peg.
Christensen said they should choose the path to decentralization, their original intention and purpose. On August 11th, he proposed converting the USD 3.5 billion worth of DAI reserve of MakerDAO into Ether (ETH).
Vitalik Buterin, the co-founder of Ethereum, referred to it as a dangerous idea. The Canadian programmer developer considers that the depreciation of ETH will lead MakerDAO to fail.
The Decentralization of DAI Might Reduce the Impact of Lawsuits
Rune Christensen told the community that MakerDAO plans to decouple the MakerDAO native token from USD Coin (USDC). He explained why the free-floating Dai (DAI) might be the only option for the decentralized autonomous organization (DAO).
Christensen said that decentralization would reduce the impact of lawsuits on the MakerDAO protocol. He added that they could only limit the risk of real-world assets (RWA) to a maximum proportion of the collateral, which requires USD-free floating.
The executive believes decentralization is the only possible solution, as MakerDAO does not comply with regulatory requirements. Therefore, he considers that they must decouple the stablecoin DAI to implement this concept from USDC.
The Reason Why Christensen Takes that Measure
According to Christensen, the regulations forcing cryptocurrency companies to follow the state guidelines motivated him to think of that measure.
In addition, decentralized finance (DeFi) could not prove its value as a neutral and public good as it delivered no real value. He highlighted that cases like Terra and Celsius ruined the image of those protocols.
Christensen explained that the only option was to reduce the exposure to RWA to a maximum percentage of the collateral. He said that doing that would require a free fluctuation of the price.
The Benefits of Decentralizing the DAI Stablecoin
The company posted on its blog that it had lost hope, claiming that DAI would lose value with the USD dollar with decentralization. However, Rune Christensen highlighted that the end game strategy offers solutions to that problem.
With DAI, MakerDAO proves the existence of a free-floating currency and the acceptance of tokens with a decreasing value compared to the USD.
It will help stabilize the free-floating DAI as the tokens foster the production of more coins from decentralized collaterals.
Mariano Di Pietrantonio concluded that there is not yet a specific date for the change proposed by Christensen. The CEO of MakerGrowth said that this initiative must undergo a formalization and governance process.
The relevance of decentralized cryptocurrencies like Bitcoin in the economy is growing, which the owners of lending platforms know. They know their companies have more opportunities to profit from them than stablecoins.
By Alexander Salazar
