The decision stemmed from a voting process that the Maker Governance Forum conducted. The community is questioning the use of a centralized stablecoin in a decentralized ecosystem.
The cryptocurrency community learned that MakerDAO will include the anchored cryptocurrency or stablecoin USD Coin (USDC). They said that this centralized asset will help to support the Maker protocol.
MakerDAO will add the US dollar-backed currency to the platform, allowing its storage in the Maker Vault. It should be noted that this is the vault for collateral assets for the generation of credits in Dai, the platform’s native token. This is the third collateral that MakerDAO has approved, after adding Ether (ETH) and Basic Attention Token (BAT) for the same purpose and functionality.
The Maker Governance Forum held a meeting that was open to the entire community and available to the general public. There they conducted a voting process that gave rise to the aforementioned decision.
In this sense, they ensure that any cryptocurrency or asset that they choose to use as collateral must meet the correct risk parameters to be in the platform. In the case of USDC, they specify some values such as their annual commission (20%), rate of collateralization (125%), and debt ceiling (20 million USDC), among others.
However, some users and community members did not welcome the recent announcement by MakerDAO. One of the comments regarding this decision indicates that the centralization of USDC does not align with Maker’s values as a decentralized organization and protocol.
According to one of the participants in the forum, Dai is so special as it is the first decentralized stablecoin backed by both a decentralized bank and decentralized collateral assets. He thinks that, with the inclusion of USDC, it will now be nothing better than the US dollar.
A Spanish-speaking Twitter user asked if there was anyone who could clarify the situation to her in her mother tongue. She said that she found the use of a centralized stablecoin to create a decentralized stablecoin too confusing.
However, other users consider that the integration of USDC will bring more liquidity to the Maker ecosystem. Even so, they believe that this would occur at the cost of losing resistance to censorship.
Users indicate that, if the authorities took control of USDC, the Dai funds backed by this asset would be at considerable risk. Also, the company that issues USDC may freeze funds at its discretion when it deems it necessary, as one of the sections of the USDC Circle User Agreement establishes.
Of course, this feature is in clear conflict with Bitcoin’s ideals of decentralization and resistance to censorship. Therefore, it would also negatively affect cryptocurrency projects like Maker.
The setbacks that decentralized finance (DeFi) platforms have recently undergone might have led MakerDAO to take this measure. Among such hindrances are the security and operational problems that have raised serious concerns in the community.
Besides, liquidity is one of the most valued qualities in this decentralized organization scheme. Users should remember that the fall in Ethereum (ETH) prices caused the liquidation of some securities at 0% in recent days.
By Willmen Blanco