Decrypt learns about MakerDAO’s plans to make the DAI stablecoin 100% decentralized

To do this, the company will cooperate with leading industry players and buy US Treasury bonds and BlackRock’s corporate bonds

24.10.2022 - 11:15

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3 min

What’s new? Decentralized Autonomous Organization (DAO) Maker is considering a plan called Endgame designed to increase the decentralization of its algorithmic stablecoin DAI. This proposal was put forward by the platform’s founder Rune Christensen after sanctions were imposed on the Tornado Cash crypto mixer in August. Cryptocurrency exchanges Coinbase and Gemini have already offered their versions of its implementation, Decrypt reports.

News on the Decrypt website

What other steps are envisioned? Christensen’s proposal is designed to make DAI 100% decentralized by depeging it from large centralized assets that can be frozen or confiscated at the request of regulators. According to Daistats, about 40% of DAI’s collateral is centralized USD Coin (USDC) stablecoin from the issuer Circle. After the US sanctions against Tornado Cash were imposed, the company froze the coins associated with the addresses hit by the restrictions.

For example, Coinbase, through its paid extension for institutional investors, Coinbase Prime, offered Maker 1,5% per annum for a $1,6 billion deposit in USDC, which is currently in DAI’s Peg Stability Module (PSM) to the US dollar. For his part, Gemini CEO Tyler Winklevoss proposed a yield of 1,25% for the exchange’s stablecoins, GUSD, which act as collateral for DAI if their sum exceeds $100 million.

Source: Raphael Spannocchi’s blog, Maker’s member

As for the purchase of US Treasury bonds, back in June, MakerDAO voted to invest 400 million DAI in that financial instrument. Another 100 million coins will be distributed to various exchange-traded funds (ETFs). Thus, according to Decrypt, the company buys corporate bonds from BlackRock, the world’s largest investment company.

What is MakerDAO? It is a protocol based on the Ethereum blockchain. The DAI stablecoin ranks 13th in the cryptocurrency ranking with a market capitalization of $6,24 billion. Maker, a decentralized trading platform, provides lending and borrowing services for cryptocurrencies.

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