MakerDAO Founder Suggests ‘Seriously Considering’ Depegging DAI from USD

MakerDAO Founder Suggests ‘Seriously Considering’ Depegging DAI from USD
Source: AdobeStock / piter2121

MakerDAO (decentralized autonomous organization) founder Rune Christensen has called for the community members to consider depegging Maker (MKR)’s stablecoin DAI from USD, and maybe (slowly) moving into ethereum (ETH) – which Vitalik Buterin argued can be a “terrible idea.”

Writing within the DAO’s Discord channel, as yearn.finance (YFI) core developer banteg shared, Christensen wrote to the members that,

“I think we should seriously consider preparing to depeg from USD… it is almost inevitable that it will happen and it is only realistic to do with huge amounts of preparation.”

The founder shared his reasoning behind this opinion, particularly referring to the US Treasury sanctioning the favored mixer Tornado Cash.

As reported, this week, the Treasury’s Office of Foreign Assets Control (OFAC) successfully banned the Ethereum-powered crypto mixing service within the US. While the group appeared to agree that dangerous actors search to make use of companies like Tornado Cash to launder funds, many argued that privacy-providing apps are necessary, and most agreed that the OFAC’s transfer would possible change into a watershed second in regulation.

Notably, the ban’s results have been felt promptly. Circle, the issuer of the USD coin (USDC) stablecoin, started feezing tokens, beginning with some USD 75,000 price of the stablecoin, that are linked to Tornado.

This is related as, per Dai Stats, practically 50% of DAI is collateralized by USDC.

MakerDAO Founder Suggests ‘Seriously Considering Depegging DAI from USD
Source: daistats.com

Christensen wrote that,

“I have been doing more research into the consequences of the [Tornado Cash] sanction and unfortunately it is a lot more serious than I first thought.”

Developer banteg shared another post on Thursday, per which MakerDAO is actually considering converting its USDC from the peg stability module into ETH.

However, Ethereum co-founder Vitalik Buterin described this as a “terrible idea”, stating that it’s dangerous, and may the worth of ETH drop considerably, the “value of collateral would go way down,” with extra points and subsequent penalties more likely to observe.

And Tron (TRX) founder Justin Sun agreed.

Importantly, Christensen famous that,

“What I actually wrote in the maker governance discord was that yoloing all the stablecoin collateral into ETH would be a bad idea.”

He did add, nevertheless, that transferring some collateral into ETH slowly is an possibility “that can be considered.”

MKR is buying and selling at USD 1,090 at 9:50 UTC, down 2% in a day and up over 3% in per week. Per CoinGecko, DAI is the 4th stablecoin by market capitalization with USD 6.95bn.

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