MakerDAO creator Rune Christensen said on Discord that the DeFi system may explore decoupling its native currency DAI from stablecoin USD Coin (USDC).
“We’ll talk about it on the conference tonight, but I believe we should seriously explore depegging from USD… It is practically unavoidable that it will occur, and it is only feasible to do so with massive amounts of planning.”
Given that MakerDAO may substitute USDC as collateral with Ethereum, this move might have been influenced by tornado sanctions (ETH).
“I’ve been doing more study on the TC sanction’s effects, and sadly, it’s a lot more severe than I initially anticipated.”
Tornado Cash, a prominent crypto mixing platform, was recently sanctioned by the US Treasury Department for allegedly assisting money laundering for hacking organisations like as the North Korean government-sponsored Lazarus Group, according to Blockchain.News. Yearn.finance key developer Banteg indicated MakerDAO’s thoughts of joining the Ethereum bandwagon when he tweeted:
“MakerDAO is planning a $3.5 billion ETH market purchase, in which it will convert all USDC from the peg stability module into ETH.”
As a result, Ethereum will support more than half of the DAI stablecoins.
Nonetheless, Ethereum inventor Vitalik Buterin stressed that prudence could not be ignored since this was a dangerous venture. He said, “
“Errr, this seems to be a dangerous and bad concept.” If the value of ETH falls significantly, the value of collateral will fall dramatically, but CDPs will not be liquidated, putting the whole system in danger of becoming a fractional reserve.”
The MakerDAO was also dissatisfied with this choice, seeing it as another Terra in the making, given Terraform’s mistake of backing its native currency UST with Bitcoin (BTC) while the LUNA meltdown persisted.