- MakerDAO co-founder Rune Christensen haas reinforced his desire to drop USDC from the DAI stablecoin
- USDC makes up more than 50% of DAI’s backing and keeps it stable
- Christensen argues that a “free floating” DAI is better than one heavily backed by censorship-friendly coins
MakerDAO co-founder Rune Christensen has reinforced his desire to ‘float’ DAI rather than have it rely on the dollar stablecoin USDC. Christensen suggested two weeks ago that the DAO behind the DAI should consider ditching UDSC after it voluntarily froze 75,000 USDC coins within sanctioned Ethereum wallets following the Tornado Cash affair, a stance he recently reinforced with a blog post.
DAI “Cannot Become “Blacklistable””
In a post on the MakerDAO governance portal entitled The Path of Compliance and the Path of Decentralization: Why Maker has no choice but to prepare to free float Dai, Christensen once again floated his idea of stripping USDC from DAI, something that, however it is performed, will have a huge impact on the makeup of the coin – USDC currently makes up over half the backing of DAI and helps keep it stable and tied to $1.
In the blog post, which expands on his comments earlier this month, Christensen said that surveillance powers post 9/11 have gone too far, stating that “zero tolerance for anything that doesn’t give full control and surveillance powers to the state” is turning those who want privacy into targets.
Christensen adds, controversially, that in order for DAI to not “become blacklistable” and remain free from such interference and seizure, it must limit its exposure to coins that are at risk:
Dai cannot become blacklistable, so Maker does not have the option of becoming compliant. The only choice is then to limit attack surface by reducing RWA exposure to a maximum fixed percentage of the total collateral – this requires free floating away from USD.
Some Supporters Suggest Agreement Over Conflict
Responses to the idea of a “free floating” DAI was, unsurprisingly, mixed. One respondent replied with “Why would an authoritarian government disallow fiat pegged stable assets, but permit free floating stable assets?”, while another suggested that a “pro-active approach with regulators would lead us further than a ideological one”, suggesting that an agreement would be better than a battle.
Others commented that retaining a semblance of financial privacy was essential, especially with Central Bank Digital Currencies on the horizon, although if this comes at the risk of a more volatile DAI, perhaps such an approach will do more harm than good to the protocol.