MakerDAO Co-Founder Recommends DAI-USD Depegging to Limit Attack Surface

MakerDAO Co-Founder Recommends DAI-USD Depegging to Limit Attack Surface

In light of recent talk of withdrawing its native token from USD Coin (USDC) amid the Tornado Cash sanction, MakerDAO co-founder Rune Christensen reached out to the community to explain why free floating AID may be the only choice for the decentralized autonomous organization (DAO).

In his blog Publish, “The Path to Compliance and the Path to Decentralization: Why Maker Has No Choice But to Prepare to Free Float Dai,” Christensen Revealed While Miscalculating the Risks of Risk-Weighted Assets (RWA). He stated:

“Physical crackdowns on crypto can occur without notice and without the possibility of recovery, even for legitimate and innocent users. This violates two fundamental assumptions we used to understand RWA risk, making the authoritarian threat much more serious.

While revealing the protocol’s inability to comply with regulators, Christensen suggested that “we must choose the path of decentralization, as has always been Dai’s intention and goal.”

DAI collateralization data. Source: Dai Statistics

He believes that decentralizing Maker would reduce the impact of the crackdown on the overall protocol, adding that “the only choice then is to limit the attack surface by reducing RWA exposure to a maximum fixed percentage of total collateral – it requires a free float away from the USD.”

Importantly, over 50% of DAIs are currently USDC-backed, as evidenced by daistats Data.

Related: MakerDAO should “seriously consider” removing DAI from USD – Founder

Joey Santoro, the founder of the decentralized finance (DeFi) The Fei Protocol platform recommended revoking Tribe DAO’s participation after reimbursing Fuze victims.

Previously, hacker Rari Fuze was offered a $10 million bounty for returning the $80 million in assets, but Fei Protocol received no response from the attacker.