Depegging recommended by MakerDAO co-founder

Christensen suggests that “We must choose the path of decentralization”

A recommendation of depegging DAI-USD has been made by the MakerDAO co-founder Rune Christensen. This recommendation was discussed amid the sanctioning of the crypto wash platform Tornado Cash. Rune explained to the community why having a free floating DAI may be the only way to go for the DAO or decentralized autonomous organization. 

Recently in the blog post titled “The Path of Compliance and the Path of Decentralization” written by Christensen, there were points made on miscalculating the risks related to risk-weighted assets. 

“Physical crackdown against crypto can occur with no advance notice and with no possibility of recovery even for legitimate, innocent users. This violates two core assumptions that we used to understand RWA risk, making the authoritarian threat more serious.”

In the crypto space, centralization and censorship are dangerous foes to advancement. Both can end a project way before it can succeed. Centralization and censorship can be seen in many examples such as the current blocking of crypto accounts by mailchimp.

The protocol has an inability to comply with regulators and in his post Christensen suggested choosing the path of decentralization which he claims was always the plan and purpose for DAI.

By fully decentralizing Maker Christensen believes that the amount of crackdowns would reduce as RWA exposure would be minimalized to a maximum fixed percentage. This would require a removal of the relationship between DAI and USD. This may not be an easy task as over 50% of the token is currently collateralized by USDC.

In the blog the co-founder also stated that the window of opportunity for DeFi to prove itself work they of a middle ground has far passed as scams, neutral financial utility, and massive crashes have all damaged the image of the platform. In the post Christensen makes the statement 

“ the blockchain industry completely and utterly failed to produce anything of value during the bull run. Basically nothing was achieved an no new products, services or anything with tangible benefit derived from blockchain technology has entered the mainstream consciousness at any level”

Christensen seems to believe that the only way forward is a complete separation of the two entities and a full embrace of the decentralized values.

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