MakerDAO co-founder proposes decoupling DAI from the dollar

A freely floating DAI is the only path to decentralisation and regulatory compliance, says Rune Christensen, co‑founder of the DeFi platform MakerDAO.

He noted that in the wake of September 11, 2001, financial regulation shifted toward zero tolerance for tools that authorities cannot control. Recent events such as the collapses of Terra, Celsius and others have undermined trust in digital currencies and DeFi, Christensen added.

“Physical crackdowns on the crypto industry can occur without prior notice and without any redress even for law-abiding, innocent users,” he says.

In his view, this undermines the fundamental premise behind using real-world assets (RWAs) to back the DAI stablecoin, and makes the “authoritarian threat” very real.

Maker cannot blacklist, so the platform cannot comply with regulations, Christensen argues.

“The only option is to limit the attack surface by reducing the impact of RWAs to a maximum fixed percentage of total collateral. To achieve this, a free float away from USD is required,” concluded the founder of MakerDAO.

In Christensen’s view, two main tools will help deliver the solution: MetaDAO and Protocol Owned Vault.

DAI yield farming via MetaDAO will allow users to embrace a floating dollar price for the coin. The reward tokens earned will incentivise the supply of DAI via decentralised collateral, Christensen says.

The Protocol Owned Vault will enable the platform to earn income from negative target rates on DAI and cap them.

As of writing, 51% of the stablecoin’s supply collateralised by Maker is issued against USDC. The total value of assets locked on the platform stands at $9.26 billion.

On August 9, Circle blacklisted USDC addresses on the Tornado Cash mixing platform. This followed OFAC sanctions against the service. In total, one of the stablecoin’s operators blocked movement of at least 75,000 USDC.

Against this backdrop, MakerDAO began developing a plan to reduce reliance on USDC.

As reported, Ethereum co-founder Vitalik Buterin criticized the platform’s plan to rebalance DAI collateral, which would involve selling $3.5 billion of USDC for ETH.

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