Rune Christensen, founder, MakerDAO, a decentralised platform, has requested users of the decentralised autonomous organisation (DAO) to prepare for the depeg of its DAI stablecoin from the United States Dollar (USD), according to Cointelegraph.
Based on information by Cointelegraph, the founder’s views came in the limelight after the recently announced sanctions on Tornado Cash, a cryptocurrency mixer, on the MakerDAO’s discord channel, dated August 11, that the sanctions are grave that what it was thought to be. Moreover, it said that everyone should prepare to depeg its native stablecoin DAI from the USD to avoid any risks’ related to Circle’s recent freezing of sanctioned USD Coin (USDC) addresses.
Cointelegraph’s data stated that US Office of Foreign Asset Control (OFAC), on August 8, barred users and investors from using the Tornado Cash Protocol, and placed 44 USDC addresses linked with the platform on its list of specially designated nationals. After the move, USDC issuers Circle froze stablecoins worth $75,000 linked to the 44 sanctioned addresses. The OFAC officially barred residents from using the Tornado Cash protocol, while placing 44 USDC addresses linked with the platform on its list of specially designated nationals. After the move, USDC issuers Circle froze $75,000 worth of stablecoin linked to the 44 sanctioned addresses. Close to 50.1% of MakerDAO’s DAI has been collateralised by USDC, according to given DAI stats. Christensen has raised concerns over the asset’s mass reliance on a centralised asset in USDC, as circle has shown that it will act in accordance with United States law in case of Tornado Cash. Reportedly, DAI is the fourth largest USD-pegged stablecoin in cryptocurrency, with a current market capitalisation of seven billion dollars, and is considered as the fifteenth largest asset overall.
As stated by Cointelegraph, Yearn.finance’s core developer @bantg suggested that MakerDAO was converting every bit of its USDC from the peg stability module into $3.5 billion Ether (ETH), which would result in more than 50% of DAI being backed by ETH.
(With insights from Cointelegraph)