MakerDAO’s Rune Christensen Advocates for DAI to Prepare for Potential Depeg from USD

In the Wake of Tornado Cash Sanctions

Rune Christensen, the founding mind behind MakerDAO, has sparked a buzz in the community with a recent call to action regarding the state of DAI, the DAO’s stablecoin. With recent sanctions targeting the crypto mixer Tornado Cash, Christensen urged members on the MakerDAO Discord to prepare for a possible depeg of DAI from the U.S. dollar. His remarks came as a response to concerns over actions taken against certain USD Coin (USDC) addresses, reflecting a growing unease within the decentralized finance (DeFi) landscape.

The Weight of USDC in DAI’s Stability

As it stands, approximately 50.1% of DAI is collateralized by USDC, which raises eyebrows given recent developments. Following the U.S. Office of Foreign Asset Control (OFAC) barring residents from accessing Tornado Cash, USDC issuer Circle decided to freeze $75,000 worth of USD Coin tied to the sanctioned addresses. Christensen’s perspective? It’s better to be proactive than reactive. He emphasized that with the climate surrounding cryptocurrencies, the inevitability of a depeg is a scenario that must be accounted for.

Community Feedback: Risk vs. Reward

Hot takes swirled in the MakerDAO community following Christensen’s comments. Some members suggested a bold pivot: converting all USDC into Ether (ETH). A proposal that could potentially shift DAI’s backing to more than 50% ETH—a significant leap from the current backing of just 7.3%. Yet, this suggestion drew parallels to the now-defunct Terra project, known for its reckless strategy in backing its stablecoin with Bitcoin before it ultimately collapsed.

Vitalik Buterin’s Warning

Ethereum’s creator, Vitalik Buterin, didn’t mince words when he expressed skepticism about the proposal, describing it as a “risky and terrible idea.” He raised valid points regarding the potential volatility and risk of collateral devaluation in a significant market downturn, which could lead to a scenario where MakerDAO becomes a fractional reserve system. After all, who wants to join the club of projects that became cautionary tales?

A Middle Ground: Partial YOLO-ing?

After some critical pushback, Christensen took to Twitter to clarify his stance. What he actually suggested might work is more of a “partial yolo”—an option of Dollar Cost Averaging (DCA) some collateral into ETH over time, rather than a full-on gamble. It’s a strategic hedge between blacklisting repercussions and the risk of depegging, which—let’s face it—might just be the safer bet in these tumultuous times.