Galaxy Digital, a widely known asset administration agency, notes that MakerDAO, one of the longest-running decentralized finance (DeFi) platforms in the ecosystem, has been criticized in the previous for making selections that appeared to prioritize the protocol’s profitability over its unique mission of constructing a extra decentralized and resilient DAI stablecoin.
However, the agency maintains that “MakerDAO is now one of the most profitable DeFi protocols.” That is, it has achieved its aim whereas its stablecoin has improved in phrases of its backing. This transformation has been achieved because of the DAO’s resolution to enter into the tokenization of real-world property. (RWA).
RWA refers to the tokenization or illustration of actual bodily or monetary property in the kind of tokens on a decentralized community. Assets that may be tokenized embrace actual property, art work, autos, mental property rights, investments in non-public firms, commodities, monetary contracts, amongst others.
Thanks to the transfer into RWAs, the DAI stablecoin is not ridiculed for being a “wrapped USDC” and Maker DAO is now “envied” for its profitability, in keeping with the firm.
As seen in the following chart, DAI has change into predominantly backed by RWAs, forsaking USDC, which till final yr was the predominant reserve asset for the stablecoin.
By staking real-world property, the protocol seeks to “reposition its core offering from a leveraged product to a high-yield savings tool, which appears to be a more sustainable growth driver going forward and a better reflection of Maker’s evolution,” Galaxy mentioned.
In this sense, a greater reflection of the evolution of MakerDAO It is the arrival of a brand new stablecoin known as USDSwhich Galaxy says appears extra applicable than DAI. USDS is a separate asset from MakerDAO’s stablecoin, DAI. Users seeking to transfer to the new coin will have the ability to transact 1:1 between DAI and USDS or vice versa.
MakerDAO adjustments its identify and introduces new options
This change is half of the rebranding of the protocol, which may even be known as Sky Ecosystem, as reported by CriptoNoticias. In this manner, not solely a model renewal is launched, but additionally new functionalities and rewards. Sky will current new options, together with enhancements to the USDS financial savings fee and extra intuitive governance mechanisms for SKY holders.
Among the new options is the means to “freeze” with the new USDS forex. This refers to the means to limit or restrict the use or entry to sure property or functionalities inside the USDS contract. This might embrace the means to briefly block property or transactions to adjust to regulatory or safety necessities.
Galaxy notes that it is not a “good example” for the relaxation of DeFi, in all probability as a result of contrasts with the basic precept of decentralization and freedom that characterizes DeFiHowever, the agency considers this transfer comprehensible, given the “heavy reliance on the protocol of its regulated banking partners to access Treasury bills and other RWAs for yield.”
“In its current state, Maker is too enmeshed with these heavily regulated entities for DAI to reverse course and return to its original mission,” Galaxy says.
It is essential to focus on that DAI will live on for these customers preferring to not convert to USDSHowever, the agency claims that DAI has by no means been as profitable as a decentralized stablecoin, and there are options that provide extra strong and censorship-resistant options on this regard.
MakerDAO’s present aggressive benefit lies in the enterprise alliances it has cultivated as half of its RWA initiativesThese alliances, with entities corresponding to Huntington Valley Bank, SocGen and Coinbase Custody, have allowed it to determine a robust presence in the market.
Galaxy believes that MakerDAO can play a pivotal function in the future of decentralized finance by facilitating the tokenization of property and making DeFi extra accessible to institutional and retail buyers. Additionally, by establishing new governance requirements, MakerDAO is positioning itself as a pioneer in the growth of extra environment friendly and democratic constructions for DAOs.
In different phrases, MakerDAO is not solely creating an revolutionary monetary protocol, however it is additionally contributing to the evolution of the DeFi ecosystem as a complete.
