Galaxy Digital, a widely known asset administration agency, notes that MakerDAO, one of many longest-running decentralized finance (DeFi) platforms within the ecosystem, has been criticized up to now for making selections that appeared to prioritize the protocol’s profitability over its unique mission of constructing a extra decentralized and resilient DAI stablecoin.
Nevertheless, the agency maintains that “MakerDAO is now some of the worthwhile DeFi protocols.” That’s, it has achieved its purpose whereas its stablecoin has improved by way of its backing. This transformation has been achieved because of the DAO’s resolution to enter into the tokenization of real-world belongings. (RWA).
RWA refers back to the tokenization or illustration of actual bodily or monetary belongings within the type of tokens on a decentralized community. Property that may be tokenized embody actual property, art work, automobiles, mental property rights, investments in non-public corporations, commodities, monetary contracts, amongst others.
Due 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, based on the corporate.
As seen within the following chart, DAI has develop into predominantly backed by RWAs, abandoning USDC, which till final yr was the principle reserve asset for the stablecoin.
By staking real-world belongings, the protocol seeks to “reposition its core providing from a leveraged product to a high-yield financial savings software, which seems to be a extra sustainable progress driver going ahead and a greater reflection of Maker’s evolution,” Galaxy stated.
On this sense, a greater reflection of the evolution of MakerDAO It’s the arrival of a brand new stablecoin known as USDSwhich Galaxy says appears extra acceptable than DAI. USDS is a separate asset from MakerDAO’s stablecoin, DAI. Customers trying to transfer to the brand new coin will be capable to transact 1:1 between DAI and USDS or vice versa.
MakerDAO adjustments its title and introduces new options
This variation is a part of the rebranding of the protocol, which may even be known as Sky Ecosystem, as reported by CriptoNoticias. On this method, 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 charge and extra intuitive governance mechanisms for SKY holders.
Among the many new options is the power to “freeze” with the brand new USDS forex. This refers back to the capacity to limit or restrict the use or entry to sure belongings or functionalities inside the USDS contract. This may occasionally embody the power to briefly block belongings or transactions to adjust to regulatory or safety necessities.
Galaxy notes that it isn’t a “good instance” for the remainder of DeFi, most likely as a result of contrasts with the elemental precept of decentralization and freedom that characterizes DeFiNevertheless, the agency considers this transfer comprehensible, given the “heavy reliance on the protocol of its regulated banking companions to entry Treasury payments and different RWAs for yield.”
“In its present state, Maker is just too enmeshed with these closely regulated entities for DAI to reverse course and return to its unique mission,” Galaxy says.
It is very important spotlight that DAI will live on for these customers preferring to not convert to USDSNevertheless, the agency claims that DAI has by no means been as profitable as a decentralized stablecoin, and there are options that supply extra strong and censorship-resistant options on this regard.
MakerDAO’s present aggressive benefit lies within the enterprise alliances it has cultivated as a part of its RWA initiativesThese alliances, with entities corresponding to Huntington Valley Financial institution, SocGen and Coinbase Custody, have allowed it to ascertain a powerful presence available in the market.
Galaxy considers that MakerDAO can play a pivotal function in the way forward for decentralized finance by facilitating the tokenization of belongings and making DeFi extra accessible to institutional and retail traders. Moreover, by establishing new governance requirements, MakerDAO is positioning itself as a pioneer within the improvement of extra environment friendly and democratic buildings for DAOs.
In different phrases, MakerDAO shouldn’t be solely creating an revolutionary monetary protocol, however it’s also contributing to the evolution of the DeFi ecosystem as a complete.