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 prior to now for making choices 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 when it comes to its backing. This transformation has been achieved due to the DAO’s choice 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. Belongings that may be tokenized embrace actual property, paintings, automobiles, mental property rights, investments in personal firms, commodities, monetary contracts, amongst others.
Because of the transfer into RWAs, the DAI stablecoin is now not ridiculed for being a “wrapped USDC” and Maker DAO is now “envied” for its profitability, in line with the corporate.
As seen within the following chart, DAI has turn into predominantly backed by RWAs, forsaking USDC, which till final yr was the primary 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 device, 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 referred to as USDSwhich Galaxy says appears extra applicable than DAI. USDS is a separate asset from MakerDAO’s stablecoin, DAI. Customers trying to transfer to the brand new coin will have the ability to transact 1:1 between DAI and USDS or vice versa.
MakerDAO modifications its title and introduces new options
This variation is a part of the rebranding of the protocol, which may even be referred to as Sky Ecosystem, as reported by CriptoNoticias. On this manner, not solely a model renewal is launched, but in addition 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 many new options is the power to “freeze” with the brand new USDS foreign money. This refers back to the skill to limit or restrict the use or entry to sure belongings or functionalities throughout the USDS contract. This may occasionally embrace the power to briefly block belongings or transactions to adjust to regulatory or safety necessities.
Galaxy notes that it’s not a “good instance” for the remainder of DeFi, in all probability as a result of contrasts with the basic 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.
You will need to 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 alternate options that supply extra sturdy 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 equivalent to Huntington Valley Financial institution, SocGen and Coinbase Custody, have allowed it to determine a robust 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 growth of extra environment friendly and democratic constructions for DAOs.
In different phrases, MakerDAO isn’t solely creating an modern monetary protocol, however additionally it is contributing to the evolution of the DeFi ecosystem as a complete.
