MakerDAO Introduces New Stablecoin USDS, Triggering Concerns within DeFi Community
MakerDAO, now rebranded as Sky, has unveiled a new stablecoin called USDS, which incorporates a feature of asset freezing, provoking criticism from the DeFi community who see this as a betrayal of the decentralization principles embodied by the previous stablecoin DAI.
The freezing feature, similar to that used by centralized stablecoins like USDC or USDT, is seen as a departure from the original spirit of MakerDAO, eliciting negative reactions from DeFi supporters.
Rune Christensen, co-founder of MakerDAO, attempted to reassure the community by stating that the freezing feature would not be activated upon the launch of USDS, and that the current DAI would continue to exist without modifications, while also mentioning the future possibility of a fully decentralized version of DAI, named PureDAI.
Since its inception, MakerDAO has been a cornerstone of DeFi, embodying the ideal of a stable and decentralized cryptocurrency with its DAI token. However, the protocol, once regarded as a bastion of decentralization, has recently faced a wave of criticism within the crypto community with the announcement of a major overhaul.
Rebranded as Sky, MakerDAO has unveiled a new version of its iconic stablecoin, renamed USDS, which has sparked anger and concern among DeFi enthusiasts.
USDS: A Departure from the Original Philosophy of DAI
The new stablecoin, USDS, which is expected to gradually replace DAI, incorporates an asset freezing feature, allowing the issuer to unilaterally lock funds. This type of functionality is commonly used by centralized stablecoins like Circle’s USDC or Tether’s USDT, often at the request of authorities to prevent the use of funds related to illegal activities.
However, this decision is perceived by many as a betrayal of MakerDAO’s founding principles. DAI, from its inception, was designed to be a decentralized stablecoin, an autonomous alternative to traditional currencies, without the centralized control that characterizes other digital assets. The introduction of this censorship functionality in USDS has thus sparked outcry in the DeFi community, which sees this evolution as a renunciation of MakerDAO’s original spirit.
The Community’s Reactions: Between Disappointment and Bleak Predictions
The reactions were swift. On social media, many DeFi actors expressed their disappointment, going as far as predicting the downfall of MakerDAO. ‘cryptunez’ tweeted: ‘Isn’t this going against the project’s raison d’être? Did I miss something?’, indicating that the soul of DAI, as a decentralized stablecoin, is now dead.
Others have pointed out that this decision could mark the beginning of MakerDAO’s descent, faced with increasingly fierce competition from more reliable and fully decentralized stablecoins.
Rune Christensen’s Response: Clarifications and Justifications
In response to the controversy, Rune Christensen, co-founder of MakerDAO, spoke out to clarify the situation. He confirmed the existence of the freezing feature but stressed that it would not be activated upon the launch of the USDS token. He also emphasized that the adoption of USDS is optional, and that DAI, in its current form, will continue to exist without any modifications.
Christensen also mentioned the future possibility of creating a crypto-backed and decentralized version of DAI, called PureDAI, which could offer an alternative for those who remain skeptical of the current evolution. This statement aims to appease the community’s concerns while addressing the growing legal compliance requirements for a stablecoin partially backed by traditional assets like US Treasury bonds.
