The founder of MakerDAO, Rune Christensen, said on the project’s official Discord channel that they are seriously considering moving away from using Circle’s stablecoin USD Coin (USDC) following the immediate closure of USDC addresses sanctioned by US authorities for interacting with Tornado Cash.
MakerDAO prepares to ditch USDC
For the project decentralized stablecoin DAI, Christensen said the consequence of the Tornado Cash sanction is “a lot more serious than I first thought.” He urged the governance community to start preparing to depeg USD from DAI’s collateral.
DIA is collateralized by USDC, WBTC, ETH, and other assets. However, a significant percentage of the collateral is held in the USDC stablecoin – up to 49.6%. Christensen appears more worried now that DAI’s reliance on USDC exposes most of the collateral to the risk of being censored.
He said MakerDAO needs to thoroughly prepare for the move and that it’s inevitable for DAI to depeg from the USD.
“Will be discussing it at tonight’s call but I think we should seriously consider preparing to depeg from USD… it is almost inevitable that it will happen and it is only realistic to do with huge amounts of preparation,” Christensen said Discord.
Buying ETH for collateral is a bad idea
Among other assets, MakerDAO considered converting the USDC holdings to Ether. However, many people, including the co-founder of Ethereum, Vitalik Buterin, argued it’s a terrible idea due to the volatile nature of ETH.
“If ETH drops a lot, value of collateral would go way down […} Personally I think no single type of non-ETH collateral should be allowed to exceed 20% of the total. Maybe even limit to max 20% in any single jurisdiction. And if you can’t do that, put a limit on DAI’s growth (eg. by adding a negative interest rate) until you can,” Vitalik Buterin.
