MakerDAO’s Embrace of Centralized Stablecoins Offers Risks and Rewards

MakerDAO’s Embrace of Centralized Stablecoins Offers Risks and Rewards


MakerDAO, rebel no more?

There are two kinds of stablecoins. The centralized type is implemented on a blockchain but anchored to Wall Street and the Federal Reserve. Dai, a decentralized stablecoin governed by the Maker Decentralized Autonomous Organization (or MakerDAO) is emblematic of the second type. It stays as far away from The Man as possible.

J.P. Koning, a CoinDesk columnist, worked as an equity researcher at a Canadian brokerage firm and a financial writer at a large Canadian bank. He runs the popular Moneyness blog.

But over the last month or two, something strange has been happening. Like a vegan eating a steak, dai has been gobbling up huge amounts of centralized stablecoins as collateral. Has dai, once so edgy, donned a suit and gone Wall Street?

MakerDAO’s ingestion of centralized stablecoins is part of its strategy for bringing Dai back in line with its $1 target. It’s

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