Crypto Community Disagrees as MakerDAO Will Allow MKR to Borrow DAI

  • The proposal was that MKR should be used to borrow the DAI stablecoin.
  • The BitMEX co-founder compared it to the case of the ill-fated Terra Luna projects.

The crypto community’s attention has been drawn to a tweet by a MakerDAO delegate, PaperImperium, chastising Rune Christensen, a co-founder of MakerAO. The ambassador highlighted a section of the Maker Endgame Documents, a series of recommendations crafted by Christensen with a crude comment.

He said, “It’s devastatingly disappointing to see MakerDAO’s co-founder pushing this plan. It’s as if nothing was learned this cycle.” The contention was that MakerDAO said the MKR token may now be used to borrow the DAI stablecoin by holders that have delegated their governance power to a delegate.

The tweet raised concerns within the crypto Twitter community, with many crypto insiders joining the discussion. Arthur Hayes, the co-founder of BitMEX, compared it to the case of the ill-fated Terra Luna projects, UST and LUNA.

PaperImperium further argued that if there is a rapid depletion of MKR, it is because governance tokens are being sold off as part of the spiraling liquidation. According to the delegate, it is an excellent method for cybercriminal organizations like North Korea’s Lazarus Group or even lone hackers like those who attacked Mango Markets to make off with users’ assets.

On the other hand, notable people in the stablecoin industry expressed positive opinions about the development.  The CEO and creator of Frax Finance, Sam Kazemian, said:

This is a very interesting direction. I am excited to see it live and will try minting DAI with the MKR token. So basically, part of the DAI supply be backed by its governance token?

“It’s worth noting that FRAX is moving in the opposite direction,” Kazemian concluded.

Related Articles

Back to top button