Galaxy Digital, a well-known asset management firm, notes that MakerDAO, one of the longest-running decentralized finance (DeFi) platforms in the ecosystem, has been criticized in the past for making decisions that appeared to prioritize the protocol’s profitability over its original mission of building a more decentralized and resilient DAI stablecoin.
However, the firm holds that “MakerDAO is now one of the most profitable DeFi protocols.” That is, it has achieved its goal while its stablecoin has improved in terms of its backing. This transformation has been achieved thanks to the DAO’s decision to enter into the tokenization of real-world assets. (RWA).
RWA refers to the tokenization or representation of real physical or financial assets in the form of tokens on a decentralized network. Assets that can be tokenized include real estate, artwork, vehicles, intellectual property rights, investments in private companies, commodities, financial contracts, among others.
Thanks to the initiative to delve into the RWAstablecoin DAI is no longer ridiculed for being “wrapped USDC” and Maker DAO is now “envied” for its profitability, according to the company.
As can be seen in the following graph, DAI has come to have majority support from the RWA, leaving behind USDC, which until last year was the primary reserve asset for stablecoin.
Current DAI collateralization. Source: Dune Analytics.
By staking real-world assets, the protocol seeks to “reposition its core offering from a leveraged product to a high-yield savings tool, which appears to be a more sustainable growth driver going forward and a better reflection of Maker’s evolution,” Galaxy said.
In this sense, a better reflection of the evolution of Ethereum-stablecoin-dai-mkr-dapp/” target=”_blank” rel=”noreferrer noopener”>MakerDAO It is the arrival of a new stablecoin called USDSwhich Galaxy says seems more appropriate than DAI. USDS is a separate asset from MakerDAO’s stablecoin, DAI. Users looking to move to the new coin will be able to transact 1:1 between DAI and USDS or vice versa.
MakerDAO changes its name and introduces new features
This change is part of the rebranding of the protocolwhich will also be renamed Sky Ecosystem, as reported by CriptoNoticias. In this way, not only a brand renewal is introduced, but also new functionalities and rewards. Sky will present new features, including improvements to the USDS savings rate and more intuitive governance mechanisms for SKY holders.
Among the new features is the ability to “freeze” with the new USDS currency. This refers to the ability to restrict or limit the use or access to certain assets or functionalities within the USDS contract. This may include the ability to temporarily block assets or transactions to comply with regulatory or security requirements.
Galaxy notes that it is not a “good example” for the rest of DeFi, probably because contrasts with the fundamental principle of decentralization and freedom that characterizes DeFiHowever, the firm considers this move understandable, given the “heavy reliance on the protocol of its regulated banking partners to access Treasury bills and other RWAs for yield.”
“In its current state, Maker is too enmeshed with these heavily regulated entities for DAI to reverse course and return to its original mission,” Galaxy says.
It is important to highlight that DAI will continue to exist for those users who prefer not to convert to USDSHowever, the firm claims that DAI was never as successful as stablecoin decentralized, and there are alternatives that offer more robust and censorship-resistant solutions in this regard.
MakerDAO’s current competitive advantage lies in the business alliances it has cultivated as part of its RWA initiativesThese alliances, with entities such as Huntington Valley Bank, SocGen and Coinbase Custody, have allowed it to establish a strong presence in the market.
Galaxy believes that MakerDAO can play a pivotal role in the future of Bitcoin-criptomonedas-finanzas-stablecoin-exchanges-prestamos/” target=”_blank” rel=”noreferrer noopener”>decentralized finance by facilitating the tokenization of assets and making DeFi more accessible to institutional and retail investors. Additionally, by establishing new governance standards, MakerDAO is positioning itself as a pioneer in the development of more efficient and democratic structures for DAOs.
In other words, MakerDAO is not only creating an innovative financial protocol, but it is also contributing to the evolution of the DeFi ecosystem as a whole.
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