MakerDAO wants to be compliant rather than centralized

While MakerDAO’s rebranding as Sky may worry fans of decentralized finance, experts argue that the move is necessary for the platform.

MakerDAO founder Rune Christensen announced on Aug. 27 that the DeFi platform will be rebranded as Sky. The protocol’s Dai (DAI) stablecoin will be upgraded to Sky Dollar (USDS) and its governance token Maker (MKR) will be transitioned to SKY.

One thing that worries DeFi fans is the freeze function that comes with the USDS stablecoin.

“It’s less about decentralization and more about compliance,” Sean Lee, co-founder and chief strategy officer of IDA, told crypto.news.

Noting that his company also plans to issue a Hong Kong-regulated stablecoin, Lee says that if a stablecoin does not have a freezing function, it will be used in illegal activities.

“This becomes a huge problem for anyone who hopes their stablecoin will gain sufficient user adoption but also wants to stay off the radar of regulators.”

Lee added.

USDS’ rebranding as Sky, with its new freeze function, could help the company have a “global reach.”

Less believes that the centralization of SKY and USDS will depend on how the tokens are issued, how they are controlled, and how they “work within the protocols.”

Christensen hinted at launching a new stablecoin for the MakerDAO ecosystem in May, now USDS, and a separate stablecoin called PureDai that will be fully decentralized. The new token will be pegged to the US dollar, but will not be permanently tied to the DeFi lender.

Reconciling two opposing paths for Decentralized Stablecoins

From the moment Dai began to grow up, he moved back and forth between two worlds.

One world is the pure decentralization culture introduced by Bitcoin. The other is the desire to fulfill the original purpose of Dai,…

— Rune (@RuneKek) May 15, 2024

However, Christensen said that PureDai is not expected to be launched anytime soon, with the stablecoin expected to be launched “a few years from now.”