MakerDAO AMA with Wolf Crypto
We held an AMA with MakerDAO in our public Telegram channel on November 17th.
MakerDAO is a decentralized autonomous organization (DAO) that exists on the Ethereum blockchain. The platform uses a self-balancing system to create a stablecoin that avoids the regulatory issues that have hindered the success of other similar projects.
To generate and manage this system, MakerDAO currently have two tokens —
Maker (MKR) — a token used to govern the platform and pay stability fees.
Dai (DAI) — a crypto-collateralized stablecoin that is targeted to the U.S. dollar.
MakerDAO ensures the stability of the Dai through the implementation of a decentralized governance system that is conducted via the staking of maker tokens for the period of time during which a vote occurs. Additionally, the fees needed to stabilize the Dai are managed and paid through the maker token.
MakerDAO launches their Multi-Collateral Dai (MCD) on November 18.
You can also visit the MakerDAO Telegram channel or MakerDAO website for further details.
Here’s what MakerDAO’s Business Development Manager Gustav Arentoft had to say in the AMA.*
*This AMA has been edited for clarity.
WC (Wolf Crypto Telegram Member)
Welcome to another edition of Wolf Crypto AMA, this time with MakerDAO!
Joining us from the MakerDAO team is their Business Development Manager Gustav Arentoft.
Guys, the plan for this AMA is to run it as an open chat, but I do ask, keep your questions relevant to the subject we’re discussing at the time and don’t flood the chat. I want everyone to be able to have their say on this, but please be fair on other users and of course on Gustav.
This is the agenda for the AMA. I’m going to lead with questions but please feel free to chime in with related questions as we go through each section. We’ll cover any questions that don’t meet the agenda criteria at the end of the AMA.
Team & Team Goals
Tokens within the MakerDAO ecosystem
MakerDAO, Collateral & MCD
MakerDAO & Governance
MakerDAO & Partnerships
The Future of DeFi, Stablecoins and Decentralised Economies
TEAM & TEAM GOALS
WC
So Gustav, I know we’ve had you here before in an AMA with ShuttleOne, a project you’re supporting in SEA, but since this one is the first we’ve done with yourself and your project
How about giving us some background on yourself and how you became involved in MakerDAO?
GA
Sure, first off, thanks for having me Winston. It’s a pleasure to be back.
I am a guy from Denmark, who was living and working in Argentina pre and during the 2017 bullrun. I was already back then pretty affected by inflation in the local economy and due to my large interest in tech, crypto seemed like an obvious choice.
I was living with a guy who were running a mining operation and an OTC. So I was on a bit of a different side of things in terms of my personal life, but my experience in consulting financial technology products for an emerging economy gave me a good interest for the Ethereum community.
A former colleague of mine who I am also working with currently came one that and told me she got a new job which paid in Dai. This was very attractive as my salary had declined more than 50% in just 10 months due to inflation.
Within a few months I moved back to Copenhagen, and I am now running the European Business Development, as well as most of our projects in SEA and Africa.
WC
How about some of the other team members who are involved in the project?
Who’s been there from the start, who’s been added along the way, and how has the team grown as the project has grown and progressed over the years?
GA
We were founded in 2014 by Rune Christensen. He is still with us today, and was previously in the BitShares community. He is a very early crypto adopter and advocate.
We have attracted quite a few people from the traditional space since we started including Regional CFO from Maersk (the world’s largest shipping company) — Torben, and people from Google, Facebook and other major tech start-ups in the US.
We are more than a 100 people now, and with a 5 year run-time there has been some people leaving the project too.
We have people on most continents including offices in Seoul, Buenos Aires, Warsaw, Tokyo, Singapore, San Francisco, New York and our headquarters in Copenhagen.
Some of our developers come from the infamous dApphub which was the first development shop focused on dapps, and include some of the world’s leading experts in Formal Verification of Smart Contracts (the highest grade of security standard in software)
WC
How about MakerDAO in general? The project has been around for quite some time now, having been original formed in 2015 and Dai going live in 2017. This basically makes you an OG of the space.
Can you give us some background on the project, why it was formed, what’s been achieved over the years and where you’re headed?
GA
So MakerDAO was created as a direct response to some of the things being broken in traditional finance. This is probably not the first time you hear projects preach this, but this is actually the true reason. We set out to create a truly open and decentralized financial system without any bias or centralized entity controlling the parameters for any groups or parts of the system. We do truly decentralized governance and are aiming to show how the efficiency of the blockchain can change people’s lives.
We are a decentralized stablecoin which is backed by on-chain collateral. Its truly permissionless by default so there is no difference in who can interact or the parameters they are getting.
The system consists of some of the most complex smart contracts in the space which is developed by truly some of the most talented people in it too. We have always been able to attract an incredibly talented set of people to help out with the projects.
We launched the initial version of the protocol in 2017 which is SCD or Single collateral Dai. Basically allowing users to lock-up Ethereum and based on the value they lock-up can issue a line of credit in Dai.
The system has been running smoothly and maintaining a soft-peg to the USD since then.
We reached around 2% of the total Ethereum supply in our contracts at our height, and currently sits around 1,7% with 100m USD of Dai backed by almost 400m USD of collateral.
We are completely transparent in anything we do, you can check everything I say here —
or on —
We maintained stability through a drop in ETH from $1200+ to $75 USD and actually increased our market-cap the entire time.
TOKENS WITHIN THE MAKERDAO ECOSYSTEM
WC
You have a bunch of acronyms that exist within the MakerDAO ecosystem. DAI, MKR, CDP, DSR and soon MCD and SAI to name a few
Can you run us through what these terms mean and how they all work together to achieve the end goal of decentralized asset backed digital economy?
GA
Yes for sure. So SCD is Single collateral Dai the version of Dai which is only backed by one collateral type which is ETH. SCD is getting phased out as we are switching to the next version MCD (Multi Collateral Dai) launching tomorrow. MCD will give us a much more robust and much stronger version of the system where we will also implement DSR (Dai Savings Rate) Which will be an interest rate you can claim on Dai.
Sai will be the old version (SCD).
Dai will be the new version starting from tomorrow (MCD).
MKR is referring to the trading ticker of our Governance/value accruing token Maker. Its a top 25 token in terms of market cap —
CDP is the old term for our positions which will be renamed to Vault positions starting tomorrow. There is a bit of terminology changes we are doing as we are launching the full version of the protocol tomorrow. The vision of the last 5 years are finally coming true.
WC
So users can essentially hold DAI, SAI and MKR, you’ve kind of touched on it above, but why would one hold each of these tokens and what use case scenarios would each one be required?
GA
You can hold Dai and MKR permanently, Sai will be phased out over the next period of time. MCD is a reference to the entire system and not a token itself. Dai will be used as a decentralized stablecoin with all the use cases I am sure you have heard tons about (we have 400+ partners already using it) with an interest rate on it.
MKR is for the more advanced users who wants to be part of the governance process and at the same time getting revenues from the protocol. We have a buy and burn mechanism on the MKR token (one of the first, if not the first of those).
You can check our revenue on the blockchain at makerburn.com —
We are one of the only projects with verifiable revenue on the blockchain.
WC
Nice segue for me to talk about the supply on each of your tokens, as this isn’t as simplistic as some other projects.
Is there a fixed amount of any of these tokens and if not, how does supply of each token fluctuate as supply and demand grows or contracts within the MakerDAO ecosystem?
Was there a “pre-mine” for any of your tokens?
GA
Yes sure, so the MKR token was pre-mined at a 1m which have been sold off to private investors (we never did an ICO, as it seemed too risky to do for a variety of reasons).
The supply is changing in two scenarios. Either it gets burned because the revenue of the system comes back from successful CDP’s/lines of credit. It can also be minted to make up for deficits in the system, this is to ensure the stability of Dai. We haven’t seen this happen yet, but it is to be expected when we are looking to on-board 1000+ types of collateral.
The system will easily be able to absorb losses at that point too and still provide a robust burn. Dai is fluctuating and can only be issued against collateral. We are a guaranteed over collateralised stablecoin where you can check the collateral ratios at all times (at https://mkr.tools).
WC
So the supply can be higher than the originally minted 1m MKR?
GA
If the governance adopts bad collateral which ends up defaulting, theoretically yes.
However, it can ONLY increase based on the outcome of the stability of the system. Therefore, there is a strong economic incentive to only adopt and use quality collateral.
WC
So what you’re saying is that is less likely than likely?
GA
Yes, it is only if people miss manage the system.
However so far the governance has been very successful, and proving one of the only recurring on-chain governance as a success.
WC
How much of the 1M MKR does the team control?
GA
We still hold 25% of the supply with a plan for selling it off over the next 2 years. We won’t dump anything on the market, but have done private sales to some very well known VC’s like Andreessen Horowitz.
We have plans for distributing some to the community too, all of this will be made publicly when ready. We have been very focused on building products and haven’t spent a lot of time on marketing.
WC
What is the revenue stream for Maker outside of selling off those tokens OTC?
GA
None, the goal for the foundation team of Maker is actually to branch out when we run out of cash to build private projects in the ecosystem.
A protocol can only truly become decentralized if there is no team controlling it.
MAKERDAO, COLLATERAL & MCD
WC
Now that you’re moving over to MCD that supports other collateral past ETH, do you have a process going forward to assess the quality of the collateral that will be accepted?
GA
Yes we have a very complex on-boarding process and you can already see some of the first projects going through it on —
WC
Excellent. Keep it as high as possible.
As we know from 2008 any ‘pooled/collateralised’ lending pool is only as good as the toxic layer.
GA
We do public application -> due diligence / community assessment -> polling -> risk assessment -> Execute vote -> implementation.
WC
On this point and this is getting a little ahead of ourselves as I’d like to talk more about general collateral on Maker before going into MCD, but with MCD being introduced being backed by other crypto assets past ETH, how will volatility be managed there?
As much as we talk about ETH’s volatility, it’s still a top two cap coin, and as such, in theory should be less volatile than a bunch of shitcoins right?
I mean just cause you bundle a bunch of shitcoins together, that doesn’t make them any less volatile does it?
Reminds me of Wall St and all their Big Short bundling 😉
GA
Sure, completely agreed here.
We are currently assessing a pool of different crypto collateral's. Depending on their market cap, liquidity and volume we will give them different risk parameters.
Meaning that they will have corresponding collateral ratios and interest rates. They will also have different debt ceilings. So let’s say BAT for example will have a max cap of $10m USD.
WC
Does that work as a collective or a singular or both?
GA
All 3 of them will be done for each respective collateral.
Our system has shown itself quite efficient in being able to liquidate positions, but we need to make sure that there is a market to liquidate the asset in. Initially it will be other top coins.
WC
Do you have an arbitrary threshold for that at the moment?
Something along the lines of top 50/top 100, or is it more nuanced than that?
GA
It will be done by community voting, and only projects which is compatible with our Ethereum smart contracts.
WC
Why was BAT added as the first collateral on MCD?
Seemed like a really random choice considering whats out there…
GA
So when we started the first tests with MCD like 2 years ago. Our developers just took the top 12 ERC20 tokens by market-cap and build the technical adaptors for them.
BAT was one of them, and the community voted it in.
WC
So when the MCD migration happens, will users need to close open CDP’s?
GA
Yes, they will need to pay their stability fees and migrate them to MCD. It’s a pretty big process to migrate a 400m + system, so it will take some time. My estimate is a few months. Our integrations team has been working OVERTIME.
WC
Also on the same topic, how about DAI hodlers?
They can keep holding or do they also need to migrate to SAI?
GA
They need to Migrate Sai to Dai, that is easier though, you just need to send the tokens to the migration contract and it will send you the new tokens back.
This is the “layman” migration guide —
WC
Will exchanges be changing the tickers over as of tomorrow?
GA
Yes, all the exchanges we work with are migrating within a short period. Announcements have come from both Upbit, Coinbase, Kraken and several of the other major exchanges we are currently trading at.
We have worked the last several months with a team dedicated to migrating our partners.
WC
Is there a cut off period for this?
GA
If you wait long enough then after Global settlement your Sai will become 1 USD worth of ETH exposure. As in an emergency shutdown you can claim 1 USD worth of collateral.
WC
How is the swap done on DEX’s as I get CEXs will be quite easy to implement?
GA
We have several ways to do it with the DEX’s.
We have the second biggest liquidity of Dai on our own Dex — Oasis, on there we have a Pair which automatically can swap it for you.
WC
Speaking of liquidity, this was something that came up in the Reserve AMA recently.
Can you buy large amounts of DAI without large amounts of slippage?
Assume you can’t do that through the DEX and it would more so be an OTC thing?
GA
With any stablecoin you will receive slippage trying to buy large amounts on open markets. Larger amounts would always be done via OTC. We ourselves have an entity doing OTC. We are providing liquidity to our partners without any problems with very low slippage.
WC
So how about creating DAI?
This is minted on the CDP portal on demand right?
GA
Yes, that’s exactly right, Dai is always created when people lock-up collateral and print it against it.
So we basically allow people to be their own “bank” and print Dai against their own assets paying a fee to the system to ensure stability.
WC
I have a question on minting DAI and locking up ETH for CDP’s…
We spoke a bit before about a black swan event where ETH price crashes and breaks the system, to the same extent, there’s something called a positive ETH feedback loop, kind of the opposite of the black swan event we just described, where if ETH rises significantly in value, users can essentially double down on their ETH position by using a 200% collateralisation ratio, waiting for ETH to appreciate and then draw more DAI from the CDP.
The question here is, does this pose a similar risk as an ETH black swan event in which the system can break as a result of too much DAI either being minted, or users earning it from the CDP and selling it (forcing the DAI price down)?
GA
This is actually something which we have seen a lot of already. At one point our interest rates shut up from 0,5–20% over a short period of time to enforce stability and decentivize people minting more Dai as a way to leverage ETH. This happened in February-May when ETH went up from 70–250+.
This has actually been more of an “issue” to the system than ETH dropping.
It was a result of basically two things. The first one is fairly obvious with us only having one volatile collateral type where the price of our interest rates were basically the price of people’s desires to leverage ETH.
The second one is because we only had one “lever” in regards to stability. We only had the ability to incentivise or deincentivise the supply side. Starting tomorrow Dai will have an interest rate as a natural part of the system. Thereby, we have a way of influencing the demand of Dai.
This will make it much easier for us to deal with that specific situation as we can always just turn up the interest rate and increase the demand for holding Dai.
Impressed by your homework Winston, not a lot of people catches that part of the system as a risk vector.
WC
Another great segue…talk us through how the introduction of MCD also introduces the DSR and how users can now earn interest on simply holding DAI without a collateralised position?
Rune says this is “risk-free … at the protocol level”, that sounds almost too good to be true…
Seems like a more risk free way of longing ETH if you can be bothered jumping through the hoops.
GA
Yes, so it’s basically us taking a part of the fees used for MKR burn and giving it to people holding DAI.
They need to use a pull version where they lock-up DAI.
So in that sense it will be risk free from the protocol. If the protocol itself fails Dai is done anyways.
We are seeing massive interest to implement this everywhere from Wallets, apps, dapps and exchanges.
WC
By giving users the ability to earn DAI just by holding DAI, do you see this having an impact on CDP’s?
Isn’t the DSR far less risky than CDP?
Is more locked DAI a good thing for you guys in that respect?
GA
Yes for sure. Let’s say we have 100m USD of Dai demand now, and there would be 50m USD in DSR. That basically means that we have an excess of 50m USD of Dai we could incentivise people to issue via super cheap raates, and thereby scaling the system.
The DSR is what’s going to give us the ability to scale together with legacy world collateral.
Hopefully these two things will counter the famous Reserve article about Maker 😉
WC
Legacy world collateral is such interesting terminology, while MCD is a super interesting addition to Maker, what about real world assets?
I have to say this is one of the things I really like about the Reserve project…
Are there any plans in Maker’s future for something similar?
A USD peg is so passe 😉
GA
Ahh, yes, all of those things have been on the roadmap since 2015. It was mentioned in the early forum posts and initial versions of the whitepaper.
However, doing these things in a decentralized manner is very difficult, so we have been working years on the right frameworks and models to get it right.
Some of the super interesting things are some of the stuff we are doing with Centrifuge —
WC
Who are Centrifuge?
GA
They are a company from Germany with whom we have been tokenizing debt instruments to add as collateral for MCD. Such as Invoices, Music Royalties, mortgages and other types of receivables.
WC
Non-fungible real-world assets, that’s the buzz word i was looking for…I do like your term better though 😉
GA
Yes exactly haha 😄 Legacyyyy….
So basically we are looking to unlock liquidity for tons of awesome collateral types. Allowing them to print Dai on predefined terms after they have completed the strict on-boarding process.
SME’s is a very important field, we are a bit different from Reserve in that sense. They are using a common collateral pool only for the purpose of a stable digital representation. We are using it as a way for people to access liquidity against the underlying asset types.
We are more a permissionless lending protocol, rather than just a deposit vault.
(Nothing bad against Reserve though, I hope they will succeed with what they are doing in Venezuella. As someone who lived in LATAM for a while with friends from there I am rooting for them)
MAKERDAO & GOVERNANCE
WC
Since MKR gives voting rights on the platform and you’re ideally a decentralised governance platform…
We touched on supply previously, but one thing that always comes up with decentralised platforms that use tokens for governance is the distribution of said tokens.
To play devil’s advocate, if I owned a large portion of the overall MKR supply, and that token is used to vote on the platform, I could be the one that dictates the direction of the platform and the success or failure of any proposals that were put up for a vote.
With that in mind, exactly how decentralised is the token ownership of MKR? It’s not just Rune sitting on a fat stack of MRK, dictating the votes and giving other holders the illusion of democracy and decentralisation?
I guess to use a real world example, if I’m a fund that owns a stack of MKR, could use that to vote a shitcoin my fund has now invested in onto MCD?
GA
We have a pretty average distribution. Rune holds around 10%. There are measures in place to make sure that people acting maliciously in the system can be excluded, it’s called the emergency shutdown.
It’s a way for a minority vote to fork the system and thereby exclude that voter.
Our governance process is much more than just the executive vote. It is a tight and strong due diligence on the forums forum.makerdao.com, then there is our weekly governance call which is where everyone can join and chime in on their opinions no matter Maker holding.
After that there is Polling which is where you can signal support and then finally the executive vote.
WC
How many MKR is require to be involved in a vote?
GA
No minimum.
WC
So 1 MKR = 1 vote?
Each of those votes below is 1 MKR?
GA
Yes.
WC
So Rune alone has 15M USD in MKR which can be put towards influencing votes.
Sounds like Rune is doing ok for himself 😂
GA
He has around 60m USD in MKR. He is unable to vote due to contractual agreements with several investors.
All early team members of Maker are doing pretty well lol…
WC
You keep queuing me up for these segues 😉
Like Reserve you have an emergency shutdown functionality built into the protocol. In what scenario would this emergency shutdown procedure be enacted and how would this actually be initiated in practice?
GA
So even if you hold a fat stack of MKR you need to pass the community on several fronts to get what you want. So up until now they needed to execute a vote, but tomorrow you can do it with a minority vote.
What actually happens is that you see an attack on the system. You will then mobilize people to send their MKR to the EMS contract. All the MKR sent here will get burned. When the contract hits 50k MKR / 5% it will shutdown the system and a reboot will need to get initiated. Its a check so even if people accumulates enough power to act out of order then you can still put them out.
If the community then recognizes that the reboot was good that will get them to recredit your MKR.
WC
How does a reboot work?
Rune has to go to the MKR server room and hit the button?
GA
There are several teams working on several parts of the system. These are called DAO teams.
They are working with Oracles, contracts etc. They will need to work together in the reboot.
WC
So on governance, participation is quite low according to a recent article under 10% of the supply participate in governance decisions with an average of less than 100 individual voters.
How do you plan to increase voting?
GA
So far people have been voting only for interest hikes which has been very obvious.
You know, look at dai.stablecoin.science.
If DAI is slightly above the peg vote less fees and if it’s below the peg vote for higher fees.
That has been pretty dull and obvious and without much incentive.
WC
Can you give us an example of a recent vote?
GA
We just voted this weekend for the upgrade.
WC
What about a more standard vote?
Is it generally just based around the peg?
GA
So far yes, in the future it will be about a lot of other things such as new collateral types and spending funds on other ecosystem projects.
The system works in the way that a proposal only becomes active if it gains more votes than the previous active proposal.
So you can’t vote something in without there being more support than the one before.
WC
Voting seems like a somewhat technical process, will it be possible for delegated voting to be implemented in the future and is this something that is currently being worked on?
GA
We are working on that yes, and we actually already had some people proclaiming themselves as Maker politicians.
WC
Will they accept ‘brown paper bag’ payments in MKR?
GA
The good thing about delegated voting is that if your guy doesn’t vote the way you want, you can immediately withdraw and give it to someone else.
No need to wait 4 years for another sitting term lol.
WC
How is delegating your votes encouraged, are there any rewards for doing so?
GA
Just that the system will be governed in the best way, which would mean the most value in the protocol.
WC
How do you stop these politicians from offering bribes to get votes and in that way pushing their own agenda which may or may not be good for the network?
Do not understand how it would increase participation, but it sure makes it easier to manipulate decisions.
GA
That is something which would be covered by the Emergency Shutdown exclusion if it came such a big problem.
The problems with participation currently is that its expensive in gas, frequent and you need to absorb tons of information every week (8–10 hours monthly) to be up to speed with everything.
Therefore people who don’t spend the time on all of this feel like their vote is not good enough as they don’t know everything, however, there are trusted community members such as for example —
or
WC
Have you considered implementing a system where people are rewarded or punished in monetary form for positive or negative impacts on the protocol?
GA
It would be too complicated I believe.
WC
How about something to dissuade people from constantly suggesting ‘troll’ suggestions (e.g. raise the interest rate by 1000%)…
GA
If you “troll” you can get your tokens burned. so its really not desireable, in case of emergency shutdown.
WC
So you’d burn $650 odd USD on a single vote?
GA
No, of course not, it can only get burned in case of a Emergency shutdown enacted.
So far we haven’t seen any malicious voting. If it happens we will take a stance against it
WC
So no emergency shutdowns thus far?
GA
Haha nope, but we are doing one when Sai shuts down to close the system and migrate the last bits to MCD.
Emergency shutdown is mostly a game theoretical aspect to the system and is never desirable to enact.
WC
So how does the Maker Ecosystem Foundation Structure impact governance on the platform?
Does having a central board, like a standard corporation would have, take away from the decentralised nature of the project at all?
GA
So we are a centralized foundation pushing a decentralized protocol, however exactly what you are mentioning here is why we need to dissolve the foundation eventually. Branch out and let the protocol be decentralized and seperate, while allowing private companies to flourish in the ecosystem as we have seen happen so far.
WC
So currently can anyone propose a vote on MakerDAO or can proposals only be initiated from the Foundation itself?
GA
So far we have initiated a lot of the proposals, but anyone can issue polls which then gets turned into real proposals.
The proposals are usually an offspring from our weekly governance calls.
WC
You’re doing weekly/monthly calls re governance aren’t you?
Anyone can join these? If so, how?
GA
Weekly. Every Thursday at 5pm CEST.
WC
Ok, so explain to me this, you use the term executive voting in your docs, how is this different to normal voting or issuing polls?
GA
So polling is just a signal to if its something the community wants.
Executive vote is the binding vote which executes the action on-chain.
MAKERDAO & PARTNERSHIPS
WC
Do you think it will be best if both product and marketing can go hand in hand ?
Where is the biggest market for MakerDAO?
GA
We have more than 400 projects who have integrated Dai into their system. We have focused on results and building our protocol. Marketing has come as a side bonus to that. We will start doing a bigger push when our full version launches tomorrow (November 18th) as that is when we become scaleable.
We have strong markets in China, USA, Germany, Korea.
Also Argentina has been a big success story for us being mentioned in several national media, and working with some strong partners there. Our team has been doing an awesome job. You can watch Mariano Contis presentation about how he has been living in Buenos Aires on crypto since 2013.
WC
You mentioned before you have 400+ companies/projects that have integrated DAI/Maker protocol.
I know a couple of good friends in this group, being ShuttleOne and InstaDapp are a couple of those.
Can you give us a few of the ones that you find to be the most exciting or interesting use cases?
Would be nice to hear about some crypto projects as well as “real world” businesses using the protocls too, something outside of pure crypto.
GA
Sure, we have some super interesting stuff going on in a variety of sectors. We work with Opera (the browser) on getting Dai available to more people in Africa. Also working with CoinDirect as the on/off ramp partner in Africa for that one.
There are AirTM in South America together with Ripio.
We have tons of articles written about us in Spanish towards that region.
In SEA we have Shuttle One as you mentioned, also Mosendo is launching a global Venmo using only Dai.
Here are some good articles on what we are doing on that front —
WC
You mentioned before about how you’d be branching out and building your own products, or giving users the ability to vote on products built by your team, how will this fit in with ones you’re already supporting?
You’re not going to undercut them/build a better version of their apps? 😉
GA
Haha, they will all have a headstart now right 😉
But no, we will build things and tools we feel are missing or not sufficiently represented.
THE FUTURE OF DEFI, STABLECOINS & DECENTRALISED ECONOMIES
WC
I want to quiz you on your thoughts on other stablecoin projects. It would be hard to start this part of the conversation without asking your opinion on other stablecoins, most notably, USDT.
One could argue that the “killer app” of crypto over the past few years has been stablecoins and with USDT’s position as a top five coin via market cap, and an almost constant positions as the top two traded coin, it would be hard to argue that it is not currently the leading stablecoin within the crypto ecosystem.
What’s your general thoughts on USDT, the competitive advantage that the various DAO assets have over USDT and how you see its market position and capitalisation changing over time?
GA
I believe that we are working on very different use cases. USDT is great for the purpose of trading, but its not something I would recommend people saving their funds in. I wouldn’t recommend that with any of the centralized coins without an interest rate. It feels like the traditional system in a different package without the deposit rate you get at your bank (I know USDC just implemented it for Americans).
Where we believe that the stable asset which will be the most useful for people having economic stability will be the one which can not only be stable, but also provide you a truly trustless, decentralized and interest bearing asset.
I believe that there are space for lots of different stablecoins out there, however, I don’t see how any of them will be able to compete with Dai when the DSR comes out.
There is also a reason why Dai is leading the DeFi markets by a ton —
WC
Some of the biggest news in the space over the past six months as been around Facebook’s Libra, China’s digital Yuan and Binance’s “Project Venus”.
How do entrants such as these to the crypto and stablecoin space effect MakerDAO?
Are they validation or a threat to the MakerDAO business model?
GA
I think that Libra is closer to some of our more centralized counterparts.
WC
Gustav having had you recently join us as part of the Reserve AMA (another stablecoin project for those who aren’t aware), it would be remiss of me not to ask your opinions on that project.
I know you touched on them briefly before but, they’ve been quite vocal on MakerDAO and some of the perceived shortcomings of the project. What’s your reaction to this feedback and general opinion on the project itself?
GA
I think that their article was purely based on the Single Collateral version of Maker, which I don’t believe is the way to assess us. Maker has been a vision for 5 years were the goal all along was to release MCD with the DSR multi collateral backed stablecoin with an interest rate. Not a crypto collateralised coin based purely on arbitrage.
We have been successful with what we had.
I think Reserve is coming from the right place, and I believe some of the things they are doing might work such as the pilot they are doing in Venezuela.
And I hope to follow them over time, as they might have found out by now, then some things take a bit longer and some things are a bit more difficult than what you would anticipate.
I know they had multiple iterations of what they are coming out with and several delays.
WC
Time for them to update the article post MCD in your opinion then?
GA
haha, I wouldn’t recommend anyone writing long articles as to why your competitors are worse than you.
WC
So we won’t see one from you on other stablecoins then? 😉
GA
Definitely not 😄 I don’t believe that is a productive use of anyone's time, neither mine or the readers reading my biased opinionated article.
(Maker’s Dai is the best stablecoin btw).
WC
Do you think the pilot for RSR in Venezuela is better served for RSR or it could also be achieved via Maker?
GA
We already do quite a bit in Venezuela and I believe Dai with DSR is stronger for that use case.
WC
You mentioned SME being very important for Maker, how about the “unbanked” the previous buzzword of crypto before DeFi?
GA
So, the unbanked is a word which is being used a lot for sure. I like better underserved, because currently there just are large groups of people who arent served because its not profitable by banks or because their local systems are unsustainable and unstable.
We can now with just a 30 second set-up and a download give people banking and savings services only known to the top end of society before. This is where we are focusing some of our energy.
The big difference on that front is that we really incentivise and mobilize local entrepeneurs to build new products and services on top of our system, we dont sit in Denmark or San Francisco to build a product for an emerging economy which we dont understand. Shuttle One is a good example of this.
This is the ay that we believe we can truly reach critical mass in tons of different emerging markets at the same time.
We also have a very good grants program, helping these entrepreneurs start out, we have almost $1m USD given out and will continue to allocate more and more resources to our ecosystem development
CLOSING THOUGHTS
WC
Before we go, can you give us some numbers as to the community size of MakerDAO?
The project is that old that you kind of missed the latest wave of crypto social media…
GA
We have 200k+ active Dai Addresses (self custody), minimum the same from what we know of custodial usage and almost 100k CDP’s opened up.
We have 33.2K members on Twitter, 3k on Telegram, 10k on Reddit and 9k on makerdao.chat.com.
400+ projects that uses Dai already, 200+ in the pipeline.
15,7k MKR token holders…
WC
Ok on that note, lets wrap it up, sounds like its a big day at “the office” for you tomorrow with the MCD release.
Thanks so much for your time today Gustav.
GA
Thanks a lot for having me!
MakerDAO Resources
Website: https://makerdao.com
Telegram: https://t.me/makerdaoOfficial
Blog: https://blog.makerdao.com
Github: https://github.com/makerdao
Whitepaper: https://makerdao.com/en/whitepaper
Wolf Crypto Resources
Public Group: https://t.me/WolfCryptoPub
News Channel: https://t.me/WolfCryptoAnnounce
Twitter: https://twitter.com/WolfCryptoGroup
