Advertisement
AD

Main navigation

DeFi Ecosystem in Danger Due to DAI Stablecoin Dominance, Investor Warns

Advertisement
Tue, 21/04/2020 - 13:52
DeFi Ecosystem in Danger Due to DAI Stablecoin Dominance, Investor Warns
Cover image via stock.adobe.com
Read U.TODAY on
Google News
Contents
Advertisement

As a former DAI and MakerDAO champion, Mr. Cochran has revealed three main indicators that one stablecoin poses a huge threat to the sanity of decentralized finances worldwide.

One more house of cards

According to Mr. Cochran, DeFi institutions look like a Lego made of interconnected elements with one common basic detail, the DAI stablecoin. That said, it is this stablecoin that acts as the weakest point of vulnerability.

All systems based on a single asset need to rely on the fair nature of its emission, trusted origin and proper transferring. Should the asset fail to meet these requirements, all DeFi clients would need to brace themselves for another multi-million hack. 

card

The recent dForce attack, which was caused by the vulnerability of the imBTC-ETH interaction, is a textbook example of such misconduct.

Red flags of (de-?)centralization

The modus operandi of the team behind DAI stablecoin is also alarming for the expert. He highlighted the whale-dominated structure of its token allocation, several governance failures, lack of transparency and even attempts to trademark the word ‘DeFi’.

card 

Furthermore, the shady nature of collateralization that includes assets with high volatility looks rather disturbing for Mr. Cochran. It is one more room for the manipulations, he admits. Although, he knows no alternative for DAI that is active at the moment.

Advertisement
TopCryptoNewsinYourMailbox
TopCryptoNewsinYourMailbox
Advertisement

Latest Press Releases

Our social media
There's a lot to see there, too

Popular articles

Advertisement
AD