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November 10, 2020

DeFi Convention

How MakerDAO is a decentralized project with Gregg Di Prisco


MakerDAO, which was started five years ago, runs on Ethereum. From the get-go, the team said that it has to be a multi-collateral protocol. It’s still early days for the Maker project. Gregg Di Prisco explained,

(30:14) Right now, there’s about seven different assets I think that you can generate dai against; but with the exception of the other stablecoins, almost all of them are very correlated to crypto. So bitcoin is our second largest after ether, we use wrapped BTC from Bitgo, and after that it’s a bunch of stablecoins and after that it’s a bunch of ERC-20 tokens.”

On the debate as to whether MakerDAO is a decentralized project, De Prisco said,

(32:17) – “It’s quite decentralized, I can tell you that first hand. Because a lot of the things that I want to happen, don’t happen,” said Di Prisco.

March 12 is a day that will live in infamy in the cryptocurrency markets, as not only did the BTC price crash but the market structure essentially broke.

(35:25) “If March wasn’t stressful, then i don’t want to be around,” DiPrisco said of the stress test.

(36:07) A takeaway from BitUSD was the importance of diversifying into multiple forms of collateral because by having one, you can’t simply account for all of the risk.

The DeFi space is a lot like legos, so many assets wrapped inside other assets, etc. Di Prisco explains how to understand the risk factors.

(39:21) If you went back to the Great Financial Crisis I think it really separates into two camps of people for where to point the fingers: you have people who think that it was the complexity of the products that were the problem, and people who think it was the opacity of the products that was the problem. I firmly fall into the latter camp.”

(39:42) Di Prisco goes onto explain that “complexity is only bad when it’s hidden,” adding:

(40:10 ) “In DeFi, everything is by default transparent almost to its core. That to me makes the big difference.”

DAO end users are mostly retail currently, but the credit side is institutions.

(40:40) “We, the entire Maker community, need to make our products work in a way that they can use without too much of a difference between what they do today.”

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Gerelyn Terzo
Gerelyn caught wind of bitcoin in mid-2017 and after learning about the peer-to-peer nature of Satoshi's creation has never looked back. Previously she covered institutional investing and fintech for several major trade publications. Gerelyn resides in Verona, N.J.

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