Rune Christensen, one of the founders of Maker, the decentralized autonomous organization behind the governance of stablecoin DAI, has spoken out against two competitors. He said UST, Terra’s dollar-pegged stable coin, and MIM, another guaranteed stable coin, were âsolid ponzisâ and that the bear market would eventually drive their prices to zero.
Maker Co-Founder Calls on Competitors
Rune Christensen, one of the co-founders of the organization behind the creation and development of DAI, a decentralized stablecoin, called two competitors. Christensen indicated that he was fed up with being harassed by UST and MIM ârespondersâ on Twitter, and expressed his opinion on these two relatively new stablecoins, comparing them with DAI. Christensen declared:
Look, UST and MIM are solid ponzis and I respect that. You can definitely make a lot of money with them. But they’re not built for resilience and they’ll go down to zero once the market turns for real.
Christensen expanded by stating that DAI was designed for resilience while noting that the project is the most reliable when it comes to smart contracts and collateral security. However, UST made DAI the most valuable stablecoin project in December. Still, DAI is ranked second among decentralized stablecoin projects by market cap.
While MIM, UST, and DAI are all decentralized stablecoins, each of them is designed differently. While DAI and MIM are guaranteed stablecoins – meaning that there are other assets that guarantee their value if sold – UST is a purely algorithmic stable coin, the anchor of which is maintained through incentives to invest. ‘arbitration.
The criticism of these guaranteed stablecoins has come from the fact that some of the funds supporting the assets are made up of centralized stablecoins. Indeed, according to a graph provided by Christensen, 37.4% of the generated DAI is guaranteed by the USDC. However, Christensen pointed out that MIM is having issues in this regard as well, hinting at the possibility that it has a higher percentage of its support based on centralized stablecoins.
The stablecoins industry experienced massive growth last year, with the USDT, the largest stablecoin in the market, growing from a market cap of $ 20 billion at the start of 2020, to a market cap of nearly $ 80 billion as of 2021. But decentralized alternatives have risen further, with UST multiplying its market cap by more than 50 times. Likewise, MIM has managed to grow to a market capitalization of $ 4.6 billion since its inception last September.
What do you think of Maker’s co-founder statements about UST and DAI? Tell us in the comments section below.
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