Maker Co-Founder Calls UST and MIM ‘Solid Ponzis’ That Will Go to Zero

Rune Christensen, 1 of the founders of Maker, the decentralized autonomous enactment down the governance of stablecoin DAI, has spoken retired against 2 competitors. He stated that UST, Terra’s dollar-pegged stablecoin, and MIM, different collateralized stablecoin, were “solid ponzis” and that the carnivore marketplace would yet pb their prices to zero.

Maker Co-Founder Calls Out Competitors

Rune Christensen, 1 of the co-founders of the enactment down the instauration and improvement of DAI, a decentralized stablecoin, has called retired 2 competitors. Christensen indicated that helium got bushed of being nagged by UST and MIM “reply guys” connected Twitter, and indicated his sentiment astir these 2 comparatively caller stablecoins, comparing them with DAI. Christensen stated:

Look, UST and MIM are coagulated ponzis and I respect that. You tin marque bully wealth disconnected them for sure. But they are not built for resilience and they are going to 0 erstwhile the marketplace turns for real.

Christensen elaborated by indicating that DAI was built for resilience portion noting that the task is the astir trustable erstwhile it comes to astute contracts and collateral security. However, UST flipped DAI arsenic the astir invaluable stablecoin task backmost successful December. Still, DAI is ranked 2nd amongst decentralized stablecoin projects by marketplace capitalization.

Engineered Differently

While MIM, UST, and DAI are each decentralized stablecoins successful name, each 1 of them is engineered differently. While DAI and MIM are collateralized stablecoins — meaning that determination are different assets backing their worth successful lawsuit of a selloff — UST is simply a axenic algorithmic stablecoin, whose peg is maintained done arbitrage incentives.

Criticism of these collateralized stablecoins has travel from the information that immoderate of the funds backing the assets are composed of centralized stablecoins. In fact, according to a graphic provided by Christensen, 37.4% of DAI generated is collateralized with USDC. However, Christensen pointed retired that MIM besides had problems successful this regard, hinting astatine the anticipation of it having a higher percent of its backing based connected centralized stablecoins.

The stablecoin assemblage grew massively past year, with USDT, the biggest stablecoin successful the market, going from a $20 cardinal marketplace headdress astatine the commencement of 2020, to a adjacent $80 cardinal capitalization starting successful 2021. But decentralized alternatives grew adjacent more, with UST multiplying its marketplace headdress by much than 50 times. In the aforesaid way, MIM has managed to scope a $4.6 cardinal capitalization since its inception past September.

What bash you deliberation astir the Maker co-founder’s statements connected UST and DAI? Tell america successful the comments conception below.

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