- MakerDAO has upgraded DAI as USDS, adding a controversial freeze function that raises decentralization concerns.
- MKR token holders are gearing up for governance updates to strengthen the protocol.
Maker, a leading platform in decentralized finance, has recently undergone a rebranding and is now known as Sky. Alongside this change, their widely-used stablecoin, previously known as DAI, has been upgraded and rebranded as USDS. Users can upgrade from DAI or convert from USDC to NetStable at a 1:1 ratio.
Sam MacPherson, CEO of Phoenix Labs and Spark Protocol, announced that the upgraded USDS (formerly DAI) will include a freezing function, a feature already present in other centralized stablecoins like USDT and USDC. However, the introduction of this “freeze function” has sparked criticism, with concerns being raised. It is about the potential impact on the protocol’s decentralization.
The makerDAO Forum post,
“To complement NewStable, a second, purely decentralized stablecoin, called PureDai, will also be made available as an option for users who prefer the vision of pure decentralization.”
In addition to this, Rune Christensen, Co-founder of Sky (MakerDAO) said in his X post that there will be no freeze function at launch, there will just be an upgradeability. He also said that the upgrading to USDS is optional and that it is only USDS that will have a freeze function.
What is Next for makerDAO’s MKR and DAI?
MKR (Maker) and DAI are pivotal in the decentralized finance (DeFi) ecosystem. As regulatory inspection intensifies, MakerDAO is enhancing DAI’s stability by diversifying its collateral base and exploring real-world assets. The asset manager Grayscale has introduced a crypto fund for MakerDAO’s MKR.
And they issued NewGovToken and NewStable as a part of its “endgame” plan. Holders will be able to convert one MKR token for 24,000 NGT tokens. MKR token holders are preparing for governance updates, aiming to bolster the protocol’s resilience and growth.
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Source: https://thenewscrypto.com/makerdaos-freeze-function-in-upgraded-stablecoin-raises-concerns/