New Data Shows 40% of MakerDAO's DAI Stablecoin Is Backed by Centralized Assets

New data interpretation from The Block shows that centralized assets comprise 40% of the collateral locked in MakerDAO.

New data interpretation from The Block shows that centralized assets comprise 40% of the collateral locked in MakerDAO.

MakerDAO is a protocol enabling users to generate DAI, a synthetic stablecoin previously solely backed by ether. In November 2019, MakerDAO migrated to a Multi-Collateral Dai system, allowing multiple collaterals to back DAI. The Block’s research shows that 40% of DAI appears to have centralized collateral backing them.

Some of the centralized assets backing DAI include USDC, backed by a firm named Centre, and the BitGo issued and custodied ERC20 token WBTC. TrustToken maintains TUSD and Paxos created the Paxos Standard (PAX). These four centralized assets compose 39.27% of the MakerDAO vault.

Others have noted that containing 40% of a centralized token puts Maker in a precarious situation. Sebastian Burgel, founder of Web3 privacy project HOPR, said on Twitter “How long would it take to wipe out these 40% via court order if I'd have evidence and a good case (financing of terrorism/climate change research or whatever Uncle Sam doesn't fancy these days)?”

Editor's Note: This report has been corrected to properly attribute Sebastian Burgel's current title.

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