Rune Christensen, a co-founder of MakerDAO, intends to exchange up to $3.5 billion in USDC for Ethereum, a move that would cause the DAI stablecoin to lose its peg to the dollar.
Data from Daistats shows that USDC, Circle’s stablecoin, backs 32% of DAI. That is around the same as $3.5 billion. It is the main collateral asset supporting DAI.
Christensen, though, wants a portion of that collateral “uprooted” from the $10.8 billion cryptocurrency treasury held by the DeFi lender. He would rather it be turned into Ethereum.
According to statements on MakerDAO’s Discord channel, the founder is concerned about the possibility of contagion after the sanctioning of cryptocurrency mixing provider Tornado Cash this week.
He stated:
“I have been doing more research into the consequences of the Tornado Cash sanction and, unfortunately, it is a lot more serious than I first thought. It is obviously suicide to ‘yolo’ it all, but the risk/reward of partial uprooting may be acceptable. The market may finally start to reward decentralization to the point where these risks are acceptable because USDC is no longer the no-brainer it used to be.”
The revelation caused the MKR token from MakerDAO to drop 4%, to $1,068. Year to date, the asset has decreased by more than 50%.