Rune Christensen, the founder of MakerDAO outlined in an essay that he published the measures that were possible in the protocol to address climate change. MakerDAO issues Dai. Dai is the world’s first stablecoin on the Ethereum blockchain. It helps remove volatility using a system of smart contracts. The system is designed to respond to the dynamics of the market.
Addressing MakerDAO’s governance forum, Christensen exhorted MakerDAO to work towards making all its collateral comprise assets that are sustainable and climate-friendly. Christensen emphasized that the assets should take into account future impact on the environment arising out of financial activity.
Way Forward
Sustainability could be achieved, Christensen opines, by ensuring that the protocol’s collateral is invested in sustainable real-world assets (RWAs). This can be done by having senior credit positions in renewable energy solutions such as solar energy installations, batteries, wind farms, etc. Senior credit positions can also be held in renewable energy supply chains and in sustainable extraction of resources and their recycling.
Christensen reiterated the requirement of MakerDAO to commit to the decentralization of collateral. He recommends the protocol’s reversion to the Ethereum network and the ETH token.
The users of MakerDAO, use the protocol to deposit their assets as collateral. The DAI stablecoin is minted against the collateral. The protocol, initially, only supported ETH but now supports USDC, wrapped bitcoin, and also the basic attention token.
Christensen stressed that better environmental efficiency would accrue from Ethereum’s proposed move to ETH2. Christensen believes that after the upgrade is completed, Ethereum blockchain will be extremely energy efficient. ETH will then be a strong competition to Bitcoin’s present position as the dominant cryptocurrency.
