MakerDAO’s rebranding to Sky has raised concerns among decentralized finance (DeFi) enthusiasts, but experts suggest the move was necessary for the platform’s evolution.

On August 27, MakerDAO founder Rune Christensen announced that the DeFi platform will rebrand as Sky. The protocol’s Dai stablecoin will be upgraded to Sky Dollar (USDS), and its governance token, Maker, will transition to SKY.

A significant concern for DeFi fans is the introduction of a freeze function with the USDS stablecoin. Sean Lee, co-founder and chief strategy officer at IDA, explained that this move is more about compliance than centralization.

“If a stablecoin doesn’t have a freeze function, it will be used for illegal activities. That becomes a very big deal for anyone hoping for their stablecoin to gain the right level of adoption while staying clear of regulators’ radar,” Lee stated.

Lee added that the rebranding to Sky and the new freeze function could help USDS achieve a “global reach.”

According to Lee, the centralization of SKY and USDS would depend on how the tokens are issued, controlled, and integrated within protocols.

Earlier in May, Christensen hinted at launching a new stablecoin within the MakerDAO ecosystem, which is now USDS, and a separate fully decentralized stablecoin called PureDai. The new token will be pegged to the US dollar but will not be permanently connected to the DeFi lender.

Christensen acknowledged the challenge of balancing decentralization and regulatory compliance. He noted that PureDai would not be released anytime soon, stating that it “will be available after a few years.”

Stay updated with the latest cryptocurrency news and developments on Global Crypto News.

Post Views: 1