MakerDAO founder discusses measures taken to prevent future protocol failures

Rune Christensen, the founder of MakerDAO, explained the measures taken by the company to prevent future failures in Maker’s protocol. He also predicted a possible merger of DeFi and centralized finance. 

To ensure that the Black Thursday meltdown does not happen again, Maker’s governance has addressed the bug that allowed some users to win liquidation auctions posting 0 DAI in return. Christensen explained that the auction’s bid duration had been extended to six hours. This means that the participants of the auction will have additional time to make their bids during network congestion. These changes are expected to stop auctions with zero bids from happening. 

Christensen said that adopting USDC as additional collateral will reduce the system’s dependence on Ethereum fluctuations and make it more stable. 

Even if people are not willing to generate DAI with Ethereum during a crash like this, they'll still be willing to generally DAI with UCSC because it's not exposed to the same correlated risk.

In response to criticism around USDC adoption risks, Christensen said that adding more collateral types based on real-world assets is crucial in maintaining the stability of the MakerDAO protocol.

You can't just rely on decentralized assets that all have essentially the same business models which used to be to run on a blockchain transaction network.

He added that the final goal is onboarding “thousands of real assets that all have different custodians with different security models and then are based in different jurisdictions so that you're not too exposed to one particular political or legal system”.

Research company Credmark had earlier reported that DeFi lending is a small niche within a market that’s mainly overshadowed by centralized lending platforms. Commenting on this, Christensen said that “it is still the very early days” for DeFi. According to him, DeFi will eventually merge with centralized finance.

What's currently known as CIFi will become the front end and sort of the access points to the various DeFI protocols (...) You will have a custodian that you trust and then that custodian interacts with the DeFi protocols for you.