General Disclaimer: the following views are my own and do not necessarily reflect or represent the views or opinions of the Maker Foundation or any of its directors, executives, employees or contractors.
1. Their name
The term “real-world assets” carries a heavy assumption about what blockchain is.
We’ve all been there; acquaintances from outside crypto condescendingly asking us about these “funny internet coins” we like, wondering whether we’re gonna finally grow up and get a real job. That’s not surprising for anyone in the space anymore.
What is surprising, though, is that now we ourselves are using a term such as “real-world assets”, which reflects that same condescending attitude. If these assets are from the real world, then by implication blockchain would be the fairy-tale world, right? Let’s not buy into this narrative.
2. They’re not part of Maker’s original intent
3. Their role in maintaining the peg
RWAs were first introduced as a way to lower the price of DAI, since at the time DAI was running significantly above peg. Although we still have this problem, please note that this is a good problem to have.
It may not look like it now, but being below peg not only is a worse problem, but in some cases an insolvable one. As with any other asset, the price of DAI ultimately relies on the trust of its users. If that trust were to disappear, the demand for DAI would soon follow, as well as its price. People trust DAI because it doesn’t engage in the unreliable practices of the traditional financial system.
So while I agree that RWAs can help lower the price of DAI, I wonder if they could also help raise it.
4. The idea of breaking out of the blockchain
I recently watched Greg Di Prisco’s interview on RealVision. It’s a very good interview; Greg has a compelling way of explaining how Maker works, and also brings up interesting insights about the role of collateral in an economy. I agree with everything he says, except for the following:
This is kind of a huge moment for us; it’s when we break out of the blockchain ecosystem. Up until now, you’ve only been able to borrow against digital assets, and this was very much a proof of concept. If Maker’s ever going to serve millions of people around the world by offering them a decentralized stablecoin, it needs the credit that backs that decentralized stablecoin to be there in demand.
If you listen to the entire interview, the above statements contradict much of the rest he says. If blockchain is something we need to break out of, then why bother creating a blockchain-based system in the first place? If borrowing against on-chain assets is just a proof of concept, why not stick with traditional banks?
5. The desire to grow faster
Take a look at the growth of MCD’s market cap since its inception in november 2019. It went from zero to 2 billion in a year. Does it look like it needs to grow faster?
I don’t think so. On the contrary, I’d prefer it to grow slower.
An important argument for RWAs is that they will allow Maker to scale beyond the blockchain ecosystem. However, growing too fast is risky.
We all want Maker to change the world. I understand it can be frustrating that blockchain tech isn’t having an impact in the “real world” yet. Developing countries such as my own Colombia could benefit immensely from all the advantages of decentralization.
However, things take time. If Maker isn’t able to reach everyday people, it’s simply because crypto adoption takes time. It’s not our fault. People have a hard time changing their attitudes towards something as sensitive as money. But even if it takes a century, it doesn’t matter: we’re building something greater than ourselves.
Instead of breaking out of the blockchain into the real world, we need the real world to break out of their centralized institutions into blockchain. When that happens, blockchain is going to be the real world and it will be serving billions of users.