The leaders of Aave and MakerDAO, now known as Sky, have proposed forming an alliance aimed at improving the sustainability of decentralized finance (DeFi).
The proposal comes as the sustainability of DeFi has recently become a topic of concern, with key industry leaders addressing potential challenges to the long-term viability of the sector.
Aave to collaborate with MakerDAO
Aave network founder Stani Kulechov and MakerDAO co-founder Rune Christensen have proposed a DeFi alliance to promote wider adoption and bridge the gap between decentralized and traditional finance. According to Aave Labs, the collaboration will “supercharge DeFi.”
“Sky Aave Force, an initiative by Christensen and Kulechov, has an ambitious goal: to drive mass adoption and bridge the gap between DeFi and TradFi. Now is the time to work together,” the announcement reads.
According to Kulechov, DeFi protocols have matured, demonstrating their resilience and market readiness. This realization led to the proposal, as he believes the collaboration would position DeFi as the backbone of all finance. Kulechov expects the Sky Aave Force to provide unprecedented access and foster new use cases.
Read more: Top 11 DeFi Protocols to Watch in 2024
The latest development is notable as MakerDAO, which runs the largest decentralized stablecoin DAI, has rebranded to Sky. The rebrand also introduced a new governance token, with an exchange rate of 1 MKR equaling 24,000 SKY tokens.
This rebranding aims to foster the “next evolution of DeFi” and increase accessibility. However, the changes have raised concerns due to the introduction of restrictions such as VPN blocks and freeze features.
“Maker has gone from a decentralized stablecoin to a VPN detection API,” wrote one X user.
Nonetheless, DAI remains the largest decentralized stablecoin, distinguishing itself by allowing users to trade anonymously without intermediary censorship.
Read more: Guide to the best stablecoins in 2024
Despite DAI’s decentralized reputation, it has not been immune to abuse, as seen in the Wintermute hack, where $160 million in assets, including DAI, were transferred to Curve to avoid freezing. Christensen explained that the freezing feature in USDS is an optional upgrade. It is not enforceable out of the box and would require governance votes to be enabled.
However, the mere mention of this feature worried some users, who feared that DAI would lose its decentralized advantage and become similar to other stablecoins.
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