Hexonaut is the Makerdao protocol engineer and the co-founder and CEO of Bellwood Studios software and design. He announced that Makerdao would be using real world assets to help scale its decentralized finance (defi), protocol Makerdao. Hexonaut insists the bull market was good, but “the time is passing” and he believes Makerdao needs “to take the next step and begin integrating with the real world at scale.”
Makerdao Community proposal discusses integration of real world assets into the CDP Equation
Makerdao’s software engineer has an idea. He believes it will revive the decentralized finance protocol. Makerdao can be described as a protocol or collateralized debt position (CDP) that oversees the issue of stablecoin DAI. Data from defillama.com shows that there are approximately 31 CDPs. Makerdao, however, is the most valuable in terms of total locked value (TVL) across all blockchains. Makerdao’s TVL is $16.15 million, an increase of 6.99% in the past seven days.
Curve Finance has Makerdao as its second-largest protocol for defi. This is based on the amount of defi value currently locked. Makerdao’s DAI stablecoin is the fifth-largest stablecoin in terms of market valuation, with $9.5 billion. DAI has recently been overtaken by the stablecoin UST issued on Terra’s network, as UST now has a valuation of around $15.4 billion. Makerdao Protocol Engineer was recently appointed. Hexonaut revealed an idea that proposes to introduce real world assets (RWAs) into Makerdao’s CDP scheme. Hexonaut explained that a “short-term crutch” was when the project leveraged centralized stablecoins like USDC.
It’s time for the Maker protocol to take bold action and seed the next phase of DeFi.
We have all been blessed by the bull market, but it’s over. Now is the time for us to go the next level and start integrating the real world on a large scale.
Here’s how we do it 🧵👇 pic.twitter.com/W3LELDMwY6
— hexonaut.eth | 🪱🕳ing (@hexonaut) March 16, 2022
However, Hexonaut’s proposal stresses that crypto-native yields have dried up liquidity, and he thinks the project should “expand to uncorrelated, quality loans to diversify the portfolio with productive assets again.” The protocol engineer also published a Makerdao governance proposal the same day, with other contributors, in a post called the “Aggressive Growth Strategy.” In the proposal, Hexonaut details that he thinks it’s inevitable that the project will rely on RWAs. Hexonaut proposes a two-step plan which involves a capital raise and taking risk-on exposure “conservatively.”
The developer believes it’s the right time for Makerdao to leverage RWAs as a number of competitor protocols have focused on bridging RWAs. Hexonaut’s proposal states:
It is time to accelerate the RWA initiative. We have made our best efforts to scale up the existing pool of borrowers, but there are many off-chain parties and protocols that have also emerged in the last year to spearhead the effort to integrate RWAs into cryptocurrency.
Some Makerdao Supporters Loved Hexonaut’s Proposal, While Others Called It a ‘Terrible Idea’
The comments that followed Hexonaut’s proposal show that some people thought adding RWAs had pros and cons. One user named Psychonaut said that he loved the idea of “raising the surplus buffer by selling bond-style investments.”
“I actually brought this up on Discord two days ago. However, I like your model better than a traditional bond structure,” Psychonaut added. On Twitter, however, Hexonaut’s proposal received criticism.
“This is a terrible idea,” a Twitter user named Foobar said. “Complexity is a bug, not a feature. DAI must be able to function on its own without any real-world risks. If you like RWA, great. Go build a RWA protocol.” Another Twitter user sarcastically tweeted: “Holy sh**. Real-world assets can be instantly frozen by Maker [the] government and confiscated forever.”
What do you think about Hexonaut’s Makerdao proposal and the idea to use real-world assets (RWAs)? Comment below and let us know how you feel about the subject.
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