Maker Introduces Remote Coin Freeze Function, Rebrands DAI as USDS

Maker, the organization that has been issuing so-called stablecoin DAI since December 2017, has decided to introduce the ability to remotely freeze some of its stablecoins.

Maker, the organization behind the DAI stablecoin, has announced plans to introduce a remote freeze function for some of its stablecoins.

The move comes as Maker, which has long touted DAI’s decentralization, now describes the stablecoin as “A better, smarter currency” on its homepage.

The organization is introducing a new stablecoin called USDS, which will have the ability to be remotely frozen by Maker insiders.

According to Maker insiders, the intention is to activate the remote freeze function, but the exact timeline for activating it on-chain might be months or even years.

Maker has distinguished itself from centralized stablecoin issuers like Tether, which openly admits its ability to remotely freeze coins.

Despite Tether’s USDT stablecoin existing on blockchains like Ethereum or Solana and generally trading for $1 apiece, Tether executives have the discretion to devalue the backing of particular USDT to $0 no matter where they are circulating in the world.

As part of the changes, Maker is keeping certain DAI tokens circulating that don’t have the ability for a remote freeze function.

At the same time, it’s rebranding DAI entirely and emphasizing its new stablecoin, USDS.

During a phase-out period that is presently underway, Maker will enforce a 1:1 convertibility peg between DAI and USDS.

Additionally, it’s incentivizing users to leave DAI for USDS with a suite of financial rewards at Sky.money, its new application for “native token rewards.”

Rune Christensen, founder and leader of Maker, assures his fans that all of these changes will attract vast sums of capital to Maker that will somehow, in his view, match Tether’s reserves within three years.

A better, smarter currency — with a remote freeze button

Crypto veterans immediately criticized Maker for introducing its remote coin freeze capability, claiming it simply allows executives to comply with international banking regulations — anathema to the crypto ethos.

Indeed, Maker backs its stablecoins with many real-world assets, including instruments benefiting from the yield of US treasuries.

The reality is, if you want T-bill yield backing, even by secondary treasury deals, you’re going to have a freeze function, and a VPN jurisdiction blocker.

A trade off this industry needs to decide on, because you can’t reap the benefits of the US tradfi system without its rule… https://t.co/oeLWJmmuAZ

All of these changes follow Christensen’s occasionally bizarre string of promises to ultimately make DAI a non-stablecoin for the benefit of the world.

He has promised to tackle climate change, use AI to govern Maker, abandon Ethereum for Solana’s blockchain, introduce “metaDAOs” or “subDAOs,” and abandon seven years of DAI’s $1 peg entirely for a free-floating exchange rate.

As a waypoint along this circuitous path toward whatever future Maker is heading toward, Christensen is putting financial incentives on USDS to encourage DAI holders to convert to USDS — with its remote coin freeze ability — and SKY.