Ross makes a great point in this piece.

My concept of DAI is that it was an interesting project, but the main goal was to bring fundamental value to the ETH cryptocurrency.

They want to construct a narrative of “DeFi” being so valuable that the price of ETH goes up, supporting a narrative by Ethereum people which challenges Bitcoin as the best form of money.

I don’t think DAI’s purpose was really ever about competing with Bitcoin as true decentralized money, rather a story for Consensys & Ethereum VCs to use to support the investment thesis of ETH.

The users of DAI are not average normal people, they are quants and math experts making complicated financial instruments used for speculation & trading.

The type of person who “uses” MKR and DAI are the same people who created over-leveraged derrivatives that almost destroyed the financial system at LTCM, and the quants who created the real estate CDOs that almost did us in during 2008.

A very interesting project for sure, but it’s not really decentralized. So then, if it’s not really decentralized, and a user wants to use a stablecoin, why would users not use centralized stablecoins like USDT?

It turns Stablecoin usage *is* dominated by centralized stablecoins like USDC, USDT, PAX, etc.

Maybe I’m just butthurt because I want Bitcoin to be money, and I see stablecoins as eating Bitcoin’s lunch as money until it gets to a high enough price that it’s stable and then sats become a monetary standard.

I suppose I can’t get mad at the free market though – but the free market so far has shown us Maker / DAI is just a toy for quants and Ethereum VCs and not for regular people.

Love reading your stuff Ross, glad to see you are focused on creative projects.