Lark Davis, a seasoned crypto investor, recently shared one of MakerDAO’s plans with his followers on Twitter. According to Lark, the decentralized protocol has plans to convert all its USDC to Ether.
MakerDAO currently holds $3.5 billion worth of USDC. MakerDAO issues DAI, a decentralized stablecoin, and DAI uses ETH and USDC as collaterals.
The conversion option was raised due to concerns about fund restrictions. Recently, Tornado cash was banned by the US treasury department due to privacy concerns. The Tornado cash sanction has also affected other protocols in the crypto ecosystem.
About two days ago, the dYdX protocol informed its users that the wallets of some users were flagged due to links to some funds received from wallets associated with Tornado cash. Despite being decentralized, the protocol has worked harmoniously with regulatory authorities to limit fraud.
MakerDAO has picked up a lesson or two from the catastrophic situation. As it stands, detaching itself from assets linked to centralized authorities is the way forward for MakerDAO.
Should the decision be implemented, that would significantly weigh down the market capitalization of the second largest stablecoin. USDC has a market cap of $53 billion and was on track to close its gap with USDT.
On the other hand, Ether holders will likely be large benefactors if the MakerDAO community agrees upon the decision. Although Ether is already a blue-chip crypto asset, adding $3.5 billion to its valuation would still boost the coin’s value.
While Ether and other crypto assets are having one of the best weeks in a long time, the ban has drastically affected Tornado’s cash value. TORN has fallen from a weekly high of $31 and is now valued at $14.