MakerDAO Founder: Multi-Collateral Dai’s secret sauce is ‘risk diversification’

The MakerDAO protocol is the latest to come forward with a major upgrade, after the launch of Multi-Collateral Dai on the main network. Rune Christensen, Founder of Maker, recently featured in a Blockcrunch interview to share the implications of the launch on the network over the next decade.

Clarifying the concern of most Dai holders regarding the planned upgrade, Christensen said that users are not bound by any time limit to upgrade their tokens and that “there is never the risk of the funds getting lost.” Additionally, Maker has built tools to help people transition to Multi-Collateral Dai (MCD), including a migration contract. Although no deadline has been set for the switch from Single-Collateral Dai to Multi-Collateral Dai, Christensen mentioned that users’ holdings will eventually be converted to its value’s worth of ETH.

Getting into the specifics of the upgrade, the Founder added,

“One of the great challenges is just getting Multi-Collateral Dai governance up and running because it is significantly more advanced than what we’ve been doing so far with Single-Collateral Dai.”

Stating that Single-Collateral Dai will be closely tied to Multi-Collateral Dai, Christensen claimed that “it should be impossible for Single-Collateral Dai to fall below $1 if Multi-Collateral Dai is kept at $1.” He also told viewers that in case the coin falls below $1, “you just migrate across.”

In terms of the cryptocurrency’s usage, the entrepreneur highlighted the importance of Maker governance by stating,

“The secret sauce of Multi-Collateral Dai governance is the core advantage you get from diversification of risk. That’s how all of this new opportunities have to be approached.”