Chainlink users criticize MakerDAO’s support for $LINK as collateral for DAI
MakerDAO, the leading decentralized finance (DeFi) cryptocurrency lending and borrowing platform, has added support for three new tokens, Chainlink, Compound, and Loopring, to used on the protocol as collateral assets. The addition of the tokens entails that, going forward, the cryptocurrency and Maker users will be able to lock the token to borrow DAI, which the native digital currency of MakerDAO.
While the announcement means good news for Maker users, many Chainlink users disliked the development, for the fact the MakerDAO runs with another Oracle provider.
MakerDAO enables support for Chainlink, Loopring, and Compound tokens
The Maker community had already proposed the listing of the tokens as a collateral option for DAI stablecoin during the summer. Just this week, the community again voted to support the tokens via the protocol’s on-chain governance program. Thus, users can be able to open a vault using LINK, LRC, and COMP token to borrow the protocol’s stablecoin. This was confirmed in a recent tweet from Maker.
The development now brings the total number of cryptocurrencies support for Maker stablecoin lending to 11, according to reports. Besides the Chainlink, Loopring, and Compound token, the other tokens include USD Coin (USDC), Wrapped BTC (wBTC), Kyber Network Crystals (KNC), Decentraland (MANA), Tether (USDT), True USD (TUSD), Paxos Standard Token (PAX), and 0x Coin (ZRX).
Chainlink users won’t deposit LINK except Maker uses their oracle
The DAI stablecoin in question is an ERC-20 token, which is backed by the United States dollar. Recently, the pegged value of the stablecoin has been unstable due to a low presence in the market. The founder of MakerDAO, Rune Christensen, emphasized that they needed to roll out more support for collateral options in order to resolve the issue of DAI price instability.
In essence, the addition of the three tokens was somewhat aimed at incentivizing more borrowing on the protocol.
However, the announcement of LINK support on MakerDAO faced huge criticism from Chainlink users. They claimed that MakerDAO is operating with a vulnerable and centralized Oracle. Hence, they won’t commit the risk of depositing their LINK cryptocurrency to the protocol. Instead, the want MakerDAO to switch to using Chainlink oracle, which they claimed is safer to use.
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