- Stablecoins supported by the DAO were taken into consideration by Ethereum for the future.
- Even though there was considerable sell pressure, ETH moved in the direction of strong purchasing momentum.
Co-founder of Ethereum [ETH], Vitalik Buterin, wrote in a blog post on December 5 that DAO stablecoins might be crucial to the project’s future. The crypto bigwig noted that these coins are the most qualified because they permit collateralization.
Additionally, Vitalik mentioned the possibility of considering governance-backed stablecoins like RAI. It was eliminated from the option, though, due to its negative interest rates and vulnerability.
DeFi offers efficiency?
The founder further defended his position by citing MakerDAO [MKR] and its stablecoin, DAI, as an appropriate project to take the initiative. Even so, he pointed out that MKR had some shortcomings despite its innovation. He added that unless the project increases efficiency, MKR might only be ideal in the long run. Vitalik declared:
“Maker is a fine model to get a stablecoin started, but not a good one for the long term. Hence, making decentralized stablecoins work long term requires innovating in decentralized governance that does not have these kinds of flaws.”
Further investigation revealed that exchange deposits, particularly from the Ethereum community, had not been helped by the FTX collapse. The supply on exchanges has significantly decreased, claims Santiment.
The amount of ETH on exchanges was 14.82 million at the time of publication. This clarifies the idea that by benefiting from the advantages of decentralization, investors might agree with Vitalik’s viewpoint.
However, recent Ethereum blockchain transactions were not particularly active. This was due to a drop in gas consumption to 16.78 billion as of this writing. Consequently, this was a contributing factor in ETH’s struggles to maintain a profit.