MakerDAO is a decentralized autonomous organization (DAO) that manages the Dai stablecoin. Dai is pegged to the US dollar and is backed by a variety of collateral assets. MakerDAO is one of the most successful DAOs to date, and its Dai stablecoin is one of the most widely used in the cryptocurrency industry. In an interview with Cointelegraph MakerDAO’s Gustav Arentoft shared his thoughts on decentralization and MakerDAO’s Gustav Arentoft Decentralization.
What is decentralization?
Decentralization is the process of distributing power and authority away from a central authority. In the context of blockchains, decentralization means that no single entity has control over the network. Instead, the network is governed by a consensus mechanism, such as proof-of-work or proof-of-stake.
Why is decentralization important?
Decentralization is important because it makes networks more resilient and secure. If a central authority is compromised, the entire network can be compromised. However, if a decentralized network is compromised, only the affected nodes will be affected.
Is decentralization a binary choice?
Arentoft believes that decentralization is not a binary choice. He argues that there is a spectrum of decentralization, and that different startups may have different needs.
For example, a startup that is building a financial application may need to be more decentralized than a startup that is building a gaming application. This is because financial applications need to be more secure and resilient.
What do startups need to do to succeed in the decentralized space?
Arentoft believes that startups need to focus on building strong communities. He argues that the most successful decentralized startups are the ones that have strong communities that support them.
Arentoft also believes that startups need to be patient. He argues that building a successful decentralized startup takes time. It is important for startups to focus on building a strong foundation and on developing a deep understanding of the problem they are trying to solve.
Success stories from the MakerDAO ecosystem
The MakerDAO ecosystem has helped a number of startups succeed. Some of the success stories from the ecosystem include:
- Oasis Protocol: Oasis Protocol is a privacy-preserving decentralized finance protocol. The protocol has raised over $200 million in funding.
- InstaDApp: InstaDApp is a non-custodial decentralized finance protocol. The protocol has over $2 billion in total value locked.
- Aave: Aave is a decentralized lending protocol. The protocol has over $13 billion in total value locked.
Advice for startups looking to launch in the decentralized space
Arentoft offers the following advice for startups looking to launch in the decentralized space:
- Focus on building a strong community. The most successful decentralized startups are the ones that have strong communities that support them.
- Be patient. Building a successful decentralized startup takes time. It is important for startups to focus on building a strong foundation and on developing a deep understanding of the problem they are trying to solve.
- Be open to feedback. The decentralized community is very supportive of early-stage startups. However, it is important for startups to be open to feedback and to be willing to make changes based on feedback.
Gustav Arentoft’s insights on decentralization are valuable for any startup that is looking to launch in the decentralized space. By focusing on building a strong community and being patient, startups can increase their chances of success.