Exclusive: Rune Christensen on MakerDAO’s Vision for DeFi and the Future of Finance

In an exclusive interview, Matt Zahab from Cryptonews had the pleasure of speaking to Rune Christensen, co-founder of MakerDAO, at Consensus 2024 in Austin, Texas, on MakerDAO’s vision for decentralized finance (DeFi) and the future of finance

The conversation delved into MakerDAO’s impressive track record in DeFi, its innovative strategies for offering high yields on crypto assets, and the exciting future of the DeFi space. Check out the full interview here:

MakerDAO Pioneering Stability and Security in DeFi with DAI

MakerDAO is a smart contract lending protocol that allows users to take out loans by depositing digital assets as collateral. The loans are issued in the form of MakerDAO issued stablecoin DAI.

It is renowned for its stability and security and is one of the oldest and most reliable projects in the blockchain space. The cornerstone of its success is the DAI stablecoin, built on blockchain technology, which ensures transparency and resilience.

With over $5 billion in circulation and generating $300 million in annual revenue, DAI has become one of the key players in the stablecoin market. Christensen said, emphasizing the reliability of their platform,

“Maker has a very long track record of stability and security.”

One of MakerDAO’s standout features is its ability to offer an 8% yield on DAI, which often seems too good for those used to traditional finance.

Christensen explained that this high yield is achievable by allocating underlying assets between traditional finance assets, like treasuries and real estate, and crypto assets. The “basis trade” in the crypto market further improves the yield, where inefficiencies allow for significant returns. He elaborated,

“We were the first to tap into what’s called real-world assets, which just means normal traditional finance assets.”

According to June 2023 data from Makerburn.com, the annualized revenue generated by Maker soared to over $165 million , marking a 2-year high. This strong revenue growth showed that the revenue surpassed the high from November 2021 and reached levels not seen since May 2021.

Additionally, the supply of DAI climbed to a 5-month high of 5.35 billion DAI. This increase was attributed to more users, including high-profile crypto figures like Tron founder Justin Sun, purchasing DAI to benefit from a higher interest rate on deposits offered by the Maker protocol.

Despite their success, MakerDAO recognizes the need to make DeFi more user-friendly. Their latest initiative, “ Endgame ,” aims to simplify the user experience and broaden access to DeFi’s benefits. Christensen highlighted the importance of ease of use:

“What we’re doing with Endgame is making the ultimate money app for saving and growing your money.”

According to the detailed proposal published by Christensen in June 2023, Endgame aims to bring the MakerDAO (MKR) protocol to a “predetermined, immutable end state” by setting up several new DAOs. The Endgame plan aims to improve governance and tap into the raw power of modern DeFi innovation.

This transformation will include rebranding and launching a more intuitive platform, making it easier for users to take advantage of high yields without extensive crypto knowledge.

The Future of DeFi: Security, Simplicity, and Excitement

Looking ahead, Christensen is optimistic about DeFi’s potential. He believes that simplifying the user experience and ensuring security are crucial steps towards mass adoption. He also pointed out DeFi’s unique offerings, such as token farming, which can expose users to promising projects like Spark. He emphasized that these opportunities are coupled with the security of stablecoins.

“We’re giving you that exciting crypto experience with tokens and upside potential.”

Beyond MakerDAO, Christensen also expressed great enthusiasm for zero-knowledge (ZK) computation , a technology that could revolutionize blockchain scalability. He envisions a future where decentralized systems become more efficient as they grow, starkly contrasting traditional blockchains that slow down with increased use.

“With properly implemented ZK, you can actually speed up the blockchain as you add more computers,” he explained, hinting at the possibility of integrating this technology into MakerDAO’s future projects.

According to Christensen, this technology could revolutionize blockchain infrastructure by enabling systems to become more efficient as they grow. This would solve the problem of traditional blockchains, which tend to slow down with increased load.

Lastly, Christensen also teased the possibility of a future MakerDAO Layer 1 (L1) blockchain. He shared their aim to harness the full capabilities of zero-knowledge proofs and use them to the industry’s greater advantage.

Consensus 2024

Cryptonews reporters Rachel Wolfson and Matt Zahab are on the ground at Consensus 2024. Taking interviews from industry leaders and pioneers, as well as prominent analysts, they bring you the latest updates from one of the biggest crypto events globally.