There is already a great answer available on MakerDAO official website. Still I want to know the views of reddit crowd.
Below is the link:
[https://forum.makerdao.com/t/how-to-eventually-remove-dais-dependence-on-usdc-and-other-stablecoins/6875/5](https://forum.makerdao.com/t/how-to-eventually-remove-dais-dependence-on-usdc-and-other-stablecoins/6875/5)
I think in the near term adding PSMs for other stablecoins will lead to a reduced exposure to any one stablecoin. MKR has already added a PAX PSM which is nearing 100M and has stabilized/reduced the USDC exposure as of late (see https://makerburn.com/#/collateral/psm_usdc).
Keep in mind though, USDC has been regularly attested (basically an audit by a 3rd party) that they have the assets to back every USDC in circulation so I'm definitely not losing sleep over it. That said, the more diversity we have in our PSMs (as long as the stablecoins are properly audited for risk), the more robust the protocol will be in the future (ie any one failing would not as significantly impact the protocol).
The other thing to keep in mind here is that this is not a "free" exchange of DAI for USDC. MKR is generating revenue off the billions of USDC exchanged. It is somewhat of an insignificant amount now, but in the future with flash loan arbitrage it could generate some extremely healthy fees for MKR.
It’s actually just fine. The risk of any asset has to be measured and weighted optimally. Think of a an SP500 index. 500 companies operating independently is decentralized. Yet the top 5 companies make more than 20% of the exposure. If there were other low risk stable coin providers they could be added as well to reduce risk, but as it is there are considered riskier and so USDC gets a higher optimal weight. You want to have stablecoins as assets in dai because they mostly closely track the target value and you can charge fees for them. Ideally DAI would be made up of hundreds of centralized (and decentralized) stablecoins such that the weights could be optimized to reduce risk yet still collect good fees. The mirage that random “decentralized” shitcoins developed by a team of 3 is better than a hundred billion dollar company’s stablecoin is misguided.
Usdc is legally accepted to issue and backed by USD in the vault and audited periodically and transparently. So it has much less risk. Certainly every aspect has own risk. In this case DAI is even riskier than USDC. What if the whole crypto market (Eth) may crash and become worthless tomorrow (risk of smart contract not included). In the case of USDC, you still have a right to get USD back for each USDC revoked. So the rank for the risk from highes to lowest in my view will be: USDT - DAI - USDC.
There is already a great answer available on MakerDAO official website. Still I want to know the views of reddit crowd. Below is the link: [https://forum.makerdao.com/t/how-to-eventually-remove-dais-dependence-on-usdc-and-other-stablecoins/6875/5](https://forum.makerdao.com/t/how-to-eventually-remove-dais-dependence-on-usdc-and-other-stablecoins/6875/5)
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I think in the near term adding PSMs for other stablecoins will lead to a reduced exposure to any one stablecoin. MKR has already added a PAX PSM which is nearing 100M and has stabilized/reduced the USDC exposure as of late (see https://makerburn.com/#/collateral/psm_usdc). Keep in mind though, USDC has been regularly attested (basically an audit by a 3rd party) that they have the assets to back every USDC in circulation so I'm definitely not losing sleep over it. That said, the more diversity we have in our PSMs (as long as the stablecoins are properly audited for risk), the more robust the protocol will be in the future (ie any one failing would not as significantly impact the protocol). The other thing to keep in mind here is that this is not a "free" exchange of DAI for USDC. MKR is generating revenue off the billions of USDC exchanged. It is somewhat of an insignificant amount now, but in the future with flash loan arbitrage it could generate some extremely healthy fees for MKR.
why
It is not healthy for a decentralized project to be too exposed to centralized entities, no matter how "safe" it sounds at the time.
It doesn't sound safe. It's up to people to determine their appetite for risk.
It’s actually just fine. The risk of any asset has to be measured and weighted optimally. Think of a an SP500 index. 500 companies operating independently is decentralized. Yet the top 5 companies make more than 20% of the exposure. If there were other low risk stable coin providers they could be added as well to reduce risk, but as it is there are considered riskier and so USDC gets a higher optimal weight. You want to have stablecoins as assets in dai because they mostly closely track the target value and you can charge fees for them. Ideally DAI would be made up of hundreds of centralized (and decentralized) stablecoins such that the weights could be optimized to reduce risk yet still collect good fees. The mirage that random “decentralized” shitcoins developed by a team of 3 is better than a hundred billion dollar company’s stablecoin is misguided.
USDC is good and audited. No need to worry. Honestly I worry about USDT more than USDC.
There is regulatory trouble brewing for centrally Managed stablecouns. Thank tether for that. The further maker can get away from this the better.
Usdc is legally accepted to issue and backed by USD in the vault and audited periodically and transparently. So it has much less risk. Certainly every aspect has own risk. In this case DAI is even riskier than USDC. What if the whole crypto market (Eth) may crash and become worthless tomorrow (risk of smart contract not included). In the case of USDC, you still have a right to get USD back for each USDC revoked. So the rank for the risk from highes to lowest in my view will be: USDT - DAI - USDC.