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In March 2020 the stability of Dai was questioned during extreme market volatility, to mitigate liquidity risk there was a [https://forum.makerdao.com/t/onboarding-usdc-as-collateral-to-mitigate-liquidity-risk/1570 proposal] drafted to onboard USDC as collateral. USDC is a stablecoin backed by dollars held in a bank account, and supported by several institutions including Coinbase and Circle. However critiques have questioned adding USDC as collateral as it would make Dai less decentralized with banks backing the Dai stablecoin.<ref>https://insights.deribit.com/market-research/dai-is-now-60-backed-by-centralized-assets-what-does-that-mean/</ref> | In March 2020 the stability of Dai was questioned during extreme market volatility, to mitigate liquidity risk there was a [https://forum.makerdao.com/t/onboarding-usdc-as-collateral-to-mitigate-liquidity-risk/1570 proposal] drafted to onboard USDC as collateral. USDC is a stablecoin backed by dollars held in a bank account, and supported by several institutions including Coinbase and Circle. However critiques have questioned adding USDC as collateral as it would make Dai less decentralized with banks backing the Dai stablecoin.<ref>https://insights.deribit.com/market-research/dai-is-now-60-backed-by-centralized-assets-what-does-that-mean/</ref> | ||
With the proposal to add USDC it opened the way for more fiat-backed stablecoins to be added. In July 2020, an upgrade to the Compound lending protocol caused Dai to come of its peg again. This was already [https://forum.makerdao.com/t/upcoming-comp-farming-change-could-impact-the-dai-peg/2965 anticpated] but resulted in a [https://vote.makerdao.com/polling-proposal/qmrstwrnbrufiffttmsbxqn9ermoeiqj2b43r7xs2jwmhp proposal] to add other stablecoins like | With the proposal to add USDC it opened the way for more fiat-backed stablecoins to be added. In July 2020, an upgrade to the Compound lending protocol caused Dai to come of its peg again. This was already [https://forum.makerdao.com/t/upcoming-comp-farming-change-could-impact-the-dai-peg/2965 anticpated] but resulted in a [https://vote.makerdao.com/polling-proposal/qmrstwrnbrufiffttmsbxqn9ermoeiqj2b43r7xs2jwmhp proposal] to add other stablecoins like Gemini USD, Binance USD and increase the systems [https://twitter.com/MakerDaiBot/status/1280348236730052610 debt ceiling]. | ||
This development made the backing of Dai partially dependent on centralized actors thus making Dai less decentralized. | This development made the backing of Dai partially dependent on centralized actors thus making Dai less decentralized. | ||
=== Dai usecases === | === Dai usecases === | ||