When did it all click?
It took a while. I saw bitcoin pass the $5 mark, then the $10 mark, then the $20 mark, then the $100 mark, and I told myself that I still had to understand what it was. The big breakthrough came in 2014. I remember it was one morning, I was making myself a coffee, I was on my computer and it was like a huge blow to the head. Everything I'd read about Bitcoin suddenly fell into place, as if by magic. I realised that Bitcoin and cryptos were going to change everything. I quit my job as a developer and started going to all the crypto events to meet other enthusiasts. That's when I discovered MakerDAO, which had just been created. A few weeks later, I met Mariano Conti (co-founder of MakerDAO, editor's note) who was surprised that I knew about his embryonic project! That's how I joined the organisation.
And you haven't left since. But why MakerDAO? Why stablecoins?
For me, there are only three cryptos that really count and that will exceed $1 trillion in capitalisation: Bitcoin because it's the first crypto and digital gold, Ethereum because it's the new financial infrastructure, and stablecoins. I could have worked on other projects, but I decided to focus on stablecoins because they have enormous potential. They're too often reduced to 'stable' cryptocurrencies, but they're much more than that. You can do lots of things with them, they're all very different, even if today many of them are poorly designed and explode in flight...
Are you thinking of the UST from the Terra project?
Yes of course. In the immediate aftermath of the UST crash, we saw authorities from all over the world rise to the occasion. Even the US Treasury Secretary, Janet Yellen, said that we had to react. But we've been saying for months that there's a problem with UST and Terra. So go ahead, do it, regulate. But don't tar the whole sector with the same brush.
Do you doubt this regulation?
Things are quite simple: there are centralised stablecoins based and localised, particularly in the United States. These are stablecoins like Circle's USDC and Tether's USDT (Read our big feature on stablecoins) . These are sensitive to regulation. And then there are decentralised, non-localised stablecoins like MakerDAO's DAI. We don't meet the same standards.
What about Europe in all this?
There are euro stablecoins, but look at the market... All the big centralised projects are already indexed to the dollar, except precisely those like DAI which are totally decentralised products.
Are you working on a euro DAI?
This is one of the subjects on the table. Some people within MakerDAO are pushing for it. We'll see.
What makes DAI special?
I often see people on social networks comparing DAI to USDC or USDT, which makes no sense. Circle and Tether are not technology companies, they are financial companies. They are like banks on Wall Street. They issue an ERC20 token and they have a reserve in front of it, that's all. Anyone on Wall Street could do what they do. That's why they're backed by the banks, whereas if you look at MakerDAO, it's completely different. We're a decentralised organisation that allows anyone to create a stablecoin by contributing their crypto-assets.
In March 2020, the crash in the markets almost took you away. Since then, a large part of the DAI's reserve is still based on USDC, which is a centralised stablecoin. Isn't that paradoxical?
There are also a lot of ethers. It's not a problem that there's UDSC. What we need is for it not to be the only thing, for the reserve to be very diversified and easily scalable.
What would happen if USDC were banned?
We'll find an alternative. We're capable of adapting to any situation, as we've already shown.
How is MakerDAO managed?
We're a DAO so we don't have a manager like in conventional companies. We manage the project collectively with just over 200 people across the planet. Everyone is paid from MakerDAO revenues. We earn money. Over the last six months, we've generated $100 million in revenue, which isn't bad. All our decisions are taken by vote.
And there's constantly consensus in the community?
No, not everyone agrees and that's normal. In fact, there are more and more differences within the project with "chapels", which doesn't stop us from moving forward.
What is your mission within DAO?
I'm responsible for MakerDAO's partnerships and marketing, and there's a lot of work because we don't communicate enough about what we do. Obviously the ecosystem knows us, but our aim is to be used far beyond the circle of connoisseurs. If we stop there, we won't reach critical mass.
What's the most important thing for MakerDAO?
Our compass is security. When I say security, I mean security in the broadest sense, and in particular financial security. It's essential, and the Terra crash made that abundantly clear. For months, Do Kwon and others said they were going to kill the DAI. Today we see what that has done...
Do you think the UST crash dooms algorithmic stablecoins?
We need to stop talking about algorithmic stablecoins. They don't work. Some project holders think they're the only ones to have thought of it, but there's a reason why there's an over-collateral in the DAI system (to create $100 of DAI, you have to put $150 of cryptocurrencies). Do Kwon and others think they can do without it, but it's like in physics-chemistry, you test formulas, and in this case the algorithmic stablecoin formula is not stable, so you just have to stop because otherwise there will be other disasters. Algorithmic stablecoins are a time bomb.
You've been in the news a lot since the UST crash. Have you benefited from it?
Are we being talked about more? Yes, of course we are. And at the same time it's normal, some projects like Terra haven't stopped saying they were going to "kill" us, so inevitably... Afterwards no one can be happy about the situation. Hundreds of thousands of people have lost a lot of money. Now we have to move on. The most important thing now is to continue to develop MakerDAO and explain to people why they should use DAI and all our other services.
What is MakerDAO's ultimate goal?
We simply want to become the world's leading provider of credits. It may sound crazy like that, but decentralised finance is going to grow enormously. More than 2 billion people don't have access to a bank account and financial services. They cannot borrow money. This is the case in Asia, Africa and South America. DeFi and stablecoins have developed in Argentina for these reasons. As long as you have a smartphone, you can buy cryptos, put them in DeFi and borrow them in DAI. You can then spend them on a coffee or a house. It's as simple as that.
Do you think this will happen in the US and Europe?
In the US and Europe you have banks, people have access to credit, so at the moment it's not too much of a priority. But decentralised finance is still in its infancy. It has the advantage of being much cheaper than its traditional equivalent, so I think it will develop for that reason in advanced economies.
Of all the services MakerDAO is developing, which one are you most advanced on?
Clarily it's loans. You can deposit your cryptos and recover DAIs. Then we're working on collateralisation with physical assets, meaning you can get DAI by depositing tokenised real assets, like real estate. The other product we're working on, which is really nice, is a smart contract system that can be implemented in other DeFi protocols such as Aave or Compound and that enables fixed rates to be maintained. This is very useful when there is a lack of liquidity in a pool and when there are major variations in rates. How does it work? The contract is linked to the pool and when there is a lack of liquidity, you can create DAIs to avoid sudden variations. When liquidity is low, rates rise. And the opposite happens when liquidity is too high. It's quite revolutionary in my view!"
For the past six months, Société Générale bank, via its Forge subsidiary, has been running tests with DAI loans. What are the results of these tests?
The tests are still ongoing, but it's working well. The fact that a European bank like Société Générale is adopting DeFi is a strong signal. These experiments are going to multiply. Other banks will soon follow suit. No financial institution will be able to miss out on its financing channels tomorrow.
How do you explain that Argentina is "so at the forefront" on the subject of cryptos?
We've been living for decades with one of the worst currencies in the world and a financial system that's completely off the rails. At the same time, Argentines are very well educated, so that creates a very favourable context for the development of cryptos. Argentines live with several currencies, official and unofficial rates. It's such a complicated environment that we have to adapt. Argentines have been preparing for the arrival of crypto-currencies for decades without realising it.
How do you see the future of currencies? What place for stablecoins?
It's very complicated to say. Things are changing fast and we don't really know in which direction. But I think that several currencies will co-exist and that we'll be able to use them at the same time just about everywhere. That's what's already happening in Argentina. And it's going to happen in every country. There will be digital currencies from central banks, stablecoins and cryptocurrencies. We'll use them according to our needs.
But neither the Fed nor the ECB will let that happen. You know that in the US and Europe there is only one currency available...
Yes but they will have no choice. It will be forced upon them.
