MakerDAO upgrade stirs controversy following accusation of centralization

• MakerDAO has announced that it has rebranded to Sky and will upgrade its DAI stablecoin to USDS.
• The new update is said to include a freezing feature and a feature that bans VPN usage.
• Members of the crypto community have expressed displeasure, arguing that the governance protocol is becoming a centralized system.
• A potential scammer has taken over the old MakerDAO username on the X platform.

MakerDAO (MKR), the governing protocol behind DeFi stablecoin DAI, announced on Tuesday that it has changed its name to Sky, introducing new upgrades to its token and stablecoin. Following the announcement, the governance team came under fire from several members of the crypto community.

The crypto community is expressing concern that DAI could become centralized

Decentralized protocol MakerDAO came under fire on Tuesday after announcing its rebranding to Sky.

The announcement came earlier in the day after the team released an official statement for the rebrand. They also mentioned the launch of a new governance token, SKY, along with an upgrade of its stablecoin from DAI to USDS.

The rebranding is part of MakerDAO’s final game plan, which introduces USDS and SKY as replacements for DAI and MKR. Users can decide to upgrade from DAI to USDS on a 1:1 basis, and MKR to SKY at a 1:24,000 exchange. However, both tokens will remain available and unchanged until the governing team orders otherwise.

The switch from MakerDAO to Sky came with criticism from the crypto community.

Several members expressed their displeasure with this new model, claiming that MakerDAO could be heading towards centralization and censorship.

The new model would include a VPN blocker that prevents users in certain parts of the globe from accessing the website and a new feature to freeze its stablecoin. A freeze feature is popular among centralized stablecoins like USDT and USDC, where the issuer can freeze their assets in case of potential scams, hacks, or government intervention.

@Lumbergdoteth of PleasrDAO posted on X:

“DAI is now migrating to USDS, a censorable stablecoin that goes against its original vision. RIP DAI, 2017-2024.”

@Oxngmi from DefiLlama also posted:

“Rip, looks like the rebrand maker put in a vpn blocker (makerdao.com doesn’t block).”

Meanwhile, after the rebranding, the MakerDAO handle was immediately taken over by a new anonymous user who used the Fuddies NFT image as a display image.

Therefore, users should be cautious when dealing with the official but new @SkyEcosystem account to avoid falling prey to potential scammers.