Gregory Di Prisco is the Head of Business Development at the Maker Foundation. Voyager sat down with him to discuss how he got interested in crypto, the unique value propositions of Maker and Dai, and what we can expect from the foundation in 2020 and beyond.
1. You made the switch from traditional finance and trading to the blockchain/ crypto space. What drew you to the industry and what was that transition like?
I was actually interested in blockchain (it was just Bitcoin back then) before I formally entered the financial industry. I became interested in bitcoin in 2010 and I imagine I would have done something with it then if I could have, there just wasn't much for a college graduate with an economics degree to contribute in the early days. When I graduated college a year later, I took a job trading futures contracts, mainly on commodities and currencies, and kept tabs on the blockchain space in my spare time (most people don't know this, but the life of a trader is 99% sitting in front of your screen trying not to trade). After the initial Bitcoin development progress began to ossify, I became interested in Bitshares, but that never really made it to the mainstream.
Finally, when Ethereum launched in 2015, I realized that this was potentially a once in a lifetime opportunity. I went to my boss and said, "we've got to get involved with this," and down the rabbit hole we went. Once we officially started investing in crypto-related businesses, the transition went at hyperspeed.
2. Since you’ve been with the Maker Foundation, how has the project evolved and changed?
In a word, growth. Not just growth of the protocol, which has been impressive, but growth of our team and community. Since I became formally involved with the Maker Foundation (I was a community member before that), I’ve seen the team grow by about 10x and the community by an order of magnitude more. This has had its speed bumps, but it’s rewarded us all with hard earned experience that’s going to pay dividends as Maker begins to penetrate the mainstream. That being said, I actually think it’s the lack of change that’s more impressive. Most people don’t know this, but the Maker Foundation team has been working for five years on bootstrapping and nurturing what we have today, which is pretty much exactly what was outlined in the original whitepaper. But more important than vision, we’ve retained the values that have always made the project appealing and resilient. We always focus on doing things right, even if that means it's going to take longer than we’d like it to, and we routinely forsake short term opportunities in service of long term viability.
3. What makes DAI different from other stablecoins? And what benefits does it offer?
Dai is different from other stablecoins because it is decentralized. In its most mature form, it’s intended to represent a perfect diversification of risks which should lead to an extremely stable asset. But bringing it down to earth, there are a few key things that differentiate Dai (the tangible benefits of this decentralization) - (1) Dai is user generated and does not come from a centralized counterparty, it’s peer-to-peer currency and because of this represents the most sovereign form of digital cash. No one can seize, freeze, or defraud your Dai since it is created, destroyed, and implicitly audited by the blockchain. (2) Since Dai is created on the blockchain, it’s not merely an extension of the existing financial system but an entirely new one. What this has mainly translated to is higher savings rates for holding Dai and lower borrowing rates for generating Dai. (3) Dai is the stablecoin of choice for decentralized applications. This ecosystem of dapps provides additional utility to Dai that you generally do not find in competing stablecoins. For instance, Dai is the only way to pay for bandwidth on Althea, a decentralized application which creates a p2p marketplace for access to the internet (they primarily deploy networks in developing countries like Nigeria, but also have a couple of US deployments).
4. How do Maker (MKR) and Multi Collateral Dai (DAI) interact with each other?
The MKR token governs the MakerDAO protocol, the MakerDAO protocol facilitates the creation/destruction of Dai (all Dai is multi-collateral now by the way, this just means that you can generate Dai with a variety of digital assets). MKR token holders vote on all of the parameters that make the protocol function and serve to protect the system should something go wrong.
5. MakerDAO recently made changes to prevent another price collapse like the one on Black Thursday, can you explain why this will make it more stable and protected against extreme volatility?
I should note that there’s nothing MakerDAO can do to prevent price collapses in the underlying collateral assets. The MKR holders, in their role of governing the system, are constantly taking action to make the protocol more resilient against large price swings. In the long run, this means that the collateral portfolio is so diversified that the total collapse of a single asset should not impact overall functionality. In the short term, they’ve taken measures like extending auction timeframes and onboarding other stablecoins as Dai collateral to keep the system functioning in the face of extreme volatility.
6. What can we look forward to in 2020 on the Maker Foundation product road map?
The Maker Foundation is working very hard, along with MKR holders and the larger MakerDAO community in general, to help improve the protocol in 2020. It should be noted that all these changes originate in the community and the Maker Foundation contributes User Interface design and limited engineering work, at times. The community has discussed updates to the Oracle infrastructure (this is how prices securely reach the blockchain) and an overhaul of the liquidation system (potentially a shift to Dutch Auctions), so I’d expect those topics to gain traction over the coming months. Readers can stay updated on developments in MakerDAO via the Governance forum at: https://forum.makerdao.com/
7. It’s the year 2025, what will be the top 5 crypto assets by market cap?
If I knew this I wouldn’t be working 12 hour days… Maybe the better question is, in five years what will be considered a crypto asset? I believe that blockchains will ultimately power the entirety of our financial services sector, and at that point I think the term “crypto asset” will no longer be an accurate way to describe something - everything will be a crypto asset.
8. In three words, explain blockchain.
Permissionless trust machine