MakerDAO Joins the Global War Against Climate Change

Rune Christensen the Founder of MakerDAO has buttressed the need for the community to intensify efforts to tackle global climate change by investing the protocol’s collateral in green energy projects and truly adopting the principles of Sustainable Finance, according to a blog post on October 7, 2021.

MakerDao Gets Serious with Climate Change

In a lengthy blog post entitled the “Case for Clean Money” Rune Chrestensen the creator of MakerDAO sheds light on the project’s progress since the dissolution of the Maker Foundation, while also talking about how the protocol can play a significant role in the war against climate change.

“With the Maker Foundation dissolving, I’ve had a chance to reflect on the future of the project. We’ve come incredibly far, and today the DAO is buzzing with an amazing amount of governance and protocol activity. But I believe that there is still a fundamental opportunity to rethink how we approach Maker Governance to make it even more vibrant, more focused, and more decentralized,” he wrote.

Rune argues that the climate change crisis is entirely a financial and capital allocation problem, as architects of the global economy have failed to make long-term plans that foster sustainability and deal with the corruption and lack of transparency that exists in the current centralized financial system.

A Clean Money Future

Importantly, Rune notes that while the Sustainable Finance principle, which focuses on collateralizing the Dai stablecoin with only sustainable and climate-aligned assets is not a new concept in the theMakerDAO ecosystem, it has, however, become important now more than ever to judiciously imbibe in it.

To that effect, Rune has proposed a collateral strategy made up of three key parts: sustainable collateral, resilient collateral, and decentralized collateral, making it clear that this will guarantee the future of Dai as ‘clean money’ even when other digital assets finally succumb to the adverse impact of climate change.

Delving deeper, Rune explains that the concept of sustainable collateral strategy will focus on pumping billions of dollars into projects that will build renewable energy solutions such as solar farms, wind turbines, batteries, and more.

The resilient collateral strategy will focus on diversifying a large chunk of MakerDAO’s real-world assets (RWA) into climate-resilient and socio-politically stable countries like Canada, New Zealand, and the UK.

Finally, the decentralized collateral strategy prioritizes the accumulation of ether (ETH) as collateral, and hold ETH directly in the Maker reserve.

“With Dai operating as a Decentralized, Sustainable, Resilient stablecoin, backed by assets that serve each of these purposes, we can honestly and confidently call Dai Clean Money’,” Rune declared.

The Ethereum team is working round the clock to make the transition to proof-of-stake a reality. The much-talked-about Eth2 upgrade is expected to finally make ether (ETH) ultrasound money and hedge against hyperinflation just like bitcoin (BTC).

At press time ether (ETH) is trading around $3,557, with a market cap of 19.48 billion, according to CoinMarketCap.