Decentralized finance (DeFi) protocol Sky’s new crypto stablecoin could have a decentralized court-like appeals process as part of its freeze function — if the feature ever goes live, says its co-founder.
Rune Christensen, the co-founder of Sky, formerly Maker, told Cointelegraph at Korea Blockchain Week that it’s possible “to design a freeze function that is much more decentralized than what you have with centralized stablecoins.”
The protocol’s stablecoin USDS, a rebrand of its Dai (DAI) stablecoin, was heavily criticized online by DeFi pundits last month over a feature allowing the tokens to be frozen.
Christensen clarified last month that USDS won’t have a freeze function at launch but can be upgraded with the feature if a governance body decides to add it.
If it does go live, he told Cointelegraph that users who have their USDS frozen could “tap into the power of decentralized governance to ensure things like due process” are done transparently.
“One of the things I imagine that could be interesting is something like an appeals process that actually gives everyone the right to go through decentralized governance and get a transparent reason for why they’re not allowed to have their freeze removed.”
Christensen believed the Sky protocol can “make objective calls on objective decisions” using the rules on how the system is supposed to work.
He said it’s “impossible to tell” when or if the USDS freeze function will go live — but it requires “very careful legal, political and regulatory analysis and obviously a very thorough design process done by decentralized Sky governance.”
USDS to teleport between blockchains with Skylink
USDS and the Sky protocol will also later work on many blockchains through a protocol called Skylink, which Christensen says is to “meet the user where they are.”
“Wherever Skylink is deployed, almost the full set of native features is available natively on that destination chain,” he said.
Rune Christensen at the Korea Blockchain Week conference in Seoul. Source: Cointelegraph
That includes a native version of USDS and its features — not the “ad hoc individual solutions” as done with DAI — along with the Sky protocol and its features.
Christensen said Skylink could deploy on “many different blockchains,” including layer 1 and layer 2 networks.
“Multi-chain is essential if you want to get those marginal users that are using whatever chain they’re on,” he said. “If there are users there that are valuable, the only way to get to them is going to be to expand.”
Christensen added crypto has long been dominated by a “‘build it and they will come’ mentality” — which is “not how the world works anymore.”
“In crypto now you have to really fight for the user. So you have to do everything you can as a protocol to make it painless and approachable.”
Christensen said Skylink’s launch will be “a couple of months” after Sky launches on Sept. 18.
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Additional reporting by Andrew Fenton.