MakerDAO founder proposes purpose-driven DAO to address climate change issues


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The growing concerns around climate change are urgent, to say the least and they need real solutions. Rune Christensen, founder of MakerDAO addressed this issue recently. He has been advocating for MakerDAO to solve the problem of climate change.

In the latest edition of the Bankless podcast, Christensen highlighted different aspects of the said issue, but with one target at its core — the need for a purpose-driven DAO rather than a profit one. He shed light on the importance of a “clean money” drive, stating,

“I came up with this concept of centering everything around this clean money vision. And the question of DAO’s, how a DAO should organize and this concept of a purpose-driven DAO, versus a profit-driven DAO. I think that’s a real age old kind of issue…”

At present, the “fundamental game-theoretic problems” with DAOs are things like governance attacks. In simple terms, if someone actually controlled the majority of the voting shares, say in DeFi, they can just straight up steal all the assets in the protocol. “Bitcoin itself was driven by the same thing.” he said, adding that “the toxic maximalism was a way for Bitcoiners to work together towards a greater good.”

In addition to this, there was a surge in the environmental economic crisis as well. The crisis plus the existing political instability could very easily result in hyperinflation of the USD. The current financial system ignores what’s going to happen with climate change. But why? To this, Christensen replied,

“…reality of climate change is that it’s not possible in the physical world. Unfortunately you don’t get these complete exponential transformations, it’s very incremental, what’s possible to do.”

Earlier, the exec had written a post to highlight steps that platforms could take to address climate change concerns. It mentioned that one way to achieve this was to ensure MakerDAO’s commitment to decentralized collateral.

There’s more to it

Furthermore, Christensen attached a few more suggestions to achieve the same. He discussed providing different risks of liquidity in different terms, different cost of capital, different risk parameters, also accounting for externalities. “Not just sort of the direct risk of an asset, but then also the external risk that this asset produces for everything else..,” he said.

Meanwhile, Maker could become a voice in “the growing momentum for climate action.” He remains optimistic about the approach, as,

  ” (It) creates some tiny indirect sort of pressure on Société Générale…other banks also start to really consider ESG concerns, externalities and how they do business.”

Here it is important to note that French multinational banking giant Société Générale (SocGen) made an application earlier this month, for the DeFi lending platform to accept on-chain bond tokens issued by the bank, as collateral for a stablecoin DAI loan.

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