Are there any risks associated with using real world assets in MakerDAO?

3 answers

• Dec 16, 2021 · 3 years ago
  Using real world assets in MakerDAO can introduce several risks. One of the main risks is the potential for fraudulent or low-quality assets being used as collateral. This can lead to a decrease in the value of the collateral and potentially result in losses for the MakerDAO system. Additionally, real world assets are subject to regulatory and legal risks, which can impact their value and usability as collateral. It's important for MakerDAO to carefully evaluate and monitor the quality and legal status of the real world assets used in the system to mitigate these risks.
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• Dec 16, 2021 · 3 years ago
  Absolutely! Real world assets in MakerDAO can pose various risks. One major concern is the lack of transparency and verifiability of these assets. Unlike digital assets, real world assets can be difficult to assess and value accurately. This can lead to potential overvaluation or undervaluation of the collateral, which can impact the stability of the MakerDAO system. Additionally, real world assets are subject to market fluctuations and external factors that can affect their value, making them more volatile compared to digital assets.
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• Dec 16, 2021 · 3 years ago
  As a third-party observer, I can say that using real world assets in MakerDAO does come with certain risks. While it allows for more diverse collateral options, it also introduces additional complexities and uncertainties. For example, the valuation of real world assets can be subjective and may require external audits or assessments. Moreover, the legal and regulatory landscape surrounding these assets can change, potentially impacting their eligibility as collateral. It's crucial for MakerDAO to stay vigilant and adapt to mitigate these risks and ensure the stability of the system.
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