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Chainlink users react as MakerDAO declares support for LINK as a collateral option


An announcement on Wednesday informed that MakerDAO has enabled support for Chainlink (LINK) and two other tokens to be used on the protocol as collateral options. This reportedly brings the number of tokens supported on Maker Vault this year to more than ten. Meanwhile, rather than expressing excitement, many Chainlink users have criticized the token support.

MakerDAO enables support for Chainlink, Loopring, and Compound tokens

As MakerDAO announced, the community agreed and voted in support of the three tokens through the protocol’s on-chain governance program this week. Already, the proposal to integrate these three tokens onto the protocol was previously pitched during the summertime. Now, users can be able to generate DAI loans by locking the three new tokens in the protocol.

The stablecoin ‘DAI’ is an ERC20 token pegged to the US dollar. The addition of Chainlink, Loopring, and Compound tokens means there are now a total of 11 tokens supported since this year for a decentralized finance (DeFi) loan on MakerDAO. Some of the other tokens include Wrapped BTC (wBTC), Decentraland (MANA), Kyber Network Crystals (KNC), Tether (USDT), USD Coin (USDC), and so on.

Chainlink users’ reaction

Following the development, many Chainlink users criticized the addition of the LINK token in MakerDAO. Most of the users commented that they wouldn’t deposit LINK cryptocurrency on the protocol for security reasons. Part of the issue raised was that MakerDAO’s current oracle is centralized and can be vulnerable to certain attacks. Hence, they will rather hold their cryptocurrency than risking it on the protocol, except MakerDAO switched to using Chainlink oracles.

Noteworthily, the Maker community supported the LINK and the other token in an effort to incentivize more DAI borrowing on the protocol. The DAI pegged price has been unstable amid less DAI stablecoin in the market. To rectify this issue, however, more collateral options need to be added to the protocol, said Rune Christensen, the founder of MakerDAO. Given LINK’s user base, the reaction from the users might interfere with Maker’s intentions.

Ibiam Wayas

Ibiam Wayas

Ibiam is an optimistic crypto journalist. Five years from now, he sees himself establishing a unique crypto media outlet that will breach the gap between the crypto world and the general public. He loves to associate with like-minded individuals and collaborate with them on similar projects. He spends much of his time honing his writing and critical thinking skills.

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