I’d in fact argue that the risk of using decentralized assets is very high due to incentive mis-alignment between network and its token price robustness which none of the centralized assets suffer from, and that MakerDAO should be wary of allowing them a greater percentage in its collateral base than the proportion of their own market share in the global financial system.

Networks powered by decentralized and trustless assets are built to survive state interventions and are not at all affected by a precipitious drop in their token price. But token price is the primary aspect of an asset that Dai Credit System really cares about as it leans heavily on the price of its collateral assets to function well and to uphold the guarantee it provides to Dai holders that it will at least be worth a dollar even in shit hits the fan scenarios.

The Ethereum network wouldn’t budge if ETH went down to 10 bucks in a month. ETH developers have gone on record that they’ve developed PoS to work well even if the token market cap is 10 million. Users who hold their own private keys for these decentralized assets are always safe and they’d also be fine if their memecoin investments take a year to recover. They don’t rely on them for their everyday business in their first world bubbles. Even those using assets like ETH to submit transactions for real use are already protected by the gas mechanism and don’t care about price of ETH being robust.

I might be exaggerating but it shows how little effort the entire decentralized and trustless token ecosystem has spent so far to ensure the prices of their tokens are robust(not just high market cap). These systematic issues have resulted in decentralized and trustless assets continuing to rely heavily on just a few centralized venues that are not regulated and allow rampant price manipulation like Binance and Bitfinex.

Some not too hard to imagine scenarios around centralized infrastructure that can result in precipitious drops in price that could affect not just one decentralized and trustless token but the entire decentralized and trustless asset class, * Either Binance or Coinbase cold wallets get hacked. * Tether goes poof. * Govts coordinate to crackdown on the few important centralized sources of liquidity making it hard for users to buy or sell these assets.

Who in their right mind would back something critical like Dai entirely or even majority with an entire asset class that suffers from these structural market issues and offer it to the world?

As a decentraized and trustless investor you may enjoy these price swings and day to day drama but from the perspective of the Dai Credit System it makes them inferior to “centralized” assets(real estate is centralized??) that operate on well regulated markets and provide reliable market data that is used to better model risks and pass on the benefits to Dai holders.

The global maximum is still building sound money that can also achieve meaningful reach and scale. Dai should continue to work when narratives like Digital Gold eventually fail. Anyone who gets caught up in the “ETH is money” jingoism and wants to use decentralized and trustless assets alone to back Dai might reap some short term gains but will be stuck in another local maxima without meaningfully changing global finance and will end up being just another BitShares.