MakerDAO’s Gustav Arentoft: Decentralization Is Not a Binary Choice

MakerDAO’s Gustav Arentoft talks decentralization and regional expansion in a new interview with Cointelegraph.
Decentralized finance, more commonly known as DeFi, is quite complicated. Even the heads of DeFi companies seem unable to define the sector in a few sentences. So, here’s another attempt: DeFi is a financial ecosystem, in which it is possible to build tools, services and smart contracts and then bond them together on a blockchain, just like lego. It might not sound like fun, but it’s probably more useful.Lego might well be Denmark’s most famous export, but DeFi’s number one company, MakerDAO, is giving it a run for its money. Since the company was formed in 2015, it has rapidly grown to be the market leader in one of finance’s most exciting sectors. Cointelegraph caught up with MakerDAO’s European business development representative, Gustav Arentoft, about centralization and the company’s next move.MakerDAO on decentralizationFor many in the industry, DeFi and MakerDAO are synonymous. However, that does not mean that the company attracts only slavish adulation. For better or worse, blockchain technology and cryptocurrency are philosophically driven. For many investors, decentralization is the most important principle, to which companies and currencies must adhere. Arentoft explained that, on the business side, universally applying decentralization across all use cases is not necessarily a recipe for success. He explained his feelings about the company being described as a decentralized central bank by fellow blockchain bankers Bitwala:“MakerDAO definitely shares a lot of similarities to the banking system. It can be looked at just like a community-driven central bank. We don’t label ourselves as a central bank. But we do, of course, share a lot of similarities with traditional finance.” Arentoft believes that some of the activities performed in the company’s system are very similar to what a central bank would do in a traditional finance setting, adding:“So, in that sense, I don’t believe that we have reinvented the way that we do finance. We’re just doing it in a different way where we utilize the transparency and openness of the blockchain and the effectiveness of, for example, smart contracts to be able to execute specific tasks. This system is kind of like where we replace some of the traditional methods of doing things and thereby heightening efficiency.” Although DeFi is by definition decentralized, Arentoft said that elements of centralization can actually be beneficial to projects in early stages: “I think there’s two sides to the question. In direct retail offering, is centralization acceptable there? And then, at the protocol level, where, for example, we are taking the approach of gradual decentralization. And one of the reasons for that is also that initially, when you build a product, when you’re bootstrapping the ecosystem and you actually have a developer team sitting and building the protocol, you cannot be decentralized, because you literally have a team sitting somewhere building it.”For Arentoft, the prime justification for gradually decentralizing as the project grows is increasing the level of security. Although DeFi, through the flexible nature of its

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