cryptojournalist
Sky (formerly MakerDAO) is catching heat for using a basic Ethereum wallet (an EOA) to manage $756 million in USDC. Critics say this approach leaves the funds open to hacking and potential misuse since EOAs don’t have advanced security features like multisignature approval or automatic safeguards.
What’s the Lite PSM?
Sky’s lite peg stability module (PSM) is a system that keeps its stablecoin steady by letting users swap it for USDC at a fixed rate. As part of a migration plan, $20 million has already been moved, but the wallet controlling these funds is an EOA, sparking worries about safety and accountability.
Sky’s Co-Founder Weighs In
Rune Christensen, Sky’s co-founder, explained that the private keys tied to this wallet were destroyed during setup with Coinbase Custody. While this limits the chance of a hack, it doesn’t address lingering questions: Who controls the wallet? How are transactions approved?
A Move Toward Deflationary Tokens
Christensen has also proposed shifting to a deflationary model, where tokens are burned to reduce supply. Even so, he admitted that in a financial crunch, Sky might have to issue new tokens, sticking to its original economic plan—a move that’s raising eyebrows.
