less amount of funds at risk of being blacklisted by Circle
This was discussed in the US Financial Services Committee ad infinitum last year in the outgoing house. There are a strong number of representatives who want to get rid of all stablecoins. They know they can demand blacklisting, which is honestly impressive given that in 2021 almost nobody read contracts or understood blacklists take place.
The most common use of the blacklist now has been hacked funds, and also funds sent to wrong addresses. USDT is pretty efficient even and returns stuck funds sent to contracts for a 10% fee, and wrong addresses too if you know the right people.
While you may discount a direct blacklisting of the ENS, it is definitely possible to get wrapped in sanctions or sweeping legislation of DAOs with governance token. The main threat though is simply a KYC mandate for all stablecoin transactions, and making them illegal with a future rollout of a CBDC down the road. They did exactly this almost overnight with the UIGEA, and they are very likely to pull a similar stunt when it comes to stablecoins.
You may counter with the fact the ENS is ‘transparent’ with known directors, but that’s not how this works. In 2006 there were very transparent and fair gambling sites for poker, while in 2023 there is a mess of gambling legislation at the state level in the US, and nothing is good for anyone. It took way longer than anyone expected for even the most basic things to take place, and the fad of poker long moved on.
Putting money, even in DAI is high risk for anything but a short term movement of small funds. There are practical reasons to do this.
- some arguably very safe yield i.e. 1.5% with $500M+ TVL
The yield of Ethereum will vastly destroy any stablecoin yield by growing as a network. If the ENS makes it, Ethereum does. There are scenarios where the ENS fails, and Ethereum does well, but it doesn’t seem very likely. This is why what is going on here is so shocking. Any basic understanding of risk and economics means you would never suggest this, unless of course you knew it was going to fail, or you had dark motives.