The upcoming MakerDAO auction is set to cover the protocol’s losses during the March 12 Ethereum price crash, with its success being critical for the stability of DeFi.
The heart of DEFI is which is MKR/DAI is entirely controlled by one guy Rune Christensen, 90% of the MKR tokens are owned by 100 wallet addresses and the development, audit, price oracles and internal knowledge of the system is controlled by a handful of people.
It’s a centralized high risk system controlled by a few where crypto gamblers loan/borrow money to gamble on crypto prices going up. This has been shilled to death without communicating the risks and people are getting fucked bad.
Data from the Ethereum shows that 36% of liquidations on March 12–13 were auctions with zero bids, liquidators earned 62K ETH for free
The MakerDAO, which issues a decentralized stablecoin on the US dollar with DAI, is based on the platform.
The place to see all MakerDao Auctions. Welcome to the open blockchains.
A large drop in the price of ether is testing the feasibility of Ethereum’s entire system of lending and borrowing.
The collapse in Ether’s price could lead to an emergency shutdown for DeFi leader MakerDAO, though it’s a contingency that developers are eager to avoid.
Dai was 1.1 USD. Because liquidations did not go through properly. And it is still not fixed.
1] eth price tanked
2] gas prices mooned
3] liquidation auction bots who bid DAI (to burn) to get ETH from underwater CDPs stopped working, due to some combination of running out of DAI liquidity (likely), not being properly configured to participate in gas price auctions (likely), or miner censorship (unlikely, but yet to be determined from mempool data)
4] a single liquidation auction bot was able to bid negligible (near 0) DAI for ETH collateral, they have effectively stolen $4M in sum from the MakerDAO protocol, because the protocol was expecting 4M DAI in exchange for the ETH that was auctioned during liquidation, but it was never received (the CDP holders who were liquidated should have also received some ETH back, but in effect their liquidation penatly was around 50% (more than the 13% it is normally) and they are now owed ETH by the Maker Foundation and will likely get refunded
5] in 48 hours, unless *something happens*, Maker will proceed into *debt auctions* which will inflate the MKR supply and continue to auction until 4M DAI is bought and burned
Print MKR. Save the debt. But people who get rekt are likely staying rekt unless something magical happens. That ETH they were supposed to get is now 0 ETH basically.
Co-founders Rune and Nikolai printed 1,000,000 MKR tokens and gave themselves ~90% maybe more. They got rich by dumping it on investors. They still hold the majority of the tokens.
Maker Foundation Sells $27.5 million MKR to Dragonfly Capital and Paradigm, expanding their influence in Asia while driving DeFi adoption.
Leading cryptocurrency ranking agency Weiss Crypto Ratings predicts that the DAI stablecoin could become the first real world currency
One important security feature of the Maker Protocol is called Emergency Shutdown. This crucial security feature allows the system to shut down and make underlying collateral available for redemption by Dai holders and Vault owners.