MakerDAO

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MakerDAO (or MKR) is a decentralized autonomous organization (DAO) made up of the owners of its governance token, the MKR, who can propose and vote on changes to certain parameters in its smart contracts to ensure the stability of the Dai. [1] [2]

MakerDAO is one of the spearheads of decentralized finance aimed at building an alternative financial system without a central decision-making authority. Together, Dai and MakerDAO are considered the first example of widely adopted decentralized finance. [3] MakerDAO is one of the largest DeFi protocols with nearly $7 billion in total value locked as of May 2023 [4] .

History

MakerDAO was created in 2014 by Danish entrepreneur Rune Christensen. [5] According to him, the crypto-currency's name is based on the Chinese character 貸, which he translated as “to lend or provide capital for a loan ”. [6]

On December 18, 2017, Dai was launched on the main Ethereum network. The price of Dai is successfully maintained at the level of the US dollar during its first year of existence, even though the price of Ether, the only collateral available at the time, had fallen by more than 80% over the same period. [7]

In September 2018, venture capital firm Andreessen Horowitz invested $15 million in MakerDAO, purchasing 6% of all MKR tokens. [8] [9]

In 2018, MakerDAO created the Maker Foundation, run from Copenhagen, which serves to help kick-start the creation of the ecosystem, for example by writing the code needed to run and adapt the platform. [10]

In 2019, Dai conservatives have $350 million locked into Maker's protocol. [11] In the same year, MakerDAO experiences an internal struggle over whether it should integrate further with the traditional financial system. Christensen wanted greater regulatory compliance to allow assets other than crypto-currency to serve as collateral for Dai. The struggle led to the departure of MakerDAO's CTO. [12]

In June 2022, MakerDAO suspends Dai deposits on the Aave cryptocurrency lending protocol. [13] In September of the same year, following the banning of TornadoCash by the US authorities, DAO debates a proposal from its founders for DAI to take a back seat to USD in exchange for an assurance that none of its assets can be seized or blacklisted by the authorities. [14] A month later, the organization invested $500 million in short-term US Treasury and corporate bonds. [15]

By July 2023, MKR was DeFi's third-largest protocol, and its exposure to “real-world assets” reached 80% of its revenues. [16] The DAO decides to invest 6 billion in treasury bonds. This pushes the MKR up by 77%. [17] [18]

In September 2023, after founder Rune Christensen mentions a Solana fork, Vitalik Buterin sells the equivalent of $580,000 in MKR. [19]

In May 2023, MakerDAO founder Rune Christensen proposed significant changes under the protocol's "Endgame" roadmap. This included launching new tokens called "NewStable" to replace DAI and "NewGovToken" to replace MKR at redenominated ratios, deploying dedicated liquidity mining programs, restructuring into specialized "metaDAO" subunits, incorporating AI governance tools, introducing staking rewards and lockup periods for long-term governance participation, and ultimately launching MakerDAO on a new Ethereum-secured blockchain or "appchain" to facilitate protocol upgrades and governance dispute resolution. The Endgame plan aimed to streamline MakerDAO's operations, enhance governance, and unify branding under a cohesive ecosystem. [4]

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References

  1. ↑ Chavez-Dreyfuss, Gertrude (June 26, 2019). "U.S. bitcoin ATM operator to add Dai stablecoin, launch remittance service". Reuters.com. Reuters. Archived from the original on 14 November 2020. Retrieved 14 November 2020.
  2. ↑ Stabile, Daniel T.; Prior, Kimberly A.; Hinkes, Andrew M. (July 31, 2020). Digital Assets and Blockchain Technology. Edward Elgar Publishing. p. 263. ISBN   9781789907445. Archived from the original on 28 May 2021. Retrieved 14 November 2020.
  3. ↑ "Why 'DeFi' Utopia Would Be Finance Without Financiers: QuickTake". Bloomberg.com. 2020-08-26. Retrieved 2023-08-21.
  4. 1 2 Haig, Samuel (2023-05-15). "MakerDAO Founder Proposes Dedicated Blockchain and New DAI and MKR Tokens - The Defiant". thedefiant.io. Retrieved 2024-06-01.
  5. ↑ Marsh, Alistair (October 5, 2019). "Crypto Rebels Trip Over Each Other en Route to Financial Utopia". Bloomberg.com. Bloomberg. Archived from the original on 2021-12-16. Retrieved 14 November 2020.
  6. ↑ "r/MakerDAO - 貸 dai ◈". reddit. Retrieved 2021-06-28.
  7. ↑ Hackett, Robert; Roberts, Jeff John; Wieczer, Jen (October 1, 2018). "Why Crypto's Newest Venture Capitalists Bet Millions on an Ethereum "Stablecoin"". Fortune.com. Fortune. Archived from the original on 17 November 2020. Retrieved 14 November 2020.
  8. ↑ Hackett, Robert; Roberts, Jeff John; Wieczer, Jen (October 1, 2018). "Why Crypto's Newest Venture Capitalists Bet Millions on an Ethereum "Stablecoin"". Fortune.com. Fortune. Archived from the original on 17 November 2020. Retrieved 14 November 2020.
  9. ↑ "Silicon Valley bets on crypto projects to disrupt finance". www.ft.com. Retrieved 2024-01-11.
  10. ↑ Wilson, Tom (November 18, 2019). "Crypto backed by crypto: Dai seeks to change 'stablecoin' game". Reuters.com. Reuters. Archived from the original on 16 November 2020. Retrieved 14 November 2020.
  11. ↑ "'DeFi' movement promises high interest but high risk". www.ft.com. Retrieved 2024-01-11.
  12. ↑ Marsh, Alistair (October 5, 2019). "Crypto Rebels Trip Over Each Other en Route to Financial Utopia". Bloomberg.com. Bloomberg. Archived from the original on 2021-12-16. Retrieved 14 November 2020.
  13. ↑ David Pan (18 June 2022). "DeFi Platform MakerDAO Pauses Some Aave-Related Lending Activity". Bloomberg.
  14. ↑ "MakerDAO Gets Existential After Tornado Ban". Bloomberg.com. 2022-09-01. Retrieved 2024-01-11.
  15. ↑ Muyao Shen (6 October 2022). "DeFi Protocol MakerDAO Puts $500 Million in Treasuries, Bonds". bloomberg.com.
  16. ↑ "MakerDAO Now Earns 80% Of Its Fee Revenue From Real-World Assets". Yahoo Finance. 2023-07-12. Retrieved 2024-01-11.
  17. ↑ Sidhartha Shukla (31 July 2023). "DeFi Lender Foray Into Treasuries Drives Rally in MKR Token".
  18. ↑ Tanzeel Akhtar et Sidhartha Shukla (29 September 2023). "Crypto's New Darling Is Ready to Deploy $6 Billion in Treasuries".
  19. ↑ "Vitalik Offloads MKR After MakerDAO Founder Pitches Solana Fork". Yahoo Finance. 2023-09-05. Retrieved 2024-01-11.
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