The ecological status and potential variables of "DeFi veteran" MakerDAO

Author: Jake Pahor; Compiled by: Foresight NewsMakerDAO is a revenue-generating machine that continues to print money to create wealth regardless of market conditions.

This article is the latest research report on MKR in October 2023.

The Maker Protocol enables users to obtain loans by using their crypto assets as collateral, and it works like this:

User deposits collateral (approved ERC tokens);

The stable currency DAI is minted according to the mortgage ratio;

DAI is currently the largest decentralized stablecoin and is pegged to the US dollar.

Use cases for DAI include:

Decentralization ensures financial independence

Users can generate currency independently;

Automatic Savings Return (DSR);

Fast, low-cost transfers and remittances;

remain stable in volatile markets;

In addition, DAI can also be used to pay Gas fees in the Ethereum ecosystem in certain scenarios to improve the Web3 entry experience for new Web3 users.

The current TVL of MakerDAO is $4.5 billion, which is the lowest level since January 2021 and a 78% decrease from the all-time high reached in December 2021.

Despite this worrying downward trend, MakerDAO still holds the fourth position among all DeFi protocols (total TVL).

In the past 30 days, MKR generated $10.7 million in revenue. If annualized, this figure reaches $130.7 million, making it seventh among all agreements.

MakerDAO’s fees and revenue are primarily generated through interest paid by borrowers on the platform.

The MKR token has two main uses:

governance;

Recapitalization Resources;

In addition to its governance role, MKR can also be used to recapitalize the system.

That is, if the debt of the Maker system exceeds the surplus, the MKR token supply may be expanded through a debt auction.

Therefore, this risk encourages MKR holders to self-regulate and manage the MakerDAO ecosystem responsibly to mitigate excessive risk-taking.

This also means that the supply of MKR may fluctuate based on debt capitalization.

These are the current supply statistics:

Circulating supply = 901,000 MKR;

Total supply = 977,000 MKR;

Maximum supply = 1 million MKR;

Market cap = $1.27 billion;

FDV = $1.4 billion;

Market cap/FDV = 0.9;

Crypto assets in the MakerDAO vault include:

$49.61 million in stablecoins;

$800,000 in BTC and ETH;

Native token MKR worth $122.38 million;

That is, the MakerDAO vault holds a total of $172.39 million (including the native token MKR), which ranks 11th among all protocols according to DefiLlama data.

At the community governance level, anyone can submit proposals to MakerDAO for voting, but only MKR holders have the right to vote on changes to the Maker protocol.

The process consists of two stages:

Proposal voting

Execute voting

These two steps ensure that MakerDAO considers carefully before proceeding with the final vote.

In 2014, MakerDAO launched on the Ethereum blockchain and has since become one of the largest DeFi applications. The protocol was co-founded by Rune Christensen and Nikolai Mushegian.

DAI is also now one of the most widely used stablecoins.

In total, Maker has raised approximately $54.5 million in multiple token sales:

On December 16, 2017, it raised US$12 million with participation from Andreessen Horowitz and Polychain Capital;

On April 23, 2019, raised $15 million, funded by a16z Crypto;

In April 2019, it raised US$27.5 million with participation from Paradigm and Dragonfly Capital;

MakerDAO has become the clear market leader in the collateralized debt position (CDP) category, although it now faces competition from emerging protocols such as Liquidity and Lybra Finance.

At the same time, in terms of stablecoin competition, other mature DeFi participants such as Curve and AAVE have also launched stablecoins such as crvUSD and GHO.

At the security audit level of the protocol, Maker has completed security audits by a number of well-known auditing companies, including:

Trail of Bits (security review of smart contracts);

PeckShield (traditional audit);

Runtime Verification (model used to verify system logic);

Overall, I am very bullish on MakerDAO and the DAI ecosystem, and here are some upcoming positives:

The launch of Sub DAOs;

Spark Protocol；

RWA narrative;

5% APR on DSR;

Token Split;

rebranding;