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MakerDAO New DAI Ceiling After Hitting $100 Million Cap

November 8, 2019 at 2:12 PM | By Jit Sutradhar News

MakerDAO credit system, managed by the Foundation maker, hitting the debt ceiling Wednesday with about $ 100 million worth of one stablecoin DAI issued and valued at more than $ 339 million of ethereum locked up as collateral.

On Thursday, the maker of the Foundation proposes a new debt ceiling of 120 million DAI, which will now be elected by the holders of government token MKR.

“MakerDAO have hit that limit and no longer [DAI] can be produced until the debt limit increase,” the president of the Foundation maker Steven Becker said CoinDesk.

This follows a previous increase in 2018, which doubled the debt ceiling DAI from 50 to 100 million stablecoins.

Despite the rapid growth of the platform, Becker said the nonprofit employees do not have statistics or demographic insight cryptocurrency take this loan. Whoever they are, LoanScan counted 35 919 users conduct transactions over the past month alone.

Back in July, MakerDAO Foundation CoinDesk Joe Quintilian said he “would not be surprised” if the first loan of $ 3 million spent in 2020. In November, at least five loan exceeds that number, including two loans of more than $ 8 million each.

These loans have fixed interest rates. Michael McDonald, creator DAI mkr.tools analysis of the site, said in July that the increase in the debt ceiling might require a higher “cost stability,” the interest rate to be paid when they close their DAI loan.

Cost stability fall of more than 18 percent this summer to 5.5 percent today. The majority of the 35 voters who participated in the poll this week decided to raise the rate again to 9.5 percent. However, the proposal MakerDAO Foundation Thursday to raise the debt ceiling of 120 million DAI also put the cost of the stability of a 5 percent reserve for the vote.

Borrowers have to pay any fees the voters decide if they want to reclaim their collateral. Turnout remained low (only 1.97 percent of shareholders participating in the voting MKR this week), perhaps in part because of MKR token cost about $ 612 each.

Crypto-centric fund Andreessen Horowitz holds 6 percent of their token MKR, with polychain Capital and 1confirmation also holds a significant amount and nonprofit board seats. The MakerDAO Foundation has 85 employees contracted, said Becker. In addition, the system underlying the backbone ethereum being reconstructed, a project called Eth 2. Becker said it was too early to say when or how the system will be migrated to the new blockchain, although mutual compatibility is planned.

“The impact that we plan to be overlooked and very much manageable,” Becker said of the upgrade ethereum.

DAI maker and tinkerer holder Taylor Monahan, CEO of startup MyCrypto wallet, said CoinDesk he’s worried there are not enough open discussion of the risks involved with financial decentralization [Defi].

“Let’s be upfront about what the real risks, rather than say they are very minimal,” he said, adding:

“We can’t just let [growth] overshadow the fact that there are unintended consequences and unmitigated risks.”

Risk

One risk: These loans automatically liquidate if the price drops below the ether at the designated point (which varies depending on the loan).

On November 18, MakerDAO will switch to multi-assurance system, where users can place just outside ETH cryptocurrencies into DAI system. For starters, the system will only support one another token, BAT. Becker said CoinDesk OmiseGo is another sign of candidates being considered. Each type of collateral will sign to face the liquidation in accordance with its own price feeds.

One aspect of the current migration MakerDAO troubled mortgage process Monahan call a “dome,” as if the ether is guaranteed to remove DAI stored for safekeeping with no further action is required on behalf of the user. (The previous name to take DAI loan is “secured debt position.”)

Becker said there would be enough material instruct the user on how to transfer their loans from the current system with a multi-collateral system later this month. It could be as simple as pressing a button and show agreement, he said, depending on the user’s platform of choice.

“As with any migration, you will have a dual system run until some time has passed,” Becker said, adding it was not yet clear what will happen to the loans that have not moved at this time next year.

Monahan said he was excited about Defi ecosystems evolve, but it also reminds him Autonomous Decentralized Organization [DAO] hack in 2016, in which millions of dollars stolen token and the whole blockchain ethereum it reorchestrated to restore the missing funds.

“I kind of wish we did not do exactly the same thing. Let’s talk about [the risks] before it’s too big, “he said, adding he expects people to explore every possible way this could affect the user.

MakerDAO image via Shutterstock

This article is republished from coindesk.com. If you have any questions, objection or any other matter you can contact us. Thank you for visiting our website.

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