The crypto community on Twitter is spreading the news that Maker intends to allow MKR collateral to borrow stablecoin DAI.
According to documents prepared for Maker’s “Endgame Plan,” the DeFi protocol that governs the stablecoin DAI, the developers propose to add a new use for MKR as collateral for DAI loans.
The “Endgame Plan” is a proposal for a complete overhaul of Maker, announced in mid-2022 and approved by the MakerDAO community in October, with the biggest change being the division of the protocol into sub-DAOs with missions. separately, issue the corresponding token. Endgame was initiated by the Maker team, led by the founder Rune Christensen, to find a new direction for the project after a long time facing many problems that threaten the sustainability and stable operation of the project. Maker as well as stablecoin DAI.
Another big change is the scenario that turns DAI into a fully decentralized stablecoin, floating its value and no longer reliant on the $1 mark.
However, someone pointed out that in the new tokenomics section for MKR, Maker has expressed its intention to add a new use to the coin, which is as collateral to borrow DAI.
So far, MKR has been stable on Maker with the function of a fee currency, governance token and bad debt settlement asset.
Immediately after the above information was spread, the crypto community on Twitter had many negative reactions about the new function. Most argue that Maker should not do this if he does not want to create more instability for stablecoin DAI. Their argument points out that MKR is a governance token, so using it as collateral and then borrowing DAI would create the risk of liquidation during market swings, making MKR vulnerable to acquisitions. cheap entry and then implement governance proposals that harm the protocol.
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— PaperImperium (@ImperiumPaper) February 23, 2023
Someone even went as far as to accuse Maker of deliberately creating a way for investors who hold a lot of MKR to convert MKR to DAI “quietly” without having to immediately release it to the market, encapsulated in the guise of “helping to improve the supply of DAI and increase the use of MKR”. Others even compared MKR’s new tokenomics as entering the “fall of the road” of the infamous LUNA-UST model.
Regardless of the crypto market’s early 2023 recovery, MKR has seen little positive volatility, partly due to the coin’s limited utility, as well as its low total supply (yet yet). to 1 million MKR) but has a high market capitalization (725 million USD).
Meanwhile, since the collapse of LUNA-UST in May 2022, stablecoin DAI has become a notable name in the decentralized stablecoin space, with a total capitalization of 5 at press time, $2 billion, 4% market share of the stablecoin segment.