Easy Money in 700 ETH Augur Market, MakerDAO Dominance and Delegated Votes
|Camila Russo||Oct 23, 2019|| 3|
Hello defiers! Here’s what’s going on in decentralized finance:
MakerDAO dominance slides
There’s a $110,000 Augur market
Maker community discusses delegated voting
MakerDAO Dominance Dipped Below 50%
The amount of value locked in MakerDAO briefly dropped below 50 percent of total collateral in decentralized finance for the first time, before bounding back today.
There’s 1.6 million ETH locked in Maker, or roughly half of total value locked in decentralized finance, down from more than 80 percent at the start of the year, according to DeFi Pulse. Fast growth in Compound, the second largest platform, and especially in Synthetix, the third largest, have contributed to the recent slide in its dominance.
Image source: DeFi Pulse
Value locked in Compound soared by 68 percent in ETH terms in the past 90 days, while it more than quadrupled in Synthetix in that time. Meanwhile ETH locked in Maker only climbed by 13 percent.
Growth on other platforms is outpacing Maker even as interest rates to borrow Dai have dropped from over 20 percent to 9.5 percent, that’s lower than Compound’s 12.3 percent, according to LoanScan. This signals that demand to put Dai and other tokens “to work,” for example earning interest, trading on margin, going long or short different financial assets, is outpacing demand to generate Dai.
This is bullish for DeFi, as it signals the space is maturing, with many growing alternative platforms. But if Dai is the gateway to DeFi, it may also show newcomers aren’t flowing in as fast.
Looks Like There’s Easy Money in a $110,000 Augur Market
Maker Community Discusses Delegated Voting
MakerDAO’s Mariano Conti recently brought up the question of whether MKR holders would be willing to delegate their vote.
If you could delegate your MKR to someone (non-custodial, retrieve at any time) so you don't have to vote every week, would you do it? Who in the community would you trust to vote in your best interest?
It makes sense. Right now only about 5 percent of MKR holders are participating in weekly votes to decide interest rate movements. Soon, there will be other important decisions to be made, like which tokens should be included in multi-collateral Dai. Token holders who aren’t voting effectively delegate decision making to those who are, but they won’t necessarily share their same interests and points of view.
That’s problematic, but so is taking time to review the market, join governance calls and read up on other necessary documentation to make an informed decision every week. It’s cool to have a democratic monetary system, where one token equals one vote, but it’s unrealistic to expect that everyone will use their right to participate.
Maybe something close to a “Maker Congress” will be the answer, where a group of token holders are chosen to represent the rest, and non-voters can withdraw their support at anytime. A Reddit user proposed a small tax that non-voters would pay to compensate voters. This would incentivize participation and put more pressure on voters to take the job seriously. Voting could eventually become a professional service offered by companies –maybe exchanges would be a good candidate to do the job?
Sign up to get the best and only daily newsletter focusing on decentralized finance news, complete with analysis, exclusive interviews, scoops, and a weekly recap. Those who become paying subscribers in the current 60-day beta period which started Oct. 1 get early supporter discount :)
About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.