The MakerDAO loan system, administered by the Maker Foundation, reached its debt ceiling on Wednesday with about $ 100 million of the fixed investment DAI and more than $ 339 million of Ethereum blocked as collateral.
On Thursday, the Maker Foundation proposed a new debt ceiling of 120 million DAI, which will now be voted by the holders of MKR governance tokens.
"MakerDAO has reached this limit and no (DAI) can be generated until this debt limit is increased," said Steven Becker, president of the Maker Foundation, CoinDesk.
This increase follows the previous increase of 2018, which had doubled the DAI debt ceiling from 50 to 100 million Stableconnais.
Despite the rapid growth of the platform, Mr. Becker stated that the employees of the non-profit association do not have any statistics or any indication on the demographic data relating to the subscription of these loans. encrypted. Whatever their choice, LoanScan has compiled users who made 35,919 transactions in the past month alone.
Last July, Joe Quintilian of the MakerDAO Foundation told CoinDesk that he "would not be surprised" if the first $ 3 million loan was issued by 2020. In November, at least five loans exceeded this amount, including two more than $ 8 million. each.
These loans do not have fixed interest rates. Michael McDonald, creator of the DAI mkr.tools analysis site, said in July that raising the debt ceiling might require higher "stability fees", which users of interest rates need to pay when they close their DAI loans.
Stability fees have risen from over 18% this summer to 5.5% today. The majority of the 35 voters who participated in a survey this week voted to increase the rate to 9.5%. However, Thursday's MakerDAO proposal to raise the debt ceiling to 120 million ICDs also set up a 5% Stability Committee for one vote.
Borrowers will have to pay the fees that these electors will choose if they want to collect their collateral. Voter turnout remains low (only 1.97% of MKR holders participated in this week's vote), perhaps in part because MKR tokens cost about $ 612 each.
Andreessen Horowitz's crypto-centric fund holds 6% of these MKR, Polychain Capital and 1confirmation tokens also holding significant amounts and non-profit board seats. The MakerDAO Foundation has 85 contract employees, Becker said. In addition, the eth 2 project of the underlying Ethereum network is being rebuilt. Becker said it was too early to say when and how the system would migrate to the new blockchain, although mutual compatibility is expected.
"The impact we expect should be negligible and very manageable," Becker said of the Ethereum upgrade.
Taylor Monahan, CEO of the portfolio start-up, MyCrypto, told CoinDesk that she was concerned that discussions on the risks of decentralized finance (DeFi) are not open enough.
"Let's be clear about the real risks, rather than saying that they are so minimal," she said, adding:
"We can not just let (growth) eclipse the fact that there are unintended consequences and unmitigated risks."
Only one risk: these loans are automatically liquidated if the price of the ether falls below a certain point (which varies according to the loan).
Starting November 18, MakerDAO will switch to a multi-collateral system, where users can place crypto-currencies beyond the simple ETH in the DAI system. For starters, the system only supports another token, BAT. Becker said CoinDesk OmiseGo was another potential token. Each type of symbolic guarantee will be confronted with a potential liquidation according to its own prices.
One of the aspects of the current MakerDAO migration that has disrupted Monahan is calling the warranty process a "safe," as if the collateral ether intended to emit DAI was stored to be backed up without having to be "backed up". no further action is required from users. (The old name used to subscribe a DAI loan was "secured position on debt".)
Mr. Becker said many documents would explain to users how to transfer their loans from the current system to the multi-collateral system at the end of the month. It could be as simple as pressing a button and indicating consent, he said, depending on the platform chosen by users.
"Like any migration, you'll have a dual system running until the time is up," Becker said, adding that it was still unclear what would happen to loans that would have not yet been transferred by the same date next year.
Monahan said that she was excited about the DeFi ecosystem's development, but that it also reminded her of the hacking of the Decentralized Autonomous Organization (CAO) in 2016, which had stolen millions of dollars in tokens and reorganized the entire Ethereum blockchain in order to restore the lost funds.
"I hope we will not do exactly the same thing. Let's talk about (risks) before it gets too big, "she said, adding that she hoped people would explore all possible impacts on users.
Image of Olaf Carlson-Wee, Founder of Polychain Capital, via the CoinDesk Archive