This proposal is due to appear on Snapshot on Monday April 5th (2021-04-05), 1:00PM UTC. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.
Vote is live in Snapshot
Proposal to add mid cap LM rewards to MKR Pool.
- MakerDAO is one of the oldest projects in the DeFi space
- The MakerDAO community is risk adverse and Bancor should be a good fit for their users
- DAI is the oldest & largest algorithmic stablecoin and by building a relationship with the Maker community, they could potentially reciprocate and onboard BNT as a collateral type to the Maker Protocol in the future
Token contract address:
The Maker protocol is an open-source project started in 2014 with the goal of creating a permissionless credit system that would allow users to take out loans collateralized by cryptocurrency. These loans are created by smart contracts that mint Dai, a stablecoin with a soft peg to the US dollar. The protocol was built by the Maker Foundation along with a number of outside parties and over time the foundation has worked to reduce its level of control. They have gradually ceded control to a decentralized autonomous organization (DAO) known as MakerDAO which governs the protocol. The DAO is comprised of individuals across the globe that own the MKR token which affords holders the right to vote on important changes.
Currently, MakerDAO does not support staking for the Maker token (or as a collateral type). One of the few ways to utilize the token is by providing liquidity to protocols such as AAVE (0.04% Past 30 day Avg. APY). Neither Compound or CREAM list it as an asset that you can lend.
If we incentivize the MKR/BNT pool on Bancor protocol then this should be the most attractive option for MKR holders.
Tokenomics & Token Metrics
MKR is the governance token and recapitalization source of the Maker Protocol. As a governance token, MKR is used by its holders to vote on a number of different things. The token also acts as a source of recapitalization when the Maker Protocol runs at a deficit.
The primary responsibility of MKR holders is to ensure the stability of the Dai Peg and the overall health of the Maker Protocol. It is also in MKR holders’ interest to focus on improving and growing the Maker Protocol by building out the governance processes and infrastructure that enable the effective management of the system. This includes, but is not limited to,
- Establishing risk assessment standards for onboarding new Collateral and Vault types
- Ratifying role mandates and electing appropriate parties
- Establishing standards around vote types
There were a total of 1,000,000 MKR at the inception of the Maker Protocol. The current supply is roughly ~995,238.77 (see etherscan).
The total number of MKR in existence can fluctuate based on how the system runs. For instance, the total supply of MKR can increase if the system is running a deficit and needs to dilute MKR as a recapitalization source. If the system is governed well, the total amount of MKR will decrease as MKR is destroyed in exchange for excess Dai from the system’s surplus.
Community and Communication
The MakerDAO community has a large user following that has shown significant growth these past few months. Bringing these users over and making them aware of the Bancor Platform should boost our usage base.
PeckShield: MCD Smart Contract Audit Report Audit by PeckShield (October 2019)
Trail of Bits: MCD Core Smart Contracts Security Assessment Analysis by Trail of Bits (August 2019)
Trail of Bits: DAI Security Assessment Analysis by Trail of Bits (March 2018)
- Trail of Bits: DappHub Security Assessment Analysis by Trail of Bits (November 2017)
The market cap for MKR is roughly 1.88B with a 76M trading volume the past 24 hours.
Since the beginning of the year it has done roughly 190M daily volume on average (see: historical stats) on Exchanges. The majority of MKR currently resides on DEXes with Uniswap/Sushiswap/Balancer leading the pack followed by CEXes (Binance, Huobi, OKex)
By far, the four largest pairs are MKR/ETH with Uniswap/Sushiswap having the deepest pools:
With LM incentives from our end, I think that we could easily become the deepest pool for the MKR token.
Volume wise, the daily average for the last 30 days on the top three pools have done roughly ~3.8M in combine volume:
In the DeFi space the MakerDAO protocol is consistently ranked in the top 10 by TVL in its platform:
The MakerDAO project is one of the oldest in the DeFi space and has been around since 2014. SCD (single collateral dai) was launched in 12/17 and was later succeeded by MCD (multi collateral dai). The DAI stablecoin has played an important role in DeFi and currently has a 3B Supply.
The MakerDAO community tends to be very risk adverse and I think that Bancor has a chance to capture their users over to our platform since we are more attractive (single sided liquidity, IL protection) than other AMMs. If we start building a relationship with the MakerDAO community then potentially in the future they might reciprocate and onboard BNT as a collateral type to the Maker Protocol.