Maker raised $5.3 million in MKR coins in an auction to restore the DAI deficit as we are about to find out more in the MakerDao news.
Maker raised the money to negate the Dai deficit that was caused by ‘’Black Thursday’’ but despite the successful auction, MakerDAO still faces a hard time ahead to regain the users’ trust after the harsh market conditions during March. After the auction, the MakerDAO raised enough money to negate the protocol’s debt since the Free collateral auctions on the ethereum network congestion period were the ones that caused the deficit in the first place.
The auction that was conducted by the MakerDAO platform was meant to sell the MKR tokens to anyone that wanted to bid the highest for it. if more bidders took part in the auction, trying to secure some coins would have been a signal that the investors still trust the ability of the platform to dominate DeFi. Paradigm which is a crypto-based investment firm and MKR holder announced that they won 72 of the 106 auctions which represent 68% of the total number of actions. The Block also found that the Maker Foundation won 33 rounds of the auction.
This means that Paradigm and the Maker Foundation won 105 out of 106 auctions together leaving only one auction left. We still don’t know if both entities bid to win the auctions aggressively or if nobody else was willing to match their bid prices. There were 33 unique addresses that bid in the MKR auction and many of them belonged to a single entity. The last auction received a bid for 3,090 DAI per MKR while the second signs were that the confidence in the system had not returned yet.
Since March, DAI Dropped below $1 and has traded between the $1.01 and $1.04 levels ever since. This provides unique arbitrage opportunities but it is also risky since a stablecoin that doesn’t follow its peg is unhelpful. MakerDAO governance actions aim to incentivize the users to sell DAI in the open market and to restore the parity but failed to generate meaningful results. The governance is now in the hands of MKR holders since the Foundation transferred the totality of its power to the token.
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