About MKR
1. Summary of development in recent years: $MKR
MKR is a project launched in 2015. Inspired by the creativity of BTS, the project was launched in 2015. Then the token was launched in early 2017. Before 2019, Maker was a single-collateral stablecoin SAI. After realizing the limitations of single collateral, it began to transform itself into a multi-collateral stablecoin DAI in 2019.
You can think of Maker as a stablecoin project or a lending project. However, the development concept of Maker is different from that of ordinary lending protocols. Maker is more like a central bank. Its biggest vision for lending is to promote its own currency, Dai: while lending protocols like Aave are most important for matching market liquidity, improving capital utilization, and making money from the price difference, just like commercial banks.
Every project has to go through various hardships to survive in the market. Maker experienced the self-explosion on March 12, 2020 (Dai depegging), faced book losses, and issued additional MKR to remedy the situation. In 2021-2022, it faced strong competition from Luna. The two founders often ridiculed each other on Twitter, and even cursed at each other. At that time, Dai was called an antique by the Luna community, and Maker founder Rune directly called Luna a scam.
#makerdao From 2017 to 2020, it took years and the circulation
None of them could exceed 100 million US dollars. But with the help of DeFi, the issuance of Dai quickly increased by 100 times in 2 years to more than 10 billion US dollars. Today, after 2 years of bear market, Dai is still doing well, maintaining an issuance of 4.4 billion US dollars, ranking third behind centralized stablecoins such as USDT (83 billion) and USDC (27 billion). Maker's protocol income is actually good, and it is one of the few projects that maintains a positive return on DAO.
The founder has been selling LDO and buying his own MKR in the past six months, which has given retail investors in the market great confidence. The founder dares to buy his own project tokens instead of constantly reducing his holdings. This is the true belief of entrepreneurs.
2. MKR’s growth potential:
《1》The arrival of the endgame plan
In the community Endgame plan, MakerDAO will be split into 5-6 project teams, and each team will choose to issue coins to raise funds to reduce the development expenses of MakerDAO. One of the things that MakerDAO has always been criticized for is that their annual developer salary expenses have reached tens of millions of US dollars. In addition to reducing MakerDAO's expenses, Endgame's plan is more importantly to transform MakerDAO from a stablecoin project to a DeFi universe running around MKR and DAI, and start engaging in lending, LSDFI and other businesses. The last step of Endgame is for MakerDAO to become a dedicated DeFi application chain.
《2》RWA (real assets on the chain)
The recent rise of makers comes from the fact that they are using the excess in the treasury
Funds are used to purchase US bonds, so that DAI holders can be distinguished from USDC and USDT holders and can start to obtain interest income from this part of US bonds (5% per year). The reason why the issuers of USDC and USDT make so much money is that when we exchange real US dollars with them for stablecoins, they use these US dollars to buy financial products like US bonds and earn interest of 83 billion US dollars, 5% per year. Just think about the income level of the issuers.
The new move by Maker is likely to bring about drastic changes in the stablecoin market. Holding dai for deposits will earn you better interest, while holding usdt and others will earn you basically no interest. Which one do you want to hold? Maker's purchase of U.S. Treasuries is actually a disguised form of putting external traditional assets on the chain.
3. Limitations of mkr:
The inefficiency of over-collateralization has always been one of the reasons why on-chain stablecoin projects have been criticized. Centralized stablecoin institutions such as BUSD and USDC can quickly reach tens of billions of dollars in 2-3 years, but DAI can only grow slowly, like a chicken pecking at rice grains. Therefore, whether we can break through this limitation and come up with a collateral generation method that is both efficient and secure is the key factor for decentralized stablecoins to achieve orders of magnitude development. If Maker does not have a better way to generate stablecoins, then its development can only be gradual and follow the average growth rate of the industry.
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