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Smart Contract, Infrastructure, Cryptocurrency

MakerDAO

MakerDAO - stablecoin and lending platform

Rating: 3.6

Official contacts
Location: Santa Cruz, California
Web-resources:   Whitepaper Website
Social networks:
Product source tracking: https://github.com/makerdao
Details Description Risks Full analysis Team

Detailed review

Stage of product development
https://cdp.makerdao.com/


Token description
ICO date
TBA
Token price
N/A
Platform
Ethereum
Blockchain
Ethereum
Token distribution date
N/A
Consensus method
Escrow
N/A
ICO currencies
Bounty camping
N/A
Markets
N/A
Token functions
Stablecoin (Dai), Governance and debt fee distribution (MKR)
Risks
MARKET

- Strong competition and available alternatives on the market

 

PRODUCT

- Tough and long product development process with some changes

- Complicated infrastructure designed

BUSINESS MODEL

- Complicated token structure

 

FINANCES

- Investment is not available

TEAM

- 68 members in the team

- Uncertain corporate structure

Full analysis
Market

The stablecoin area is a tough segment on the blockchain market with lots of projects. The interesting thing is that everyone is applying technically different ideas. All of them are on the development stage and USDT still remains a benchmark of stablecoin for the crypto community allowing to evaluate other crypto assets in USD. The idea behind USDT is well known and its simplicity significantly contribute to the trust. MakerDAO chooses the other path – the team is developing the complicated system with the difficult governance incentives. For now both tokens (MKR and Dai) are available, but the system remains risky for investors due to unsustainability and unpredictable governance.

 

Product

The team names the project as a mixture of stablecoin, collateral loans, and decentralized governance. Generally speaking, Maker is a smart contract platform on Ethereum applying the system of Collateralized Debt Positions to stabilize the value of it token. Collateralized Debt Positions are smart contracts holding collateral deposited and generating Dai tokens with debt accrued. A user must pay back Dai tokens with debt to access his collateral back. CDPs are designed to have collateral higher in value than the value of debt.

Monetary regulation here will help to stabilize the price to USD. Other mechanisms are the subjects of change and have been added and removed.

Stability is designed to allow businesses to use crypto with no risk of volatility. The Stablecoin is backed by collateral and is chained with US Dollar. Loans will help to manage liquidity on transparent conditions and trade on margin.

The model is well described in Whitepaper and include some additional details approving system stabilization. On the other hand, the system itself may appear complicated for an average user.

Also, the team attach a Purple Paper diving into technical issues of the platform and the stablecoin. It is detailed and well structured.

The project is under development for more than a year and demonstrate significant moving forward with MKR and Dai already issued. Roadmap is tracked on https://makerdao.com/pipeline-overview/ .

 

Business model

Maker ecosystem includes two tokens: Dai and MKR. A user leverages ERC-20 tokens to generate Dai tokens (ERC-20). The user must pay back the collateral value, debt and fees accumulated (fees are only paid in MKR tokens). Maker regulates debt terms in the platform to achieve the price target. MKR token holders contribute to the system governance (they manage the risk of the Dai Stablecoin System by voting on Risk Parameters). Also, MKR tokens serve as a backstop in the case of insolvent CDPs.

MKR holders get rewarded for holding MKR from CDP debts.

The first collateral available will be PETH – ETH alternative resulting from depositing ETH to Maker platform.

MKR and Dai are issued, and their statistics is available.

Finances

The project has raised funds and does not require additional contributions. The project was backed by Andreessen Horowitz (15M USD).

MKR token is already traded since December 2017 on OKEx, KuCoin and some other exchanges. Current marketcap is 278M USD – Top25 currency. Dai is also traded with 55M USD capitalization.

Team

The team includes 68 member that is obviously too much for a startup on this stage. Some positions are strange to be strong priority for the project. Developers are strong and have relevant experience of more than 4 years each. Senior management staff is also experienced enough with strong BD and finance expertise.

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