After the bull market ended, MakerDAO’s problems became apparent. Many thought the company’s problems stemmed from the bear market. However, the company was attempting to solve a fundamental problem: It was trying to create a stable cryptocurrency, a product that is not easily created.
So, how did the company react? It said “to hell with it” and created a stablecoin that uses real-world assets. A stablecoin is a cryptocurrency that has a stable value. Generally, stablecoins are created to have a stable value as opposed to other cryptocurrencies.
The value of most stablecoins are tied to a fiat currency or commodity. The company created DAI, which is short for the firm’s name, the Distributed Autonomous Insurance.
This was a crucial move for the company, making it less centralized and more protectable from outside forces. The bull market has its advantages, but MakerDAO needs to implement more real-world assets to support a larger userbase and grow.
MakerDao & Real World Assets
Hexonaut said Makerdao needs to “take the next step and begin integrating with the real world at scale,” because “time is running out.”
His concept to grow Makerdao’s decentralized finance (Defi) protocol using real-world assets (RWAs) was presented on March 16 by Hexonaut, a Makerdao protocol engineer and co-founder of the software and design firm Bellwood Studios. A Makerdao proposal discusses incorporating real-world assets into CDP equations.
Revitalise the Defi systemMakerdao developer has a great idea for revitalizing decentralised finance (Defi). DAI stablecoin is issued by Makerdao, a structured finance position (CDP).
The developer of Makerdao believes now is the right time to exploit RWAs, since several competing protocols have focused on bridging them.
His plan, on the other hand, states that crypto-native yields have dried up liquidity and the initiative should “Expand to uncorrelated, high-quality loans to re-diversify the portfolio with profitable assets.”
The protocol engineer collaborated with other contributors on a Makerdao governance strategy in a post titled “Aggressive Growth Strategy” on the same day.
ShareJoin Us on Google NewsAccording to Hexonaut, the bull market was advantageous, but “time is running out” and Makerdao needs to “take the next step and begin integrating with the real world at scale.”
The Makerdao protocol engineer and co-founder of Bellwood Studios, Hexonaut, proposed using real-world assets (RWAs) to develop Makerdao’s decentralized finance protocol (Defi).
Makerdao proposes to include real-world assets as part of CDP calculations.Revitalise the Defi systemDefi, the decentralised finance system, is in need of a revitalizing idea, according to a Makerdao developer. DAI’s stablecoin is issued by Makerdao, a mechanism or structured finance position (CDP).
Makerdao’s developer believes that now is the time for Makerdao to exploit RWAs since so many competing protocols have focused on bridging RWAs.
According to Hexonaut, crypto-native yields have dried up liquidity, and the initiative should include uncorrelated, high-quality loans to re-diversify the portfolio. In a post titled “Aggressive Growth Strategy,” the protocol engineer collaborated on Makerdao governance strategies with other contributors on the same day.
His proposal states that RWAs will inevitably play a role in this project.
According to Hexonaut, a two-step capital raising strategy should be followed by “conservative” risk exposure.
Others criticized Hexonaut’s initiative as a “bad idea.”Several people felt that adopting RWAs had both advantages and disadvantages, as demonstrated by the comments that followed Hexonaut’s suggestion. A user, Psychonaut, expressed his enthusiasm for the idea of selling bonds-style assets to boost the surplus buffer.
About MakerdaoIn terms of Defi value locked, Makerdao is currently the second-largest protocol. With a market valuation of $9.5 billion, Makerdao’s DAI stablecoin is the fifth largest stablecoin. With a market capitalization of roughly $15.4 billion, UST recently overtook Terra’s stablecoin DAI in terms of market capitalization. Hexonaut has proposed that Makerdao CDP scheme include real-world assets (RWAs).
The number of CDPs across multiple blockchains is approximately 31 according to reports, with Makerdao being the largest in terms of the total value locked (TVL). Makerdao’s market capitalization reached $16.15 billion TVL in the last seven days, up 6.99 percent.
Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
