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MakerDAO Token Holders’ Vote Could Increase Fee For Ethereum-based Stablecoin

A weekly developer call of the MakerDAO, the open-source developer group of decentralized, ETH-backed stablecoin DAI, came to the understanding that the coin’s dollar peg was reaching its “breaking point” due to a lack of organic demand. Concerns at the meeting mostly revolved around the DAI’s ability to hold its peg at a time when […]

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A weekly developer call of the MakerDAO, the open-source developer group of decentralized, ETH-backed stablecoin DAI, came to the understanding that the coin’s dollar peg was reaching its “breaking point” due to a lack of organic demand.

Concerns at the meeting mostly revolved around the DAI’s ability to hold its peg at a time when there’s a speculative drop in its market value.

It is this concern that saw the founder of MakerDAO Rune Christensen suggest that stakeholders vote to determine whether the team should hike the fees for the dollar-pegged coin and in the process help resolve issues surrounding its liquidity.

MakerDAO launched the poll on Monday, in which holders of the MKR governance tokens are expected to vote on the question of the “Dai Stability Fee.” The vote will be to determine whether the fee should be raised from 1.5 percent to 3.5 percent.

As well as other stablecoins in the crypto space, the DAI has seen fluctuations in its prices over most of 2019, with data at XBT.net showing that prices have so far dropped to $0.98 or risen to $1.02.

While DAI has remained consistent enough on Coinbase Pro and Bitfinex at about $0.98 since January, the bouncing seen on the global markets is a cause for concern.

MakerDAO’s risk management lead Cypress Younessi said during a public call that although the dollar-pegged token was giving a “good deal,” the pressing concern at the moment is to get the price locked at least until the right kind of stability in fees is reached.

Last month, MKR holders voted twice to increase the fee by 0.5%, but according to an official Reddit post, that increase had a “negligible” impact on correcting the difference between the stablecoin’s value and the peg.

As such, the project’s risk team felt there needed to be an increment of 2% “until the trend in the peg has been corrected.”

Increasing the fee isn’t going to impact just MakerDAO, but several other applications that rely on the increasingly popular stablecoin’s value and fee, including Gitcoin that regularly denominates and pays its bounties in DAI coins.

Other applications that leverage the DAI as their primary medium of transactions are payment channel platforms. An example is the Connext Network which is soon launching its mainnet on the Ethereum platform.

Collateralized DAI

At the moment, MakerDAO smart contracts have seen users lock over 2 million ether tokens, with these accounting for about 2 percent of total ETH supply.

However, increased adoption for the DAI token continues to occur via “collateralized debt positions” (CDPs), which requires that a user’s locked ether be three times the amount of DAI they wish to withdraw.

As a stablecoin withdraw-able for fiat, the DAI token has become extremely popular with ETH holders who want loans to pay off bills.

But this has had a broader effect in destabilizing the network- principally due to the spike in loan demands that does not correspond to the demand for DAI for organic purposes.

MakerDAO has noted that the widening gap brought about by this scenario has seen contributors and employees look to increase the token’s use cases.

Some of the new usages happen behind the scenes at companies that offer crypto-financial services when handling backend value transfers.

Allegedly, most people who hold the stablecoin end up liquidating it within an hour or so of possessing it. But perhaps this is directly related to another problem impacting ether collateral in DAI CDPs.

For instance, a CDP will automatically liquidate when ETH prices decline to value below 150 percent, but even that doesn’t guarantee that a user will recoup all of their collateral.

MKR Token holders

A spokesperson for MakerDAO revealed that only those individuals and entities that hold MKR tokens would have the opportunity to vote, mainly on matters relating to the addition or removal of data sources.

Under current circumstances, the power to vote is a crucial aspect given the debate regarding an increment in the stablecoin’s debt ceiling.

If markets drop significantly, then liquidating ether collateral becomes a necessity, although Christensen maintained that this was only “hypothetical” and a “worst-case scenario.”

Still, it remains to be seen how many MKR holders will participate in the latest vote, given that those who voted in the last two rounds were less than 10 percent.

The DAI needs a diverse ecosystem of token holders and other stakeholders to pull together for it to make it in the industry. However, therein lies a problem as a majority of the tokens are owned by very few people.

For instance, Etherscan shows that the top three holders of the token control 55 percent, with one of this owning roughly 27 percent. a16z fund’s Andreessen Horowitz owns 6 percent, while hedge fund 1confirmation also has a significant amount of MKR tokens.

While the rest of the top 10 holders haven’t been publicly listed, the trend is that most MKR is in the hands of very few people. ConsenSys and the Ethereum Foundation are also thought to hold significant portions although information to that effect isn’t available.


Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.

Source link: MakerDAO Token Holders’ Vote Could Increase Fee For Ethereum-based Stablecoin

Source: https://xbt.net/blog/makerdao-token-holders-vote-could-increase-fee-for-ethereum-based-stablecoin/

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How Binance is strengthening its hold on Bitcoin, altcoin derivatives markets

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Binance Futures was launched a year back and today, as per CoinGecko’s ranking of top derivative exchanges, it stands third. The exchange has been popular among users due to its active listing of in-demand products like Chainlink [LINK] quarterly 1225 coin-margined contracts with leverage of 75x. At the time, LINK wasn’t being significantly affected by the falling market, with LINK’s charts showing a degree of recovery instead.

Binance Futures launched Coin-Margined Futures only in Q2, offerings that allowed settlement in cryptocurrencies, instead of cash. The cryptocurrencies that made it to the coin-margined quarterly 0925 contracts were Bitcoin [BTC], Ethereum [ETH], Cardano [ADA], and Chainlink [LINK]. Now, these quarterly contracts are expiring on 25 September.

Source: Binance

With the impending expiry and settlement looming closer, Binance Futures have announced that it will list BTC, ETH, ADA, and LINK coin-margined quarterly 0326 Futures contracts on the same day at 08:00 AM [UTC].

The coin-margined quarterly 0925 Futures contracts included the aforementioned coins, with no other major crypto-asset listed. However, coin-margined perpetual Futures contract included Binance’s native coin Binance coin [BNB], along with Polkadot [DOT], both cryptos that also attracted great interest from users.

Binance’s keen eye

Binance has been making use of the market momentum associated with a project by listing their tokens and beating the competition. The most recent instance was when it listed Uniswap’s UNI token within 90 minutes of its launch, followed by the launch of UNI USDT-Margined perpetual contract with up to 50x leverage. The users were able to benefit from the rallying market, especially when the remaining market was undergoing consolidation.

Such a pro-active listing of coins has pushed Binance Futures YTD trading volume to $1 trillion. The exchange witnessed a month-on-month increase of 74% in August, which was equivalent to $184.6 billion, in volume. It was also the highest holder of daily Bitcoin Futures trading volume. However, interestingly, according to the VP of Binance Futures, Aaron Gong, altcoins accounted for about 40% of the exchange’s volume.

With Binance Futures slowly taking over like the Binance exchange in terms of trading volume, other derivatives exchanges may want to pick-up their game.

Source: https://eng.ambcrypto.com/how-binance-is-strengthening-its-hold-on-bitcoin-altcoin-derivatives-markets

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Israeli Draft Bill Would Nix Hefty Capital Gains Taxes on Bitcoin

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Israeli bitcoiners take note: a handful of Knesset members are seeking to ease Israel’s hefty taxation of cryptocurrencies.

Four Knesset members from the nationalist Yisrael Beiteinu party on Tuesday introduced a draft bill that would effectively end Israel’s 25% capital gains tax on bitcoin by redefining certain “distributed digital currencies” as currency, instead of a taxable asset.

Source: https://www.coindesk.com/israel-bitcoin-tax

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Robinhood App Supports Screen Widgets on iOS 14

Robinhood widgets can be pinned to the home screen in various spots and sizes, allowing for many different layouts.

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Robinhood’s application for iPhone has received a notable update today after Apple introduced ‌the concept of Home Screen‌ widgets in iOS 14, which provide information from apps at a glance.

As announced on the free-commission app’s blog, Robinhood widgets now allows users to check on their portfolio, holdings, and more, without having to tap into the app.

The Most Diverse Audience to Date at FMLS 2020 – Where Finance Meets Innovation

Robinhood widgets can be pinned to the home screen in various spots and sizes, allowing for many different layouts. Users can also place their investment app next to other everyday apps or create an entire screen with their favorite Robinhood destinations.

Updates bring many exciting features to the app users on iPhone, iPad, and Apple Watch devices. Specifically, Robinhood’s new widgets enables users to track their investments, gain additional insight into their investing habits and view the information about portfolio, holdings, specific stock symbols, among many others.

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Apple users around the world have been busy customizing their screens and sharing screenshots for the “widget gallery” where they can easily add and customize favorite apps. Prior to the latest OS version, users were only allowed to have their apps in a grid of boxes.

Despite the relative lack of 3rd party widgets at iOS 14 initial launch, some of top brands and tech giants have already released widget support. Investment apps, however, were notably absent from the early supporting apps on day one though, over time, widget support will be a standard feature for a large number of apps.

Just yesterday, Robinhood has reportedly closed a new round of capital, having raised an additional $460 million in an extension of its Series G round. In August, the quickly growing stock-trading app announced a $200 million Series G funding led by D1 Capital Partners and putting its valuation at $11.2 billion.

Robinhood has also made multiple changes to its options trading products, part of the improvements the app promised to do after one of its customers died by suicide thinking he incurred losses of over $700,000.

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