CryptoMode Maker DeFi Dai

The DeFi industry continues to grow and evolve. MakerDAO is introducing support for both KNC and ZRX as collateral types. This was voted on by community members, as they dictate the risk parameters for both tokens as well.

Expanding the Maker Protocol

In the world of decentralized finance, MakerDao is one of the household names. Until recently, it was the biggest project in the space, before it was overtaken by Compound. Despite that shift in “position”, Maker remains one of the top lending platforms on the Ethereum blockchain today.

Expanding the reach of this decentralized credit platform is crucial. Providing wider access to the Dai stablecoin will not only benefit the platform, but also those users who feel left out otherwise. With the generated Dai, users can explore everything the decentralized finance ecosystem has to offer today, and in the future. 

Up until recently, the number of currencies to be used as collateral remained limited. Support for Ethereum, Basic Attention Token, USDC, TUSD, and Wrapped Bitcoin makes a lot of sense.

Two new currencies are now available to use as collateral. Following the Executive Vote, both KNC and ZRX have been officially approved. KNC is the native token of the Kyber Network, whereas ZRX represents the 0x protocol. Both assets are eligible to generate DAI through the Maker Vaults system. 

Attributing Risk Parameters

When new collateral options are added to Maker, a thorough process needs to be followed. One core aspect is providing risk parameters for collateral. In the case of KNC and ZRX, the attributed risk parameters are fair.

KNC Risk Parameters

Risk Premium: 4%

Liquidation Ratio: 175%

Debt Ceiling: 5 million

Auction Lot Size: 50,000

Minimum Bid Increment: 3%

Bid Duration: 6 hours

Max Auction Duration: 6 hours

Liquidation Penalty: 13%

Dust: 20 Dai

ZRX Risk Parameters:

Risk Premium: 4%

Liquidation Ratio: 175%

Debt Ceiling: 5 million

Auction Lot Size: 100,000

Minimum Bid Increment: 3%

Bid Duration: 6 hours

Max Auction Duration: 6 hours

Liquidation Penalty: 13%

Dust: 20 Dai

Increasing the appeal of DeFi solutions will remain a top priority. Various currencies have seen a hefty increase in dormant supply, While that means users aren’t liquidating their assets, they also miss out on potential earnings through DeFi and other solutions. Giving users a choice is always better than only having one option on the table. 

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