MakerDAO revenue analysis: Who is the biggest beneficiary? | link 268slot login, game slot online mustang303, foto ninja 4 tak terbaru

Who is the biggest beneficiary in the MakerDAO network? Keeper and PETH holder. According to the analysis of this article, MKR holders only captured a small part of the value. This situation, coupled with MKR's special gaming mechanism, determines that it is a slow-starter. For investors with high liquidity requirements and fast returns, it may not be the best choice according to the current rules. However, for the MakerDAO project, the stability of DAI is its top priority, which is also the foundation of its long-term development. Patience is what is required in the MKR game. The author of this article, Marc-André Dumas, comes from medium and was translated by "Leo" from the "Blue Fox Notes" public account community.

How much value is created and how is it redistributed?

Decentralized autonomous organizations do not publish financial statements or quarterly reports. Why? The data is all there, available for everyone to see and review if necessary. But few people put a lot of effort into parsing and reviewing huge amounts of data, so some kind of reporting is still needed. This article mainly analyzes MakerDAO’s basic income statement in 2018.

MakerDAO launched the groundbreaking single-collateral DAI (SCD) more than a year ago. During this time, it generated revenue, including stability fees and liquidation penalties; also paid fees (discounts on liquidated collateral); wrote off losses (bad debt from liquidations and market movements); and distributed its surplus by burning MKR and PETH tokens.

MakerDAO’s SCD works in a unique way that completely ignores the structure of normal companies and accounting standards. Therefore, it is difficult to formally classify MakerDAO smart contract transactions. While the classification is certainly open for discussion, it would be useful to understand both the inner workings of SCD and the value proposition of MakderDAO.

Method

A list of all transactions calling various SCD and MakerDAO contracts is generated using a custom data scraper used to parse the Ethereum blockchain. Reimbursement and bite transactions are of particular interest. After that, the data grows with ETH and the price of MKR is recorded through the MakerDAO oracle, which allows all amounts to be converted to DAI at the time of transaction. In other words, using DAI as the unit of account eliminates the volatility of ETH and MKR and simplifies the analysis (1 DAI = 1 USD).

2018 revenue

Stability fee

The stability fee is the interest paid by CDP holders on their DAI debt. At the beginning of 2018, the fee was 0.5%, increased to 2.5% on August 30, and then decreased to 0.5% on December 21. We can categorize these revenues into accrued stabilization fees and paid stabilization fees.

Accrued Stability Fee: The interest accumulated by CDP during this period. Accrued fees can only be collected from CDP holders when the CDP is closed.

Stable closingFixed fee: When CDP holders reimburse and close their CDP, they will pay interest on their debt.

Accrued stability fee for DAI in 2018 (calculated monthly)

As we can see in the chart above, interest rate adjustments have an important impact on MakerDAO’s stability fee income.

It is important to distinguish between accrued expenses and actual expenses. Because only part of the stabilization fee was achieved in 2018. Additionally, SCD has a feature that few people know about: MakerDAO waives accruals when CDP is liquidated. This results in the elimination of some accrued stability fees (future multi-collateralized DAI is expected to undo these eliminations).

Stability fee cancellation: Due to liquidation reasons, accrued stability fees cannot be collected from CDP holders.

Total Stability Fee for 2018

Liquidation penalty

MakerDAO’s main overlooked source of revenue is its liquidation penalties, which are not easily visible and must be paid by CDP holders. The current rate is 13%, which has not changed since its launch. The purpose of liquidation fees is to inhibit the occurrence of liquidations while covering the inefficiency costs of the liquidation process.

The bear market of 2018 brought challenges to CDP holders, and these difficulties turned into MakerDAO’s main source of income.

Liquidation penalty income in 2018 (calculated on a monthly basis)

Liquidation penalty: The amount of DAI included in the CDP balance during the liquidation period. The penalty replaces accrued stabilization fees.

Due to the limitations of SCD, most of the fees collected disappear in changes in market prices, and the incentives for keepers are also lost. To understand this, let's look at the steps of liquidation:

l CDP liquidates through a "bite transaction" to immediately clear its DAI debt in exchange for enough PETH collateral to cover the debt and liquidation fees.

l The collected collateral will be transferred to "tap”Contract

l The “tap” contract provides the keeper with a 3% discount on PETH collateral (relative to the current Ethereum price) as an incentive. If Ethereum continues to fall and there are no keeper buyers to quickly purchase the collateral, MakerDAO must write off depreciation.

lkeeper purchases PETH and returns DAI to the "tap" contract.

l DAI is required to pay CDP debt and is burned immediately. Any surplus DAI will be used for redistribution.

In 2018, MakerDAO provided a discount of 1.58 million DAI to keepers in return for their services. At the same time, 251,000 DAI was lost due to the depreciation of collateral. Overall, these operations generated a surplus of 4.25 million DAI.

Distribution of income and surplus

MakerDAO is a decentralized autonomous organization with no fees at this stage. All development, research, marketing, and legal expenses are paid for by the Maker Foundation. Since MakerDAO does not maintain reserves, all revenue and surplus will be redistributed immediately.

l Paid stability fees: These fees are paid by MKR or DAI. When fees are paid by DAI, MKR is purchased on the market and burned. Burning reduces the MKR supply, which benefits MKR holders.

In 2018, 462.81MKR was burned, worth 183,000 DAI at the time.

l Liquidation penalty: The surplus generated from the liquidation process will be redistributed to PETH holders by using DAI surplus to purchase PETH and burn it. In order to encourage the use of DAI to buy PETH, another 3% discount will be given to the keeper.

After the discount of 128,000 DAI, 21,591.48 PETH, worth 4.13 million DAI, was burned.

Redistribution of liquidation fees

Who benefits the most?

Ultimately, who benefits the most from these revenues, discounts, and surpluses? The answer may be more than most people expect.

Income and earnings distribution in 2018

Keepers and PETH holders capture a disproportionately large portion of the revenue, to the detriment of MKR holders. In single-collateral DAI, only the received stability fee is used to burn MKR, while liquidation penalties belong only to PETH holders. In addition, the inefficiency of liquidation also requires that keeper be given a significant discount to ensure that liquidation can be completed quickly.

Multi-collateralized DAI will eliminate PETH and MKR holders will benefit from liquidation, but this will be a trap if there are losses in liquidation. Additionally, liquidation fees are expected to be much lower, and the new auction process should also reduce the discounts given to keepers.

Conclusion

MakerDAO is part of a select group of DAOs capable of generating and redistributing income. MakerDAO once again sets the bar high for other DApps and DAOs.

We have seen that SCD is very inefficient in liquidating CDPs, and at the same time, is not friendly to makers and holders when it comes to redistributing earnings and surpluses. SCD is inherently temporary, so many shortcuts are taken to achieve a stable currency, putting the interests of early backers second. This is another case where the MakerDAO community needs to be patient as it focuses more on delivering revolutionary products.

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Risk warning: All articles in Blue Fox Notes do not constitute investment recommendations. Investments are risky. Individual risk tolerance should be considered when investing. It is recommended to conduct in-depth inspections of projects and make your own investment decisions carefully.

Source: Blue Fox Notes