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Will pivoting back to Ethereum [ETH] help in addressing climate change?

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The Ethereum blockchain is one of the robust infrastructures ever created by humans. According to the Founder of MarkerDAO, Rune Christensen, circling back to the DeFi protocol’s reliance on the Ethereum blockchain and its native token, ETH may help in reaffirming its commitment to decentralized collateral. and subsequently, address climate change concerns.

In the latest blog post, Christensen described Ethereum as a blockchain that was built for human coordination and resilience. With dire implications of climate change being intensifying global conversation, the exec asserted that Ethereum blockchain may facilitate financial markets to coordinate on mitigation. He also went on to add that it will continue to function even during large-scale disasters.

“Finally we need to double down on our roots of decentralized collateral, in particular, solidify our fundamental commitment to and reliance on Ethereum and the ETH token. The Ethereum blockchain is built for human coordination and resilience. As the world is forced to deal with the impacts of climate change, Ethereum will enable financial markets to coordinate on mitigation, and it will continue to function even during large-scale disasters.”

MakerDAO’s Ethereum Strategy

One of the major reasons for Bitcoin’s [BTC] price tumble was due to the age-old debate of its impact on climate and the environment. Hence, the Ethereum network’s environmental efficiency after the much-anticipated transition to Proof-of-Stake [PoS] from Proof-of-Work [PoW] with the 2.0 upgrade is expected to be a gamechanger. According to the MakerDAO exec, ETH will become a sustainable contender to BTC’s present position as the market leader.

It is important to understand that, MakerDao’s users are required to deposit cryptocurrency to collateralize minting of the DAI stablecoin. Even as the protocol was built on top of the ETH blockchain and supported ETH exclusively as collateral, it later expanded to other assets such as USDC, Wrapped Bitcoin [WBTC], as well as Basic Attention Token [BAT].

However, MakerDAO’s latest collateral strategy to accumulate more Ether as collateral indicates the rising confidence of the 2.0’s aftermath. In addition, the exec also highlighted accumulating more collateral derived from ETH like LP tokens or ETH collateralized assets. Christensen also stated that holding ETH directly as protocol reserves is yet another option that Maker can adopt in a bid to “both directly support, and directly benefit from its ecosystem.”

DeFi lender MakerDAO Finally Transitions To Complete Decentralization

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Prominent Ethereum-based DeFi lending pioneer and stablecoin protocol MakerDAO’s plan to achieve full decentralization is in its last leg. The platform has announced that it is at the last stage of dissolving its foundation on the path to complete decentralized governance.

While declaring that the MakerDAO is now completely decentralized, Rune Christensen, the CEO of Maker Foundation, stated in a blog post that the Foundation will formally dissolve within the next few months and that the DAO is now fully self-sufficient.

“With several Core Units approved by governance to efficiently organize all areas of work within the DAO and the global community now responsible for every aspect of the Maker Protocol, the DAO is now fully self-sufficient and the Maker Foundation has fulfilled its bootstrapping responsibilities.”

The complete decentralization of Maker implies that the future development and operation of the Protocol and the DAO will be in the hands of the community engaged.

Quick take on MakerDAO’s rise to prominence in DeFi realm

Christensen had introduced the first iteration of Dai, then called the eDollar, on Reddit back in March 2015. Two years later, the MakerDAO developers launched and started to use the first version of Dai, dubbed ‘ProtoSai,’ which marked the first limited release of the Dai Stablecoin System and was a forerunner to the public launch of Single-Collateral Dai [SAI] several months later. In December 2017, the Sai white paper was published followed by the launch of Single-Collateral Dai.

In 2018, the DeFi foundation published its proposal that described the core principles for sustainable decentralized governance. The very next year, Multi-Collateral Dai was launched. In 2020, the MKR token contract was transferred to Maker governance, after which the token holders were presented with full control of the MKR contract. Maker Improvement Proposals [MIPs] framework was approved two months later which included MIP0 and two MIP sets.

Since then, the DeFi protocol has indeed come a long way. Recounting the milestones, the MakerDAO’s exec said,

“The global Maker community is now responsible for every aspect of the Maker Protocol and the DAO. I’m so proud of what we’ve done and what it signifies.”

Makerdao Collateral Liquidation Amounts for WBTC Hits New ATH

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The price of Bitcoin and other top altcoins is now down a significant percent so far this month. If the current momentum persists then this could be Bitcoin’s worst month in over three years.

Since major digital assets shed a large amount of value on the spot market, this triggered a slew of corresponding positions, such as bullish bets in the form of derivatives and loans, that spread out at a rapid pace. This can potentially extend the bearish impetus.

In the latest development, the cryptocurrency analytic platform, Santiment revealed that Makerdao’s collateral liquidation of Wrapped Bitcoin [WBTC] has surged to a new all-time high that too by a significant margin. The tweet read,

“Liquidations have been quite plentiful over the past few days, as $BTC and $ETH have experienced their share of major downswings along with the rest of #crypto. Our data indicates the amount of #Makerdao collateral liquidation amounts for $WBTC are at #AllTimeHighs by a wide margin.”

SANTIMENT
Makerdao Collateral Liquidation Amounts for WBTC Hits New ATH 2

Meanwhile, the multi-collateral DAI repaid, in terms of Wrapped Ethereum [WETH] has also climbed to its highest levels since the market-wide pullback back on the 23rd of February this year.

Wrapped Ether [WETH], Ether [ETH], Chainlink [LINK], and Wrapped Bitcoin [WBTC], are some of the most volatile assets which makes them more prone to liquidations.

WBTC’s Approval as Collateral by Maker Governance

Last May, MKR holders had accepted WBTC as a new collateral asset in the Maker Protocol to leverage its greater liquidity to the Ethereum and defi ecosystems, as well as to decentralized exchanges [DEXs].

Wrapped Bitcoin went on t become the fourth collateral type approved by MakerDAO Governance, in addition to ETH, BAT, and USDC to open Maker Vaults for the purpose of generating Dai.

DeFi Market Takes a Beating Amidst Crash

The decentralized finance market has witnessed heavy liquidation and a massive reduction with respect to locked-in value as the market corrected. The total locked in the ecosystem fell by nearly 40% from its peak value established a couple of weeks back on the 11th of May 11 on which the day the figures climbed above $130 billion

The Amount of Value Locked in DeFi Just Hit $9 Billion

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DeFi is growing faster than ever

The decentralized finance economy has grown massively this year and as of the time of writing, the industry is now worth $9.017 billion, according to the on-chain data resource DeFi Pulse. Total Value Locked [TVL] essentially means the amount of money running through its smart contracts.

The industry has grown incredibly quickly with its TVL figures surging by more than 119% over the course of just one month.

DeFi

With a large portion of DeFi-based applications, tokens, and services hosted on the Ethereum network, its native token, ETH locked in it has also surged to a new all-time high of 5.229 million. This, in turn, has reignited bullish projections in terms of ETH’s price which stood at $404, at the time of writing.

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Race for first place in DeFi’s TVL intensifies

Recently ousting Maker for the position of the biggest DeFi protocol was Aave [which was previously known as Ethlend] with a dominance of 18.98% over the last 24-hours as its TVL [USD] reached $1.71 billion. One of the significant factors of Aave lending protocol outpacing previous front runners was its LEND token which soared more than 4500% since the beginning of the year.

Adding to the surging popularity was the recent development of the issuance of a license to Aave’s U.K. business entity, Aave Limited by the Electronic Money Institution.

Meanwhile, Maker settled for the second-biggest position with $1.43 billion locked in smart contracts. Trailing not far behind was Curve protocol with a figure of $1.27 billion.

This was followed by Yearn.Finance at $956.3 million. Interestingly while it neared the coveted league of $1 billion TVL protocols, its native token, YFI recently hit a new all-time high following its listing on Aave’s platform and a hint at a partnership with the crypto-derivative platform, FTX.

Referring to the collaboration news, Founder of the project, Andre Cronje tweeted,

https://twitter.com/AndreCronjeTech/status/1299218253127069702

Total Value Locked in MakerDAO Reaches $1 Billion in DeFi’s First 

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MakerDAO is on the road to atonement after poor performance at the beginning of 2020. The total value locked in MakerDAO has reached $1 billion as its primary asset, Ethereum, skyrocketed 40% over the last week. As the first decentralized finance protocol to hit ten figures, MakerDAO has restored its position as DeFi ‘s top protocol.

MakerDAO is a credit market on open finance that allows users to securitize a couple of tokens to secure a DAI loan. The outright majority of operations on Maker involves users taking leveraged long positions on Ethereum. This is achieved by collateralizing Ethereum to secure DAI and using the DAI to purchase more Ethereum.

MakerDAO

Ethereum price surge drives MakerDAO to pole position

Ethereum ‘s recent bull-run has driven MakerDAO back to number one, outpacing Compound as the most collateralized decentralized finance protocol. Over the last week, the total figure of Ether locked in MakerDAO increased by about 300,000 ETH (about $96 million). The most recent milestone of Maker to hit $1 billion is not due to the large amount of Ethereum finding its way into the protocol, but rather to the recent appreciation of the value of Ethereum.

On July 22, the Ether DAI ceiling was increased from 180 million DAI to 220 million DAI. Notably, the DAI ceilings ensure the supply of DAI and do not project, causing the supply shocker. Five days after the DAI ceiling has been set, the amount of DAI secured against Ethereum currently stands at 218 million, and is about to reach 100% very soon.

MakerDAO

Progressive growth in the DeFi industry

Furthermore, MakerDAO is followed closely by Compound on the list of DeFi protocols with the highest value locked. Particularly, Compound has a value of $767 million locked in its protocol currently. The two are followed by Synthetix, a decentralized platform built on Ethereum, with $429 million in total value locked.

The year 2020 has been a dull one for MakerDAO and MKR investors. However, things have begun looking good as a new market cycle commences. MakerDAO can now start again and maintain its spot as the top DeFi protocol by adding a range of collateral and functionalities.