Crypto Mining News, News & Updates

Black Thursday Victims are not paid by Maker Votes

MakerDAO traders received terrible news from the decentralized court earlier this week: they aren’t getting any money back. Their only hope now lies in traditional or centralized courts.

On the 12th of March, DeFi has experienced its worst day on record as prices have tanked by more than 50%. Among the crash, the projects that offered leverage were hit the hardest. Significantly, MakerDao and the Vault owners who use ETH as a warranty to mint DAI were removed with mass liquidations. The collateral ratios are quickly dropping below the 150% minimum threshold.

Loss amounting to 100%

As an alternative of the collateral being liquidated for a 13% haircut, the system has resulted in the shortage of keepers, which allowed one actor to acquire $6M worth of ETH for just 1 DAI.

After this event, several Vault owners have lost 100% of their collateral, leaving the system with a bad debt amounting to $2.5M. The maker has quickly recovered by hosting a series of bids where new MKR was minted and was sold for DAI to re-capitalize the system.

Ever since Black Thursday, a selected few ‘victims’ are working tirelessly on a class-action lawsuit to compensate those affected by wrongly Keeper auctions.

Last Tuesday, the hopes of the pleas that need to be resolved through the decentralized governance had come to a close with lower than the ideal outcomes. Meanwhile, a discussion with the Maker Foundation goes on, MKR holders will no longer reimburse the losses done through freshly minted tokens.

Plan for Compensation

“Vaults that were liquidated at auction or self-liquidated their positions between 3/12/2020 12:00 UTC and 3/13/2020 13:40 UTC will be considered for compensation.” Source says

The latest proposal suggests that the new MKR may be minted and distributed to Vault owners, who can prove that they were wrongfully liquidated for 100% of their collateral.

Outlined in the latest forum post, the amount of MKR to be minted was put to a poll, with the winning result moving to an executive vote to ratify the decision.

As outlined in the past forum post, the amount of MKR that was to be minted was to put to a poll, with the winning result moving to a decision-making vote to approve the decision.

0% Compensation Earned

Out of the available options, “0% compensation” has won with 65% voters who are in favor, while, next to that, having almost 17.6% was for 18% compensation.

“While the vault compensation plan didn’t pass, the ability of a protocol to consider actions beyond its core code are already kind of revolutionary,” Vault Compensation lead MonetSupply said “I’m optimistic for the future of decentralized governance.”

Choosing with Their Feet

Still, some Vault owners aren’t as sanguine, with a few of them criticizing that the poll was decided by a few large holders, and questioning the validity of this week’s vote after a separate survey showed most were in favor of compensation.

However, some Vault isn’t as confident; a few of them criticize the poll was decided by a few large holders, and then questions the validity of the week’s vote after having a separate survey that showed most that were in favor of the compensation.

“Lawsuit or not, people will vote with their feet if there is no trust,” Vault owner with the name of Gus in the forum marked. “People should take note and be wary of future interaction as Maker has proven to go against its own decisions.”

For MKR holders, the mutual theme performs to ‘know the risks’ of using leverage.

Even as Dai supply has an all-time high, DeFi’s poster child is currently going through a difficult time when it comes to community support, also at a time when it continues to slide in DeFi Pulse’s TVL Leaderboard and as well as MKR lagged, other DeFi tokens went parabolic over the summer.

Leave a Comment

Leave a Reply