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MakerDAO Proposes New DAI Ceiling After Hitting $100 Million Cap

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The MakerDAO loan system, administered by the Maker Foundation, hit its debt ceiling Wednesday with roughly $100 million worth of the stablecoin DAI issued and more than $339 million worth of ethereum locked up as collateral.

On Thursday, the Maker Foundation proposed a new debt ceiling of 120 million DAI, which will now be voted on by holders of MKR governance tokens.

“MakerDAO has hit that limit and no more [DAI] can be generated until that debt limit is increased,” Maker Foundation president Steven Becker told CoinDesk.

This follows the previous raise in 2018, which doubled the DAI debt ceiling from 50 to 100 million stablecoins.

Despite the platform’s rapid growth, Becker said the nonprofit’s employees don’t have any statistics or insights into which demographics are taking out these cryptocurrency loans. Whoever they are, LoanScan tallied users conducting 35,919 transactions over the past month alone.

Back in July, the MakerDAO Foundation’s Joe Quintilian told CoinDesk he “wouldn’t be surprised” if the first $3 million loan was issued by 2020. As of November, there are at least five loans exceeding that amount, including two loans over $8 million each.

These loans don’t have fixed interest rates. Michael McDonald, creator of DAI analytics site mkr.tools, said in July that raising the debt ceiling might require a higher “stability fee,” the interest rate users must pay when they close out their DAI loans.

The stability fee fell from over 18 percent this summer to 5.5 percent today. The majority of the 35 voters who participated in a poll this week voted to raise the rate again to 9.5 percent. However, Thursday’s MakerDAO Foundation proposal to boost the debt ceiling to 120 million DAI also put a 5 percent stability fee back up for a vote.

Borrowers will have to pay whatever fee these voters decide on if they want to reclaim their collateral. Voter turnout remains low (just 1.97 percent of MKR holders participated in this week’s vote), perhaps in part because MKR tokens cost around $612 each.

Andreessen Horowitz’s crypto-centric fund holds 6 percent of those MKR tokens, with Polychain Capital and 1confirmation also holding significant amounts and nonprofit board seats. The MakerDAO Foundation has 85 contracted employees, Becker said. Furthermore, the system’s underlying ethereum backbone is being reconstructed, a project called Eth 2. Becker said it’s too soon to say when or how the system will migrate to the new blockchain, although mutual compatibility is the plan.

“The impact that we plan should be negligible and very much manageable,” Becker said of the ethereum upgrade.

Maker holder and DAI tinkerer Taylor Monahan, CEO of the wallet startup MyCrypto, told CoinDesk she is concerned there aren’t enough open discussions about the risks involved with decentralized finance [DeFi].

“Let’s be upfront about what the risks actually are, rather than say they are so minimal,” she said, adding:

“We can’t just let [growth] overshadow the fact that there are unintended consequences and unmitigated risks.”

The risks

One risk: These loans automatically liquidate if the price of ether drops below a designated point (which varies depending on the loan).

As of Nov. 18, MakerDAO will switch to a multi-collateral system, where users can put cryptocurrencies beyond just ETH into the DAI system. For starters, the system will only support one other token, BAT. Becker told CoinDesk OmiseGo is another prospective token being considered. Each type of token collateral will face prospective liquidation according to its own price feeds.

One aspect of the current MakerDAO migration that troubled Monahan is calling the collateral process a “vault,” as if the ether collateralized to issue DAI was stored for safekeeping with no further action required on behalf of users. (The previous name for taking out a DAI loan was “collateralized debt position.”)

Becker said there will be ample materials instructing users on how to transfer their loans from the current system to the multi-collateral system later this month. It could be as simple as pressing a button and indicating consent, he said, depending on the users’ platform of choice.

“Like any migration, you’ll have a dual system running until some time has passed,” Becker said, adding it’s not yet clear what will happen to loans that haven’t moved over by this time next year.

Monahan said she’s excited about the growing DeFi ecosystem, but that it also reminds her of the Decentralized Autonomous Organization [DAO] hack in 2016, where millions of dollars worth of tokens were stolen and the entire ethereum blockchain was reorchestrated to restore lost funds.

“I kind of hope we don’t do the same exact thing. Let’s talk about [risks] before this gets too big,” she said, adding she hopes people are exploring every possible way this could impact users.

Source.coindesk

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Ethereum

Ethereum (ETH) Stuck In Range While Bitcoin Is Sliding

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  • Ethereum price failed to continue above $190 and declined below $188 against the US Dollar.
  • The price is currently correcting higher, but it is likely to face resistance near $187-$188.
  • There is a connecting bearish trend line forming with resistance near $187 on the hourly chart of ETH/USD (data feed via Kraken).
  • Bitcoin is trading with a bearish angle below the $8,950 and $9,000 resistance levels.

Ethereum price is trading in a broad range versus the US Dollar, while bitcoin is struggling. ETH price might revisit the $182 range support area in the near term.

Ethereum Price Analysis

Yesterday, there was a decent increase in Ethereum above the $188 resistance against the US Dollar. ETH even surpassed the $190 resistance area and the 100 hourly simple moving average.

However, the price struggled to gain strength above $190 and formed a high near the $192 level. Later, there was a downward move below the $188 support area and the 100 hourly simple moving average.

Moreover, the price traded below the 50% Fib retracement level of the upward move from the $180 swing low to $192 high. The bulls even failed to defend the $185 support and the price tested the $183 area.

Ethereum is currently correcting higher and trading near the $186 level. Additionally, it is trading near the 23.6% Fib retracement level of the recent decline from the $192 high to $184 swing low.

On the upside, an immediate resistance is near the $187 level. More importantly, there is a connecting bearish trend line forming with resistance near $187 on the hourly chart of ETH/USD, coinciding with the 100 hourly SMA.

If there is an upside break above the trend line and the 100 hourly SMA, the price could test the $188 resistance area. Any further gains may perhaps push the price towards the $192 swing high in the near term.

Conversely, the price could decline further if it fails to clear the $188 resistance. An immediate support is near the $184 level. The main supports are near the $182 and $180 levels, below which the bears are likely to gain strength.

Ethereum Price

Ethereum Price

Looking at the chart, Ethereum price seems to be trading in a broad range between $180 and $190. A successful close on the either side could trigger the next move. As long as there is no daily close below $180, there are chances of a fresh increase towards $200 and $205.

ETH Technical Indicators

Hourly MACD – The MACD for ETH/USD is about to move into the bullish zone.

Hourly RSI – The RSI for ETH/USD is currently rising and it is likely to clear the 50 level.

Major Support Level – $182

Major Resistance Level – $188

Source:newsbtc

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Ethereum

Ethereum (ETH) Stuck In Range While Bitcoin Is Sliding

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on

  • Ethereum price failed to continue above $190 and declined below $188 against the US Dollar.
  • The price is currently correcting higher, but it is likely to face resistance near $187-$188.
  • There is a connecting bearish trend line forming with resistance near $187 on the hourly chart of ETH/USD (data feed via Kraken).
  • Bitcoin is trading with a bearish angle below the $8,950 and $9,000 resistance levels.

Ethereum price is trading in a broad range versus the US Dollar, while bitcoin is struggling. ETH price might revisit the $182 range support area in the near term.

Ethereum Price Analysis

Yesterday, there was a decent increase in Ethereum above the $188 resistance against the US Dollar. ETH even surpassed the $190 resistance area and the 100 hourly simple moving average.

However, the price struggled to gain strength above $190 and formed a high near the $192 level. Later, there was a downward move below the $188 support area and the 100 hourly simple moving average.

Moreover, the price traded below the 50% Fib retracement level of the upward move from the $180 swing low to $192 high. The bulls even failed to defend the $185 support and the price tested the $183 area.

Ethereum is currently correcting higher and trading near the $186 level. Additionally, it is trading near the 23.6% Fib retracement level of the recent decline from the $192 high to $184 swing low.

On the upside, an immediate resistance is near the $187 level. More importantly, there is a connecting bearish trend line forming with resistance near $187 on the hourly chart of ETH/USD, coinciding with the 100 hourly SMA.

If there is an upside break above the trend line and the 100 hourly SMA, the price could test the $188 resistance area. Any further gains may perhaps push the price towards the $192 swing high in the near term.

Conversely, the price could decline further if it fails to clear the $188 resistance. An immediate support is near the $184 level. The main supports are near the $182 and $180 levels, below which the bears are likely to gain strength.

Ethereum Price

Ethereum Price

Looking at the chart, Ethereum price seems to be trading in a broad range between $180 and $190. A successful close on the either side could trigger the next move. As long as there is no daily close below $180, there are chances of a fresh increase towards $200 and $205.

ETH Technical Indicators

Hourly MACD – The MACD for ETH/USD is about to move into the bullish zone.

Hourly RSI – The RSI for ETH/USD is currently rising and it is likely to clear the 50 level.

Major Support Level – $182

Major Resistance Level – $188

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Analyst: Ethereum Still on Track for Move to $260 as Network Activity Spikes

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Ethereum has been closely tracking Bitcoin’s price action over the past several days and weeks, and this correlation has persisted when ETH dropped overnight as BTC was met with significant selling pressure within the lower-$9,000 region, which subsequently sent it reeling down to $8,700.

Bitcoin’s current bearishness has caused Ethereum to show similarly bearish signs, although one analyst is still holding strong that ETH is on track to surge as high as $260 in the near-term.

Ethereum Fails to Break Above $190 as Crypto Markets Face Increasing Selling Pressure

At the time of writing, Ethereum is trading down nominally at its current price of $187, which marks a slight retrace from its daily highs of over $190 that were set yesterday alongside Bitcoin’s surge to $9,300 – which proved to be short-lived as BTC has since retraced to $8,700.

Despite showing signs of some bearishness on a short time frame, it is imperative to note that Ethereum has climbed significantly from its one-month lows of under $160 that were set in late-October concurrently with Bitcoin’s drop to lows of $7,300.

ETH rapidly surged shortly after setting these lows, with its gains being fueled by BTC’s meteoric rally that sent it as high as $10,600 before it retraced back into the $9,000 region.

One bullish factor that could provide Ethereum’s bulls with some ammunition in the mid-term is the fact that the cryptocurrency’s network activity has been incredibly strong as of late, with its total daily gas used hitting an all-time-high this past September.

“Yesterday, the Ethereum network processed the most activity in its history,” one popular figure within the Ethereum community noted in a tweet from September.

Will ETH Target $260 Next?

As for where this underlying fundamental bullishness could send ETH’s price, one popular cryptocurrency analyst believes that Ethereum is currently on track to visit $260 next.

Josh Olszewicz, a well-respected analyst on Twitter, explained that ETH will be “good to go” towards this price target once it breaks above the resistance it currently faces between $188 and $198.

“1D $ETH: 404: volume not found. e2e continues to grind towards inevitability. should b g2g past res of 188-198. hf scheduled dec 4th,” he explained while referencing the chart seen below.

In the near-term, it is probable that Ethereum’s price action will largely be guided by that of Bitcoin, but assuming that BTC finds some stability or even some tempered upwards momentum, then investors may watch ETH post significant gains.

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