On June 28, the governing body for MakerDAO approved KNC and ZRX as collateral assets in the Maker Protocol.
KNC is the native token of the Kyber Network while ZRX is the native token of 0x. The approval of these assets came as a result of an Executive Vote by the governing members of Maker. The Executive vote started on the 15 June and ended on the 28 June.
KNC and ZKR join other assets
With this approval, KNC and ZKR will join two recently added real word assets which are based on music royalties and trade invoices. These real-world assets are ConsolFreight and PaperChain. The assets also resulted in over 20% spike in the price of MKR.
Besides, other assets used as collateral in the lending protocol include Wrapped Bitcoin, Ethereum (ETH), USD Coin (USDC), and Basic Attention Token (BAT).
As a result of this acceptance, the KNC and ZRX can help to generate Dai when they are being used to open Maker Vaults.
The Maker Community has spoken about the advantages of including KNC and ZRX as collateral assets, even before the executive vote.
In the Maker Governance Forum, several appropriate risk parameters were discussed, as it affects the tokens. As presented by the report, these are the risk parameters for KNC and ZRX.
Risk parameters for KNC
- 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
Risk parameters for ZRX
- 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
MakerDAO advances in technology
MakerDAO has also been recently recognized as a pioneer for technology by the World Economic Forum (WEF). With the addition of more collateral assets to its lending protocol, MKR has experienced a drastic spike in its price.
The Maker Protocol has proven to be very flexible because it accepts almost every asset type. For Maker Protocol, almost any asset worthy of tokenization can be used as a collateral asset in the lending protocol. As long as such an asset is approved by the governing body of Maker and meets with requirements of the appropriate risk parameters.
Recently, Matic Network announced that it’s been proposed as a collateral asset on MakerDAO. Following the announcement, a poll kick-started and the Matic team called on MakerDAO ($MKR) holders to cast their vote.
Also, Maker recently approved stablecoins TUSD (TrueUSD) and USDC-B (a USDC token variant with different risk parameters) as new collateral assets in the Maker Protocol.
