MakerDao Adds USDC to Mitigate Liquidity Risk

The recent crypto meltdown is testing the resilience of the most robust platforms. And this pushed Ethereum’s most important DeFi app MakerDAO to the brink of a shutdown. Fortunately, that did not happen but now the platform is facing an outstanding under-collateralized debt of $4.5 million.

To combat the situation, the platform plans to execute the first-ever MakerDAO backstop auction.

Now Future-Proofing

Maker Foundation is not only trying to resolve the current situation but is future-proofing itself too. While the Foundation officially claims that the current state of the protocol is healthy, it has gone Live with the protocol adjustment Executive vote.

And these proposed adjustments will be adapted to ensure such a crisis doesn’t happen in the future. Even the programmatically inserted MKR auction parameters are also being proposed. Additionally, the parameters that would restore DAI to 1 USD are also being suggested in the live voting.

What exactly happened?

On March 12, Ethereum lost over 30% of its market price within 24 hours. Such a sudden drop tested the Ethereum’s DeFi ecosystem harshly.

According to MakerDAO, there was no bug or hack. Seemingly, a Maker oracle could not match the speed of the price crash. Effectively, the Maker Vaults didn’t receive the most recent price and remained over-collateralized. Meanwhile, some users were able to win auctions to gain ETH with zero DAI bids. Resulting in a $4.5 million DAI surplus in the market.

However, the team is still investigating what led to the price feed delay that could have caused an unplanned emergency shutdown and released 2.4 million ETH into the already melting market.

Auction Provision

According to the DeFi project’s whitepaper, the protocol will try to re-collateralize the system. And it will do so by programmatically generating MKR and then auctioning it.

Current Situation

Right now the entire community and the Maker Foundation are working together to restore the health of Maker Protocol. Over 12 protocol adjustments have been proposed in the last 48 hours. And the DeFi supporters are leaving no opportunity to participate in the auction to strengthen their MKR position.


Meanwhile, PieDAO te narrator Alexintosh believes, the situation arose because of the lack of keeper bot competition. He further believes DAI is in infancy and the events like this will strengthen the ecosystem.

Previously, we covered the recent upgrades to MyEtherWallet App


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