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BlockchainWhispers.com MakerDAO Research Report

In-Depth Project Analysis - MakerDAO (MKR)

Mr. Bunny Chaser

Blockchain Whispers’ Fundamental Analyst

D Man

Blockchain Whispers’ Founder

MakerDAO (MKR) Executive Summary Last year left most of us in tears. The year of the bear left the streets filled with blood, in light of this bear market emerged stablecoins. Remember the Tether scandal? I believe that for blockchain to achieve its true potential, stablecoins are an evil necessity . The greater adoption of cryptocurrency demands stability and decentralization simultaneously. This is a very hard balance to strike and DAI has managed to just that by setting up two-layer stability of mirroring the US Dollar as well as using the Maker ecosystem to act as a Federal Reserve on the blockchain . MakerDAO is an organization established in 2015. Maker is a smart contract platform on Ethereum. It’s used to maintain the stability of the price of DAI. It’s like the Feds buying back or adding to the supply to maintain stability and prevent hyperinflation. Think of the Maker system to be a continuous election. Decisions are made at every moment and are completely transparent because of the fully inspectable nature of the Ethereum Network. Regardless, Maker is grabbed a huge share in the stablecoin pie to emerge as one of the go-to stablecoins. Currently trading at about $650 Maker has been strong through the bear market and worked its way to #16 on CMC with a market capitalization of $647,723,294 USD. One of the key reasons for the surge could be the effective use of the voting system making the right decisions as a community Maker strives to cut the middleman out of the tracks of stable cryptocurrencies. Ideally, most stablecoins have a bank account somewhere on the shores of a remote island and it puts in an equivalent amount (Aha? Do they really do that?) of USD to the number of tokens generated. Maker is generated and destroyed as per the need of DAI to remain close to the true value of $1 USD. In this report we will be covering some of the hottest scandals, Boom of the stablecoin industry and dive deep into the MakerDAO protocol, understanding its fundamentals and also uncovering its impact on the cryptosphere as a whole. This report also includes an exclusive BCW analysis of MKR token.

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Evolution of the credit system Quoting what one of the team members spoke about in an Ethereum Foundation seminar broke the credit system into a really easy to understand concept. I would use this flowchart to get this ingrained in your brain.

Understanding the flaw in the currently dominant stablecoins Stablecoins? Ha-ha, that’s a long lost joke. Bitfinex lets you leverage trade USDT/USD. This defines it all. Stablecoins don’t serve the purpose they are created for. Money needs stability. Throwing light on events like the Great Depression, we have seen that even one of the largest economies in the world now faces a $21 trillion debt. What’s the reasoning given? Military expenditure? Bullshit. The whole financial system is messed up. Starting from the Bretton Woods System to the European Exchange Rate Mechanism (ERM) everything has failed. And our fiat currency is pegged to such currencies, Dollar, Euro, and others. There is bound to be some volatility, but surely not as much as we saw in Tether. We must realize the total money, assets and other valuables are worth quadrillions. The stable market has an opportunity that was never offered to anyone else. Thus we need something reliable. Look there are different types of stable coins and each one has their own cons. Consider fiat backed coins like Tether, it needs a deposit in banks and someone controlling the flow of funds, making it more centralized. Also there can be a legal issue that might lead to the closure of the account making the whole system void. Crypto-backed stablecoins are pretty stupid because the collateralized commodity itself is volatile. There are things like a gold backed and other types but the Bretton Woods shuns them all. The best we can hope for is a nice mix of all of these.

So what are the ‘must have’ features in a stablecoin (our opinion)? · Stability - Oh well the name doesn’t explain that enough. Frequent fluctuation and devaluation are one of the key barriers preventing further growth. · Scalability – We surely can’t have something slow to settle transactions. We are always on the move and need something that matches the pace of our action-packed lives. · Decentralization – The banks and governments hate his point because it snatches away their ability to control our funds, making us their puppets.


Tether (USDT) played it dirty

So where did they fuck up? To cut it short, they were not transparent with their audits . The controversies child, Tether has a long drawn history of scandals that would be as exciting as a daily soap to unveil, but we will uncover the biggest and most significant controversies surrounding the “holy grail”.

Starting off with the whole fake about Tether and Bitfinex being two separate companies and no ties. All of it was pure bullshit and if you haven’t read the Paradise Papers yet then do it right now. This organization has been extremely confidential about the banks it holds ties with and also the audits it is bound to provide frequently. Now, let’s dive into the whole price manipulation on Kraken . Numerous organizations have pointed this out and I would be quoting Bloomberg here. It surely does raise eyebrows to see that an order of such a huge volume has no effect on the “stablecoin”, but a relatively insignificant order does make an impact. Even a person having no background of finance would raise red flags to this. Clear wash trading with the help of automated trading bots. Even to this day, a large chunk of people believe that the whole 2017 bull run was price manipulation. And I wouldn’t shut them because it did seem fishy. Let the numbers do the talking, from January 2017 to September 2017, the tethers grow from $10 million to about $2.8 billion. This was something that couldn’t go unnoticed. JL van der Velde, CEO of both Bitfinex and Tether like any other responsible entity, declined all this and just shut the whole thing down. Well, we wouldn’t say this left them clean, it did cause a dent making them lose their clean chit status with the monitoring bodies. December 6, 2017, subpoenas from the U.S. Commodity Futures Trading Commission were sent to Bitfinex and Tether. It is necessary to keep in mind that Bitfinex is a leverage trading platform which could take the whole company into having deep red balls if not managed efficiently. We all know the issues Bitfinex users have with withdrawals. Just visualize the scene where they can go on printing Tether to fill in everyone’s need, like a golden hen. The irregular audits and low transparency has made it one of those catchy headlines in every newspaper. Even the law enforcement is breaking down their neck and it might just be too late to shut the show.

The issue with banks has always been at the tail of these to “different” companies. They did start off with the bigger names like Wells Fargo but soon had to face legal problems with their transfers being blocked. Filed a


lawsuit and withdrew it a week after realizing they would be at the receiving end, they decided to hop to smaller banks in remote island s and lesser susceptible locations. Next on the exploit list was Noble Bank in Puerto Rico. They were allegedly handling all the transfer for Tether, but recently after their ties were broken, Noble Bank is apparently up for sale at a price of about $5 million . That is the state of a bank working for these monsters. New one on the block is Bahamas-based Deltec Bank who were added to the list on November 2018 after an official statement. All we can do is hope for the best.

Why is there so much hype around stablecoins? Consider a simple analogy to understand this example. Over time the value of products and the amount USD paid for it changes, just like the Ethereum and Apple product example shows that due to the volatility of the asset, the valuation changes. We cannot afford to have such volatility where you might get paid your salary as 1 BTC at 9:00 AM when it's trading at about $5000 and by the time you get back home at 5:00 PM you barely have $3000 because of the crash. This would lead to financial instability on a larger scale. For example, if the government sets a budget of $5 million (1000 Bitcoins at $5000) and by the time the year comes to an end the value of one bitcoin hovers around $3000 making the country suffer miserably. Do we really need stablecoins? This question does pop up in our mind when we see all the flaws in the ecosystem. When we look back at the barter system, we realize that we have evolved for the good. Most exchanges trade other coins against BTC and ETH and this is no short of the old, rusty barter system . Exchange of goods. We introduced fiat so that we could proceed without double coincidence of wants , but what the hell does that mean? Assume you are in need of sugar and are ready to sell your wheat for it, in such a case you will need to find someone who wants to sell his sugar in return for wheat. The second problem would be how much of your sugar would be equivalent to his wheat? This would cause a lot of ruckuses so to cut that we got the fiat into the picture. Similarly to have something value our crypto assets we need something like the fiat introduced in today’s world. Now, why bring it on the blockchain? Because most of the cryptocurrency ecosystem works on it and reduces the need for physical contact between the sender and the receiver. This can also be used to transfer funds without the need to go through the banking procedures and giving away the fees.

MakerDAO Overview DAO? What on earth does that mean? DAO stands for “Decentralized Autonomous Organization”, its and an acronym. Now that we have gotten the name right, let us dive into to protocol of the most exciting stablecoin out there. Maker isn't the stable coin, it's like bonds that the government buys and sells to maintain the stability of their native currency. Here DAI is the stable coin . To put it in the simplest way possible, 1 DAI = $1. But this is not hard pegged to $1 rather a "soft peg" is used which means slight deviation is allowed. MakerDAO aims to provide the market with an alternative stable currency that can serve both as a decentralized currency as well as a fully transparent, fully auditable platform that provides governance to the future of the credit system.


What about Maker?

It's like a check and balance system that governs the stability of DAI attempting to bring it as close to the true value as possible. It's a governance token that is used to pay fees on the loans token as DAI on the platform. Think of Maker to be like a voter's ID, it is used for making policies on the platform regarding crucial issues like the interest rates, fees to be charges, collateral ratio required for loans and basically everything for the smooth functioning of the platform. The best fit to this would be exactly what the central banks of a country do. They are responsible for managing the interest rates, preventing over inflation and other nasty things.

Only, in this case, we have an ERC-20 to govern a system working as central bank on the blockchain . Now there is this thing with banks that "they" can print money. Here 'they' are the one in power but in our future, we don't want people/certain organizations to control the funds. Companies like Tether have control over the funds, they create it. DAI can be created by 'anyone', yeah anyone. That means you and I can make our own funds. Human beings are bound to make mistakes. Yes, even the smartest and fastest people make mistakes. I do, Einstein did, Newton did and there is always a way where the rules are bent. Why is that so? Because we make them flexible. Assume you get a caught by a cop for carrying stash in your car. We have two choices in here, we either go in jail or we 'bribe' the cop to cover our tracks. And well most of us would choose the latter. MakerDAO is a smart contract platform which means the rules are coded and are hardbound and work according to the given set of instructions. Okay well, but what if someone changes these rules? Change is such rules can be implemented by proposals. The best thing about the MakerDAO protocol is that any Ethereum holder can make a proposal. These proposal contracts are voted upon and the one with the maximum votes is made active introducing all the necessary changes. Pretty much foolproof you see? Well, there is one thing that I didn't like. To put it out without bullshitting, more Maker you own more is the voting you hold. This is like rich guys can manipulate proposals in their favor. Now, why would MKR holders vote for the right thing? The price of Maker is dependent on governance.


Think of the Maker token to be the ‘economy of a country’. Good decisions improve the financial condition of the country like the GDP. Similarly, in the MakerDAO ecosystem, the price of the token of the token has been 'booming' because of the good decisions made by the community. The last proposal accepted was on 8 March 2019 to raise the stability fee of DAI by 2% from 1.5% to 3.5%. The Maker token has been strong in this bear market and well let us be honest. I'm either too slow at working or this coin has jumped over $50 from the time I have started.

How does MakerDAO work? I’ll be honest here, this was the most challenging part of this report. All that is available on the web about this project makes the bad matter worse. I decided to let the white paper simplify it for us.

Slowly analyze that statement. A smart contract platform to manage the whole system. Here the most important kind of smart contract is the CDP . What this effectively means is that the Maker system allows anyone with Ethereum as collateral to create DAI.

Understanding CDPs Look back at the history, you will find that loans of any kind are issues against something that guarantees their return and are usually more valuable than the loan itself. Assume a housing loan, you go to the bank and pledge the documents (secured debt) of the house and in return, they give you some money against it. It's a mortgaged house now. Similarly, the Maker system also creates DAI by locking up our collateral in safe boxes like that in banks, in this case, we use smart contracts.


The ETH is escrowed into the Maker smart contract to create DAI and well its basic logic that you cannot create more DAI than the value of the asset kept as collateral. In this case you can create a much smaller amount of DAI as compared to the ETH acting as collateral. Just like the banks have an interest rate on the loan issues, the Maker platform charges a fee accordingly. 'Collateralized Debt Positions' what the hell does that even mean? First off get this clear and deep in your head. CDP = collateralized debt position. We will come across that term tons of times. Consider this CDP to be like a contract. Each CDP has a set of parameters that are underlined with it. These are the risk parameters that include crucial aspects such as the debt ceiling, liquidation ratio, stability fee, and penalty ratio . Quite similar to the loan agreement that includes the term, interest rate and other details. In Maker lingo a few things are slightly changed. Debt ceiling sets the upper limit for the amount of debt/DAI that can be created with the CDP. Liquidation ratio is the collateral-to-debt ratio at which CDP becomes vulnerable to liquidation. Interest rate is called the Stability fee on the Maker platform which is the amount of fee to be paid for taking the debt. Penalty ratio is the penalty fee covered if the borrower fails to prevent the liquidation. To put it in a simple way, the more debt you take, the higher will be the collateral-to-debt ratio and you wouldn’t wanna liquidate your CDP. The Maker community has a lot of powers and can also change existing CDPs by fine tuning these parameters based on the economic situation like the financial ministry or central banks monitor the interest rate and minimum deposit in banks according to the financial stability. Why would I open a CDP? It's simple. Just like you don't want to give up the ownership of your house, but also need cash to start a new business, opening the CDP here provides liquidity without losing ownership of your crypto asset which in this case is ETH. One thing to be kept in mind is that just like Banks sell out bad loans to cut losses, the Maker system can liquidate the asset if the CDP does not hold enough collateral to cover the value of DAI issued to you. Ethereum is quite volatile and the best you should keep in mind is you lock up at least 150% ether equivalent to the value of DAI generated . Risks involved I cannot stress this point enough. Look the 150% I spoke about earlier needs to be hammered in your head. Just like you 'monitor' your Portfolio every now and then, you ought to keep an eye on your CDP too. What you would wanna check is that the value of ETH acting as collateral is over 150% of the DAI issued to you. This should be hitting you every now and then. Why is that so? It's only because you could get liquidated. Yeah, something similar to Bitmex where we all curled up in a corner and wept our asses off after losing money. On Maker, the scenario is no different. Just as in leverage trading we average our entry price to prevent liquidation, here you can add more collateral when the value comes close to 150% or you can choose to pay a part of your debt.


If the value of the locked up collateral falls below 150% , which means the locked up collateral is not sufficient to support the CDP, the system liquidates it. There exist ‘keepers’ who scan the blockchain for risky CDPs. They are the ones who liquidate the CDP and receive a small fee for doing so. In layman terms your ETH is sold. This is done to cover the value of DAI issued to you as a loan. If any change remains, it will be sent over to your CDP where you can withdraw it. Now you know why we gotta read the Terms and conditions before we jump right in. But no you are lazy prick who need quick money. Suffer that liquidation Fees In all good faith, you use the borrowed DAI and now plan to return it and regain ownership of the Ether you locked in the CDP. You ought to pay back the DAI that was borrowed plus a stability fee that is paid to the DAO community aka Maker holders who are voting. This fee is also set by the community and can be raised by proposing a change in the smart contract. The latest fee rate is 3.5% per annum. The fee is paid in Maker when the DAI is returned. Assume you don’t keep the 150% mark set. You are already aware that the system will sell your ETH and cover the cost. Additionally, a penalty fee of 13% is deducted from the amount of USD received on selling the collateral. This is like the defaulter fee. Creating DAI Taking a loan needs documentation and so does the Maker system demand for a CDP. We need to create a CDP to make DAI. The simplest way to do so is using the dApp (cdp.makerdao.com) created by the Maker team for managing CDPs. You would have to log into your MetaMask and connect it to the network. You will be prompted as follows.


The user interface of the cdp.maker is much cleaner than the dai network which is still in its beta. It's a pretty straight forward process once you connect your ethereum address to the network. This will enable the dApp to communicate and retrieve information pertaining to your open CDPs and allows grants you the ability to open new CDPs.

I have created a simple flowchart that covers the process of creating DAI keeping in mind all the previous discussions.

Once we have our CDP created we need to ‘Monitor’ it to ensure the water does not get over our head. This can be done by accessing the DAI Dashboard. Again this being on the Ethereum network requires us to connect our wallets to it. MetaMask comes handy when we do this. Keep some spare ETH for gas and also MKR should be in for paying stability fees. Like I said earlier, the DAI dashboard isn’t the best UI you will come across but i feel over time this will be fixed.


Price Stability Mechanism Scroll back up and see what I told y'all about the kind of peg DAI has towards USD. It's a soft peg meaning the price can be slightly higher or slightly lower than the actual value of USD. The aim is to remain as close to the true value of $1.

But how is this achieved?

To understand this let's assume DAI has slipped from its value of $1 =. Now to get it back on track a rescue mission is started. The system has something like a fire alarm that gets turned on (no pun intended) by the smoke detectors. Only in this case it isn't smoke acting as the stimulus, but price fluctuations and the fire alarm is replaced by Target Rate Feedback Mechanism (TRFM) . Just like the fire alarm sets the sprayers on, this mechanism manages the supply of DAI by altering the price of the creation of new DAI. Say the price of DAI is higher than its true value, this system makes the creation of DAI cheaper making it less valuable hence bringing the value closer to $1. If the price of DAI is less than the target price, the system makes the creation of DAI cheaper making it costlier. To put it in simple words it's the 'supply and demand' mechanism or cross-elasticity of products. Only, in this case, the effect is on the same product and not two different entities. As the MakerDAO platform is a fam-jam of smart contracts, this is also automated ensuring no third party meddles with the system causing a calamity. Yet MakerDAO participants do behold the power to change the sensitivity of the TRFM, coming back to our example the smoke detector can have its settings changed. The same thing can be done here to alter the eagerness of the trigger. This again has its proposals. Bailout on the blockchain The most popular coinbase parameters, "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks". Yeah, the genesis block does talk about how our financial system is fucked.


DAI keeps its peg with the help of his buddy MKR. The whole MakerDAO platform uses MKR and it liquidates CDPs if the collateral falls short in turn reducing supply of DAI. This is one way it manages to keep close to $1. When this happens, the collateral is to be sold off to cover the DAI generated using it as a pledge. MKR holders also act as the Federal Reserve on the blockchain to help out maintain the stability of DAI. The success of this mechanism is something that needs to be kept in mind while considering this over its peers. Going by the chart of the price relative to time, we can see some minor fluctuations and a few major spikes. 93 cents would be the lowest when the system had itself set up and slightly mature and on the upper end, a bar of $1.05 was the peak. This isn't something expected from a stable coin but as time gradually passes by we can see that the system has performed better and the price is settled to a smaller range of about 3 cents for fluctuations. I believe over time this will get further reduced and MakerDAO will achieve its target price of $1.00

Maker Tools This is one of the most impressive UI I have ever seen (Yeah the managed to get both the best and the worst UI ) This page (mkr.tools) gives us that crisp information needed. Tons of knowledgeable facts in a single glance.

What's so great about this? Look at the MKR graph. 1 million MKR or just 1 MKR higher. Now looking at the other parts of the website. A pie chart that shows us about the CPDs, right below that this we can find the history of all the necessary details about the recently closed CDPs, liquidations and other details. Why is this thing so amazing? Price Oracles are decentralized sources that provide the MakerDAO ecosystem with external information about prices. Think about the Gold market, when we have to sell at the international market we need something that can give us prices. Now the prices can fluctuate across the globe. This might cause some confusions. In the case


of collateral that is as volatile as Ethereum we need something that can give us accurate information. Here we have price oracles that feed the system with prices from all corners and an average value is taken to manage CDPs. This is done to prevent manipulation. This whole thing is done by smart contracts. This makes me believe in the magic of blockchain. The liquidations, CDPs everything is setup by the price feed given by these oracles. These oracles have created miracles.

What if Ethereum toppled like it did from $1400 to $85 The DAI stablecoin has absorbed the biggest crash I have personally seen on Ether just like any minor fluctuation. Even if the price would tumble by 50% in a jiffy, the auto liquidation mechanism can save their ass. The best answer to this question would be from someone who is so close to the project that he is listening to every beat of the MakerDAO ecosystem, Rune Christensen. In a recent interview he finally answered the key question about how DAI would react to crashes. “Yeah, I mean, I’ve been incredibly fascinated by being able to see how like people interacted with the system in this first year. I mean, especially considering the crazy circumstances of just like this persistent Ethereum crash, right, that just kept getting worse and worse and worse, and I think the main interesting takeaway that we’ve observed is, yeah, it’s just like this how good people have been at adding more collateral to their positions, and in general, how people seemed to have preferred adding more collateral rather than deleveraging, which I actually think is a little bit counterintuitive, but I mean, that’s apparently just a preference, right, of users, and then like there have been those situations where a lot of people have been liquidated at once, and typically, those have always been times where there’s been a sustained crash, it’s kind of been crashing and crashing and crashing and crashing, and then, at the end of like a long sustained period, then suddenly, there’s like a really steep crash. That seems to like catch a lot of people off-guard because I guess many people, they expect after there’s been a long period of crashing, then it will turnaround, right, and then they’re actually willing to go to a pretty risky point in their CDPs there, and then can be caught off-guard if there then is suddenly a steep crash. Yeah, it’s quite amazing, and actually, the answer is pretty simple, is that the system ended up absolving almost 2 percent of the entire Ethereum supply, so basically, as the price of Ethereum crashed, more and more of the entire Ethereum ecosystem like entered the system, basically, to make sure that despite the price of Ethereum crashing, the supply of Dai actually kept growing the whole time because there was just a flood of Ethereum tokens entering the system, so even though from the beginning the value of Ethereum had fallen 10 times or even more, there were a hundred times as much Ethereum in the system, at that point, so even a 10x fall in price didn’t matter because there was just so much Ethereum put into the system.”

A look at the other stablecoins


Let's have a look at all the major players out there fighting for the place of the best stablecoin. It's a multi-million dollar industry that is booming. Even the Olympic twins who shat on Facebook have jumped on the track with their own version of the digital dollar. Tether (USDT) Dang it! We started with the biggest fraud of the crypto industry. Love it or hate it you simply can't ignore

the fact that this is the leader of the market. Massive manipulation of the 2017 boom. They are too big to care about now. No decentralization and is like a bank on the web who has decided to work with the shill machine of the decade. Justin Sun. Considering the market capitalization of this coin and its spread all

over the exchanges, I doubt this will ever completely die out. We just can expect this to lose its market share. TrueUSD (TUSD) They changed the position of "T". Yeah, the most evident change in this one. Okay well, TrueUSD has a good backing of 1:1 maintained and regular auditing but I would swear to not call this stable. A spike of 30% sent it to $1.30. In no way would one want that to happen. It has just completed one year of service and I presume it will need some more time to solidify its position. Also, it is alleged that they have bank transfer limits of $10,000. Gemini Dollar (GUSD) Twins have allegedly been in crypto from the time Mark threw some cash at them for the Facebook idea. These guys have played it extremely clean. United State's regulation, Trust company has their 'trust', State Street bank gives it the green signal. These guys are actually making an impact but again there can be spikes up to 5%. Gemini Exchange's main stable coin and good reports about banking have kept them on top of the game. Yet they fail to get into the to slice because of the liquidity issues and an aging factor. (6 months old).

USD Coin The big boys in the game team up for this new fiasco. Coinbase has become one of our favorite and go-to exchange for locking in some fiat. Circle has always been one of the bigger names and acquiring an exchange can give them the necessary liquidity to boost the performance of their dirty deeds. The one thing that they would worry about is the small market share their exchange holds in comparison to big names like Binance.

Paxos Standard (PAX)


ERC-20 was the thing in 2018 but when CZ acted as a godfather to PAX. it got the necessary liquidity. Binance being one of the biggest exchanges of our time, it has made a huge impact on all coins listed on their platform. Typical 1:1 backing and other things that are the must-have features of the stablecoin. What makes it great? New York State Department of Financial Services has approved and regulated this token. That is an eye-catcher. Also, you can store this in your MEW. Decent coin that can make a good replacement to the current leaders but this can be better.

MakerDAO social performance

Why is MKR booming everyday? Curiosity hit me like a truck and I decided to search for the coin that has been stable in this bear market (seems to take forever) and that's how I came across this project. Stunning growth rate. I thought it might be like one of the 'cryptopia gems' (pity you guys after the hack). When I decided to dig deeper it was fascinating to see this coin come up to the top tier of altcoins. The market shat on all coins and some lost up to 98% of their value but MKR held its ground. (To an extent. Would hate to lie to you guys) Like any rational person the thought of 'why?' came to me. There is one crucial thing to keep in mind while understanding the success behind Maker token. If DAI gets more attention, MakerDAO ecosystem grows making MKR more valuable. Let's get some things cleared about this project's use case. I'll start off with the most evident one.


Cheap loans? Hell yes I'll let my kids to the math. What is cheaper? 3.5% fees annually or 12% ? Don't act dumb here by saying this system is not reliable. Yes, it's the new kid on the block thing but it might as well disrupt the whole loan and mortgaging in the society. Lock up your saving and pay off the debt for your house/car. Now work and pay lesser interest. Get out of the vicious cycle. Apart from that, you can also understand that MakerDAO ecosystem running on smart contracts can reduce corruption by a significant amount making it the next big thing from the technological perspective. Decentralized leverage We can't hide our love to the leverage. Bitmex has ruined my sleep cycle. I would be starting at the ticker and watching my trade booming in unusual green numbers in the middle of the night while my girl is sleeping by me or yelling at me to give her some attention. YEAH! all of us love that green. But let's get some honesty. You hate to get liquidated because of the manipulation on bitmex . That has cost us a lot of cash. It’s a clear indication of manipulation when binance manages to stay strong but bitmex has these sudden moves. What if we could cut this and still make money out of our small bags? Maker + DDEX = Decentralized Leverage on altcoins

MakerDAO lets you do that by exploiting its CDP and DAI mechanism. All you gotta do is just lock up your ETH on the system and generate DAI. What makes this juicer is that you don't have a small list of coins to choose from to leverage trade. You can use your DAI in altcoin trades and make huge greens. Betting it the right way on Augur One of the most talked about betting platform on the blockchain is the Augur platform. You can possibly bet on anything of your choice. Hate trump and you're sure he would lose in the next election? You can bet on that and


make money. Big fan of Chelsea or Spurs? Show some love on them by betting on their chances to win the cup. (Oh well Spurs and Cup don't fit in together.) Why does this matter? Say you bet on an event today and set it at 100$ in ETH (assume 1 ETH). Now you win and according to the bet, you get 4 times the amount you bet. So that means you get 4 ETH. sadly ETH crashed to 50$. now you only get 200$ instead of the $400. We all would hate to see this happen but there is no one to blame here. (Well you could pick on the alien) Integrating a stable coin cuts the possibility of such a sad scenario ensuring your wins get their worth. Real estate with DAI We all wanted a piece of something big. Say Burj Khalifa or the other way round you don't have funds to build something. You can sell shares of the property to investors. And to add to the icing DAI has integrated with one of the leading firms in the business. Stablecoins such as DAI have boosted their sales fairly.

Cross-chain operation with the help of Wanchain

One of the biggest problems of the existing system is that there are too many blockchains refusing to collaborate. Just like egoistic heads of states who can't work together for world peace. What if we got to that stage?Lots of collateral damage and threat to human existence. If we are to get adoption from the masses, we need to work together. Wanchain is

bridging the two most prominent networks. Bitcoin and Ethereum. The integration of DAI is a go-go for both parties as the MakerDAO system can now provide multi collateral CDPs making it easier to get loans. Slowly this will spread making it one of the prominent loan providers. MakerDAO and Wyre team up for 30 countries Moving between fiat and crypto has been extremely tedious or we end up paying extremely high fees for the same. Wyre and MakerDAO understand us like no other and help us out by setting up an easy exit and entry route for crypto. Life is so much easier now when one specializes in bridging existing infrastructure with the future and the other strives


to provide a transparent and stable alternative to the US Dollar. This also supplements the crypto loan idea mentioned above.

OasisDEX OasisDEX is a great idea to add liquidity to the token. Decentralized exchanges have been booming lately because people are sick and tired of the manipulation. Yet one thing that has bothered the community is the UI. The cleaner UI, the more people are bound to hop on. The MakerDAO team understood this early and have taken the OasisDEX down to provide the people with the best. All we can do is wait and hope for the best. I could go on and rant about how almost all exchanges have decided to integrate with DAI but i suppose this explains it all.

Flaws in the MakerDAO system Before we dive into these keep in mind these are places where improvements can be expected. We have no beef with the MakerDAO team to be firing shots at them. This is only for the betterment of their system. Ethereum might not exist forever Every single day there is an improvement in blockchain technology. Vitalik has been trying really hard to keep up with the competition but needs to pull his socks up if he wishes to dominate this industry. Companies like Neo and Lisk have come up with great features like sidechains to prevent clogging of the network. For MakerDAO to stick to its peak it ought to have a better system that can last longer. Bugs in the code can make a big problem as the whole thing is based on smart contracts. Remember the DAO hack that caused millions? We would surely not want such a thing to happen again. DAO hack let the attacker ‘ask’ the smart contract to send the funds back before it could update the balance. One of the biggest crowdfunding let the whole community in tears. We need to keep in mind that such things can make the whole thing hit the dust. And Charlie Lee wouldn’t miss such a great chance to shit on others. Bitmex’s research wing also found a potential bug on 13 March 2019.


The supply might not do the magic I’ll be honest here. I tried to contact the team to find answers for these questions but they did not give me a convincible answer. If I were to share the exact response, they send us an index of all the posts related to MakerDAO. Getting back to the real concern. Maker has a supply of 1 million . It is a governance token which means it has to govern the price fluctuations of DAI stablecoin. The real puzzle is when the 1 million tokens can't handle the drop or spike. The most possible answer I would get is that they would use 'global settlements' to bring the stability but I strongly oppose this as the people suffer not because their collateral is short, but because of the inability of the system to handle fluctuations. Why have two tokens? This was another riddle that kept me off writing for over 36 hours. I could not understand the need to first off "soft-peg" DAI to USD and then bring in a secondary token to stabilize it. Why not just have it hard pegged? Let this keep us hooked while the project unfolds before us.


Scalability Issues I know Vitalik has promised the sharding update can fix all these issues but the network capacity is alarming because of the tokenization on this network. Having gas fees fluctuate, people might end up paying higher gas to move DAI if the adoption is massive. Never concepts like IOTA's tangle would be interesting to implement for such lively systems.

MakerDAO Team Overview The team has worked their asses off to bring this project to life and I commend them for their efforts. A huge team assembled to make such a great project to come to life. The CEO does make me curious. He has qualifications in biochemistry but has jumped on a technology that is on the other end. Well, I presume it's his passion. This passion has kept him through the 4 years acting as the CEO of MakerDAO. As a whole i would say it is a young team with a desire to make a difference. I consider this to be one of the bigger movers in all their lives as the ecosystem is catching everyone's attention. The CTO has been spotted often speaking at numerous events about DAI and MakerDAO. He knows his shit and i think they have their trust in the right place.


Maker (MKR) Technical Analysis

Maker $MRK/BTC has had a phenomenal run throughout the month of February. Its has been in consolidation since then with some very large positions closed on 02-27,28 & 03-04. We hope it has now cooled down enough to enter. The daily close on the bull flag has held, sell offs have halted and volume has been consistent. Watch the order book & 50 EMA for your stop. The pattern will see itself through within the next week.

Looks like a pretty good buy. USD market could be a little more stable, less killer wicks, a tighter order book. Might be able to enter nice and low if we get one last wick before we break out. Pattern will probably play itself out within the next week.


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How to ‘not’ get rekt on Bitmex With all the greed slowly growing in us, multiplying every day, we need to find a way to stop letting Arthur Hayes take our money. All he does is a short squeeze and then we get rekt. Is there something like a cheat-sheet that tells me where to set the buys, sells and stop-loss? Is the calculation of Risk Reward a pain in the ass? Head over to the calculator made to let you live in peace. Bitmex position calculator lets you find the right points to make a successful trade. All you have to do is enter the size of your portfolio and the strategy you stick to. I prefer using less than 10% on a trade. You can set your targets and it will tell you about the risk parameters of this trade and also informs you about the amount in BTC to be invested in this trade considering your position.

Maker wallet concentration This is one thing that I did not like. As I stated earlier, more MKR you hold more is the impact you would make on the voting. Here the top 3 addresses control over 50% of the supply making it more centralized. This would be one place where I could wish for some improvement from the team. We could possibly set limits on the maximum amount of MKR an account can hold.


Maker (MKR) Final thoughts The top 10 banks in the world have assets worth about 25 trillion dollars. Yeah, 25 fucking trillion dollars. The crypto market cap has never hit 1 trillion dollars yet and the banks have all the damn money. When we are moving towards Web 3.0 , we ought to find a safe and secure network to get all that funds in. After typing over 8,000 words describing the MakerDAO ecosystem, I conclude that this project does have a great vision. They have the capacity and ability to revolutionize the banking system on the blockchain. There are tons of lending platforms like BlockFi and Nexo but each one has their own shortcomings. BlockFi needs you to have at least $4000 while Nexo charges up to 16% on the loan. We surely cannot shift to crypto loans with such painful interest rates. MakerDAO isn't like a lending platform here. DAI is here to make a difference. The Feds can get a strong hit for everything that they have been doing all these years. Being a governance token, the community strives to make the right decisions . Better the quality of decisions more is the valuation of the coin. It's just like the economy of a country. Only, in this case, the people have what they are supposed to get. No corruption. Did you even know that this project did not have an ICO! If they wanted to make money, they could raise hundreds of millions and then vanish. They are here to make a mark in the cryptosphere. I would take a step further to say that the valuation of the MKR token is directly based on the popularity of DAI. Soon we can see the world hopping on a decentralized stablecoin that sticks to its word and well has no criminal records. The growth rate is stunning. Maker has held its ground in the bear. Do the simple math and think of the bullish market. This can make us huge greenbacks when we see the bulls. Fundamentals have been weak because of the low key attitude of the team. Technicals aren't that bullish either. Yet it is my faith in the project that will make me wanna get my balls deeper into this project. Skip being the victim of manipulation with Blockchain Whispers’ tools like the E arly A ctivity Radar, Dream Accuracy Reach Target and the Long Vs Short Calculator which are all available for free. To add to the party, we have an exclusive stripper of Blockchain Whispers. Natasha has that tight ass you have always craved for. Spank your way to profits.


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