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MakerDAO Nears Epic New Release and Ethereum Holders Mull “Dividend”

Nick
Author Nick
Published

Ethereum Price: $185.63
Ethereum Price (BTC): 0.021307BTC
Market Cap: $20.15B
ETH Network Dominance*: 69.43%
7 Day Candle**: $187.16 / $194.97 / $180.87 / $185.63

Last week, the stablecoin-issuing MakerDAO system reached a predetermined debt ceiling of 100 million DAI (roughly $100 million USD). Growth in the demand for the stablecoin, DAI, has been increasing month on month since its launch in late December 2017 and a recent vote has pushed the currency’s debt ceiling to 120 million DAI.

DAI, which is generated and destroyed on the Ethereum blockchain, was a landmark creation in the “Internet of Value”, a token which could have a floating peg to the US dollar without the need for a custodian and without the volatility of a typical decentralized cryptoasset. Originally generated using the native currency Ether, DAI is soon to undergo a major overhaul on on November 18th with the introduction of “Multi-Collateral DAI” (MCD).

MCD will allow users to generate the DAI stablecoin with assets other than ETH. Each asset will have its own individual risk parameters to account for their varying structures and also to help ensure that the unlikely failure of one token does not impede another. Starting out with Basic Attention Token (BAT), the system could ultimately accept any ERC20 token (as voted by Maker (MKR) holders) to generate DAI.

What is more interesting – and possibly the reason for the latest surge in demand for DAI – is the introduction of the DAI Savings Rate (DSR). DSR, which will launch at the same time as MCD, will provide access to a variable interest rate for all holders of DAI, creating one of the most secure and decentralized income generating assets in the blockchain economy.

DSR will be used as a means to increase or decrease demand for DAI, helping to stabilize its price at $1 USD whilst MCD will help to balance the supply side. These mechanisms will help MakerDAO lift the lid on DAI generation, leading to a market cap of DAI that may well approach $1 billion come the end of 2020 – enabling an even greater number of decentralized applications on the Ethereum blockchain.

Ethereum Dividend Incoming

A “friendly fork” of Ethereum, named Athereum, attracted attention last week following an Ask Me Anything conducted on /r/ethereum. The fork, which is pitched as a complimentary but improved version of Ethereum, offers a different consensus mechanism to Ethereum’s Proof of Work and Proof of Stake algorithms. The “platform of platforms” that Athereum will run on is called AVA and its creators have described AVA as “Blockchain 3.0”.

Ignoring all manner of skepticism that follows such a statement, the Athereum blockchain will start from a snapshot of the state of Ethereum. This means that all Ethereum balances and smart contracts will be ported to Athereum. Put differently, all holders of ETH at the time of the snapshot will also receive an equal holding of Athereum (ATH).

As has been proven by forks of years past, low value technologies that attract little-to-no usage (see Bitcoin Cash, Bitcoin SV and – to some extent – Ethereum Classic) are able to maintain inexplicable but significant valuations over the long-term. The possibility of an Ethereum dividend in the form of an Athereum fork is likely to create value for ETH holders out of thin air as “Blockchain 3.0” enters the world with a questionable billion dollar valuation.

The date for the Athereum snapshot has not yet been announced but is likely to happen some time in Q1 2020. Should the creators of the project receive enough attention, a bump to the price of ETH as well as a dividend of ATH is well within the realms of possibility.

For those interested in the consensus mechanism of Athereum and its technology, see this Medium post and the AVA Labs website.

– Nick, Owner EthereumPrice.org

* calculated as: (ETH Market Cap / Ethereum Network Market Cap)
** open / high / low / close