Research Summary
The report provides an in-depth analysis of MakerDAO, a decentralized finance (DeFi) protocol that allows users to obtain loans using their crypto assets as collateral. The report covers various aspects of MakerDAO, including its use case, adoption, revenue, tokenomics, treasury, governance, team and investors, competitors, risks and audits, and a summary of its overall performance.
Key Takeaways
MakerDAO’s Revenue Generation
- Impressive Revenue: Over the past 30 days, MakerDAO has generated $15.7 million in revenue. When annualized, this amounts to an impressive $191 million, making it the third highest among all protocols according to DeFiLlama. The revenue is primarily generated through the interest paid by borrowers on the platform.
Tokenomics and Governance
- Role of MKR Token: The MKR token serves two primary purposes: governance and recapitalization resource. If the system debt exceeds the surplus, the MKR token supply may expand through a Debt Auction. This risk encourages MKR holders to align themselves and responsibly govern the MakerDAO ecosystem to mitigate excessive risk-taking.
Treasury and Financial Health
- Healthy Treasury: The MakerDAO Treasury holds $62.55 million in stablecoins, $0.98 million in BTC/ETH, and $131.77 million in their own token (MKR), totaling $194.77 million. This places them in the 14th position according to DeFiLlama.
Team, Investors, and Funding
- Strong Backing: MakerDAO was co-founded by Rune Christensen and Nikolai Mushegian and has raised around $54.5 million over multiple secondary token sales, funded by Andreessen Horowitz, Polychain Capital, a16z Crypto, Paradigm, and Dragonfly Capital.
Competitive Landscape and Audits
- Market Leader and Audits: MakerDAO has established itself as the clear market leader in the Collateralized Debt Position (CDP) category, facing competition from protocols like Liquity and Lybra Finance. The Maker protocol has been audited by several reputable firms including Trail of Bits, PeckShield, and Runtime Verification.
Actionable Insights
- Monitor Upcoming Developments: Keep an eye on the upcoming bullish catalysts for MakerDAO, including the launch of Sub DAOs, Spark Protocol, RWA narrative, and potential rebranding.
- Understand the Role of MKR Token: The MKR token plays a crucial role in the governance and recapitalization of the MakerDAO ecosystem. Understanding its dynamics can provide insights into the protocol’s risk management strategies.
- Assess the Competitive Landscape: With other established DeFi players launching stablecoins, it’s important to assess how this could impact MakerDAO’s market position.
