Multiple Governance Polls have been added.
Voters are now able to signal their support to/for:
🪙Add KNC as a Collateral Type
🪙Add ZRX as a Collateral Type
↔️Base Rate Adjustment: -4% to 4%
✅Monthly MIPs Governance Poll
Much more 👇
— Maker (@MakerDAO) June 15, 2020
While this is merely the first step in formally introducing new assets as collateral, all previous tokens which have made it to this point have subsequently been added to the protocol. With both the KNC and the ZRX votes signalling strong support, it’s highly likely that both will pass – leading them to an Executive Vote to ratify their addition in a few weeks time.
Why DeFi Tokens?
The timing of the integration of two leading DeFi tokens comes in parallel with a larger trend in which assets like KNC and ZRX are experiencing enhanced demand in recent weeks. For those unfamiliar, both KNC and ZRX are currently listed on Binance and Coinbase Pro – an indicator that out of all the wider DeFi tokens, these have the most reach in terms of diverse liquidity pools.
In general, DeFi as a sector has significantly outperformed the broader crypto market. Market participants are rebalancing their capital to the sector with the most traction.
YTD Return %
— Arthur (@Arthur_0x) June 7, 2020
At the time of writing 0X Protocol (ZRX) currently boasts a market cap of $344M while Kyber Network Crystals ($KNC) is now not far behind at $244M. Both assets have identical Risk Parameters including 4% Risk Premiums, 175% Liquidation Ratios and 5 Million Dai Debt ceilings.
Seeing as BAT is currently the only other ERc20 token outside of USDC and WBTC supported as collateral, the introduction of KNC and ZRX would signal a strong shift in narrative as Maker begins to expand its asset pool. For context, only 525k DAI has been created using BAT relative to the 10M DAI minted using WBTC as collateral.
We expect the integration of KNC and ZRX to fall somewhere in between these two, further boosting the potential for Dai to continue reaching ATH’s in terms of outstanding supply.
As for the individual projects themselves, Kyber is currently gearing up for it’s Katalyst token rework – introducing new governance features and value accrual mechanisms via the KyberDAO. With 0x Protocol currently testing its native DEX – Matcha – in closed beta, it’s safe to assume that ZRX is also likely to experience strong demand in the coming months.
Maker Continues To Diversify
For those following along last week, Maker was noted as considering the introduction of Centrifuge real-world assets like Paperchain DROPS – tokenized invoices representing a claim on future music royalties. While we all know that Maker will inevitably include the support for more diverse asset types, the introduction of tested tokens like KNC and ZRX feels like the right move in terms of slowly easing into more rich collateral.
Similarly, the sheer number of governance polls in Maker appears to have reached a new high, with dozens of polls to whitelist new actors to provide more oracle information to better battle harden the system.
📝Whitelist DeFi Saver on BAT/USD Oracle
📝Whitelist DeFi Saver on BTC/USD Oracle
📝Whitelist MCDEX on ETH/USD Oracle
— Maker (@MakerDAO) June 15, 2020
Cooper is the Editor of DeFi Rate and a contributor to leading DeFi outlets like the Defiant and Bankless. He is active in the DAO ecosystem through projects like MetaCartel and Raid Guild where he seeks to incubate governance models and grassroots community development. He is an ambassador of Set Protocol and the Director of Fitzner Blockchain Consulting where he authors a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.