Maker’s MCD

Over time more of the problems of Maker’s MCD system have been identified:

  • Leaks value to unaligned participants during debt, surplus and collateral auctions.

  • Pays premiums to unaligned participants for their stability during arbitrage.

  • Doesn’t scale up to the demand for stable assets as effectively as a centralized issuer.

  • It grew reliant on centralized real world asset providers like Circle’s USDC.

  • Doesn’t direct the flow of value to aligned participants.

  • Can be susceptible to cost-of-coercion attacks.

  • Has a brittle static peg.

  • Stability fees eat into leveraged yield.

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