Ethereum News

About 1% Of The Total ETH Supply Is Locked In The MakerDAO Smart Contract

Published

1 month ago

November 15, 2018

Stefan

A new research has gone viral in the latest digital currency news, coming from the creator of MKR.tools Mike McDonald and his celebratory alarm on Twitter, where he said that according to the Ethereum blockchain – about 1 million Ether (which is 1% of the total supply) is currently locked in MakerDAO smart contracts.

As he revealed on Twitter:

There is now 1,000,000 ETH locked in @MakerDAO smart contracts as of this morning 🎉. A slight rounding error away from 1% of the total ETH supply. pic.twitter.com/0ePQv6mWKm
— Mike McDonald (@mikeraymcdonald) November 13, 2018

For those of you who don’t know, MakerDAO is a project behind Dai, which is a second-generation stablecoin that offers issuance of US dollars on the Ethereum blockchain. Even though its mechanics are quite complex, Maker offers a helpful “for dummies” explanation that does not require one to be an expert crypto analyst in order to understand what’s it all about.

The author Gregory DiPrisco has briefly explained the difference between Dai and for instance, a traditional stablecoin like Tether, stating:

“You’re most likely familiar with stablecoins that hold USD in bank accounts and issue tokens on a blockchain that are ‘backed’ by these dollars. I call this legally-backed crypto, or an IOU coin, because if those bank accounts should ever be frozen or if the accountants defrauded token holders, the stablecoin now becomes an IOU on whatever’s left when they eventually get the bank accounts back (if they ever regain the bank accounts). Relying on the legal system to maintain crypto-tokens inserts an unreliable middle-man into the blockchain.”

What’s interesting is the following…

Even though the blockchain shows around 1 million in ETH locked up in Maker smart contracts, Dai’s token market capitalization is about a third of the figure, currently sitting at $72 million.

The way this system functions is simple – users pool Ether together (referred to as PETH) and are issued Dai tokens which are deposited and stabilized at $1. One term that is widely used in these discussions is “WETH” which is short for “wrapped Ether” and a concept of the MakerDAO.

At the time of writing, there is a total of 967,507.91 ETH locked in the primary Maker contract.

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Related Topics:$1 $1 million Contract DAO Eth Ethereum locked maker makerdao Smart

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Stefan

Stefan has been a Bitcoin Specialist for over 5 years. Providing daily news and updates for DC Forecasts.

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