MakerDAO Loans Worth $5 Million Now Liquidated, Although There Is Not Much To Worry
MakerDAO Loans Of $5Million Is Liquidated, Although There Is Not Much To Worry
Taking a loan or running a lending platform is always problammatic and MakerDAO are facing the harsh reality now.
MakerDAO is a Santa Cruz-based cryptocurrency startup that uses the stablecoin DAI and that has been expanding in the cryptocurrency market. DAI is a stablecoin that was developed by Rune Christensen and other developers.
Steven Becker, the COO of MakerDAO, says that their virtual currency is legally-backed crypto. Relying on the legal system to maintain cryptocurrencies insert an unreliable middle-man into the blockchain. MakerDAO uses a Byzantine micro-economy that is built on top of Ethereum (ETH).
CDP Saver Aims To Solve Liquidity Issue
CDP Saver is a platform that aims to make CDP liquidations a thing of the past, offering a simple to use solution that can automatically keep your CDP's collateralization ratio above some predefined value.
Not many CDP users are aware of this, but forceful liquidations are not necessary for the stability of the MakerDAO system. Instead of allowing liquidations, CDP owners can “unwind” their CDPs by withdrawing a part of the collateral, exchanging it to Dai and then using the newly obtained Dai to repay the CDP’s debt, thus raising collateralization ratio significantly. This is what the MakerDAO platform does on your behalf when liquidation becomes necessary, except they sell all the collateral at a below the market price and charge you a 13% liquidation fee.
They have put a lot of thought into implementing the platform in such a way that we are not allowed to do anything malicious towards users, even if we wanted to. You never need to transfer the ownership of the CDP to anyone and CDP Saver’s smart contract only needs authorization for specific functions to run and only when a certain condition has been met.
To help provide a better, more complete user experience, CDP Saver will also include all features needed for day-to-day CDP management all neatly packed in a simple and clean Dashboard.
The automatic pay down debt, isn't released yet, currently, a user can trigger the ‘pay down debt' and they call it to repay manually with the dashboard, there is also a reverse feature called boost, which will draw Dai, convert to Eth, and add that Eth to the CDP.