Researchers have reportedly uncovered an anomaly about MakerDAO’s Sai stablecoin, which is the legacy version of Dai. In a previous iteration, Dai could only be backed by Ethereum, but a November 2019 update allows for multiple types of collateral to be used.
1 Address, 27% of CDPs
MakerDAO is a bit complex on first glance. It consists of collateralized debt positions and stablecoin tokens.
The way MakerDAO works is that a user creates a CDP, allowing them to issue a certain number of Sai (previously Dai) against the Ethereum they’re staking. If the later smart contract, which allows for a range of assets to be staked, is used, then the asset issued is called a Dai.
In either case, the goal is for the token to hold a rough value of a dollar. For this to work, the collateral is often a good bit more than the amount of debt based instruments issued against it.
Digital Assets Data is a research group which handles blockchain tokens such as Dai and Sai, and it has some interesting findings about MakerDAO. For starters, most of the roughly 155,000 CDPs opened on the Ethereum-only version of Dai were under .05 Ether. At various times this could have been as much as $50.
Perhaps more interesting for the amateur anthropologists among us is that one person appears to control over a quarter of all the debt positions in the Sai stablecoin part of the MakerDAO system.
A representative from Digital Assets Data told competitor Cointelegraph:
There is one address that maintains 27% of the value locked in CDP’s.
It’s possible that this massive 27% holding address is actually a smart contract itself, somehow working with MakerDAO and potentially servicing a large exchange or something like that. That much is unclear, according to Digital Assets Data.
It is possible that one or more of those addresses could be smart contracts that contain ETH as a part of MakerDAO, and do not represent a single entity. Without a significant amount of additional research, we cannot commit to singling out/identifying these addresses.
The same is true of the new multi-collateral Dai system, which allows you to use a variety of tokens to back up to new stablecoins. MakerDAO has previously said that virtually any asset could be considered, but to date the community has only considered 7 assets, including BAT and OMG. Each asset under the MCD system is thrown in a “vault.”
Digital Assets Data also found that a single address controls a great deal of assets in the new system. Could this simply be rollover from the old system? When the new version was rolled out, anyone holding legacy Sai contracts was allowed to roll them over into new ones.
The new Vaults system has a similar distribution, with one address holding 15% of the value locked. As Maker continues to grow, we will see how these distributions play out and if there is more adoption within the lower bins.
In the past, single users have gained a lot of power in a number of blockchain settings. One time in Dash, a single miner was able to do most of the mining, earning most of the reward through a number of addresses which all fed back to a centralized place.
Fortunately, in MakerDAO, there’s no risk if one user has a lot of CDPs. Nothing harmful can come of that.
Ultimately, down the line, as more things come on the blockchain, systems like MakerDAO will make it possible to mint dollars against assets like real estate and gold, through the token collateralization program and the tokenization of more assets.
The blockchainization of all the things, essentially.