Altcoin
MakerDAO: Users express discontent over latest proposal, but it’s not all bad news
MakerDAO’s rising DSR attracts whale activity on the protocol. However, the network faces scrutiny as users are unable to use Spark Protocol with a VPN.
- MakerDAO’s DAI savings rate rose drastically to 8%.
- The network was criticized for not allowing users of VPNs on its Spark Protocol.
The overall DeFi market took a hit over the last week due to the recent Curve exploit. On the contrary, MakerDAO[MKR] observed growth in its protocol and managed to see a surge in its TVL.
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More than meets the DAI
The growth on the MakerDAO protocol could further be exasperated through the rise in its DSR (DAI savings rate). For context, DSR is the interest rate offered to users who hold DAI stablecoins in a specific savings contract within the MakerDAO ecosystem.
It incentivizes users to lock their DAI holdings in the contract, contributing to the stability of the DAI token’s value and the broader decentralized finance (DeFi) ecosystem.
Furthermore, as stated by EmberCN, a significant holder executed a transaction yesterday involving the sale of 5640 ETH in exchange for DAI. This individual then utilized 5400 wstETH to secure a loan of 4 million DAI.
Subsequently depositing an impressive 14.32 million DAI into the MakerDAO platform. As a result, the TVL within the DAI pool surpassed an impressive threshold of $400 million.
Source: MakerDAO
MakerDAO faces criticism
However, despite the growing DSR and high activity on MakerDAO, the protocol recently came under scrutiny. Criticism rose against the MakerDAO protocol following its implementation of a measure to block virtual private network (VPN) users from accessing its recently launched lending platform, Spark Protocol.
Maker’s efforts to prevent users from the United States from accessing the crypto lending platform led to this action. A notice within Spark Protocol’s terms of service update on May 9 cautions against the utilization of VPNs to evade this restriction.
Realistic or not, here’s MKR’s market cap in BTC’s terms
Reacting to this development, DeFi analyst Chris Blec expressed his strong disapproval in an August 6 tweet, emphasizing that the decision effectively constitutes a comprehensive ban on VPNs worldwide, extending beyond the boundaries of the United States. This move has sparked widespread debate and concern within the DeFi community.
Others also stated that this move by MakerDAO brings into question whether MakerDAO’s decentralization itself.
I’m not sure if @MakerDAO’s RWA is really DeFi, when people interested in 8% deposit saving rate $DAI try to have access to the UI, it tells those in their ‘restricted countries list’ that your IP address is blocked.
Decentralized huh? IP address screening ? pic.twitter.com/NJUAFzQa5H
— DeFi Cheetah ? ¤ ??? (@DeFi_Cheetah) August 7, 2023
