In a bid to increase influence in Asia, the Maker Foundation has reached a deal to sell 5.5% of the total Maker (MKR) token supply, worth $27.5 million, the foundation announced on 19 December. Dragonfly Capital Partners and Paradigm, two crypto investment funds, are the buyers of the large volume of MKR tokens.
MKR tokens are used to govern and operate the Dai ecosystem. Dai is the first and most popular cryptocurrency-backed stablecoin, completely managed by self-governing smart contracts. The Dai token is pegged to USD with the goal being 1 Dai to always aim to equal 1 USD.
The collateral for the stablecoin is mainly ETH as the Dai ecosystem works on the Ethereum blockchain, however, with the new Multi-Collateral Dai (MCD), other assets might be used as collateral in the future.
The purchase of the $27.5 million of MKR will give the two aforementioned investments funds a chance to participate in governing the network. MKR tokens are used to vote on various decisions, helping steer the Dai ecosystem in the right direction.
“MakerDAO represents the promise of decentralized finance. The mechanism is an innovation in enabling global, permissionless access to credit,” said Charlie Noyes, partner at Paradigm. “We look forward to participating in this community.”
In addition to actively participating in the management of the stablecoin platform, the two funds will also make available their expertise and help Maker with their progress in the Asian market.
“Dai continues to be the stablecoin of choice in all global markets for its decentralization and overall stability,” said Rune Christensen, CEO of the Maker Foundation. “The support and expertise of Dragonfly Partners and Paradigm will give Dai an unparalleled advantage in driving innovation and adoption in Asia.”
As it stands, more than 100 million Dai exist in circulation, with over 16 million locked in the DSR contract. DSR stands for Dai Savings Rate and allows Dai holders to earn interest (4% at press time) by locking their Dai in the DSR contract.
Another amazing feature of the Dai ecosystem is completely permissionless margin trading. Investors can draw out Dai against their ETH, then purchase ETH with their Dai on an exchange. Using the new ETH, they can draw out more Dai and so on – all without the need for any third-parties.
This breakthrough in decentralized finance and the amazing application of game theory keeping the system intact is what’s causing the rapid growth of the Dai ecosystem – 27% average monthly increase in addresses holding Dai.
With Asia being the largest crypto market, it is only natural that the Maker Foundation becomes invested in popularizing its platform there. That is also very clear to the managing partner of Dragonfly Capital Partners Alexander Pack, who noted on the Asia expansion:
“Asia is the most important market for crypto in general. It is also home to the largest concentration of the unbanked and underbanked around the globe, which we believe represents enormous pent-up demand for decentralized financial products. Dai has quickly become the market leader in decentralized finance and we look forward to helping it grow and extending its leadership in Asia and the rest of the world.”
With a growing platform that allows for permissionless access to credit, Maker’s Dai wants to popularize a new way of financing, one that does not depend on countless middlemen and third-party actors but rather, on individuals making their own decisions pursuing their own goals.