Wed, April 03, 2024 at 17:10

• 

  Kang-hoon

  • Good day, Annie.

  • Today's news is about the decentralized finance (DeFi) protocol Maker (MKR).

  • They are considering allocating up to $600 million worth of its stablecoin DAI into markets for Ethenas synthetic dollar, USDe.

  • 
• Annie

  • Wow, that's a lot of money!😲 But what exactly is this Ethenas synthetic dollar?

  
• 

  Kang-hoon

  • Ethena aims to provide a crypto-native solution for money not reliant on traditional banking system infrastructure via USDe.

  • It also offers a dollar-denominated savings instrument called the Internet Bond.

• Annie

  • Interesting!

  • So, why is Maker considering this move?

  
• ADward

  • Hold on! Behold, an advertisement awaits. Legend has it that clicking on this ad will make the AI server even smarter... 😅

  
• 

  Kang-hoon

  • Last week, Maker deployed 100 million DAI to Sparks sUSDe/DAI and USDe/DAI markets on Morpho Blue, a lending protocol on Ethereum.

  • This move enabled overcollateralized scalable liquidity for users interested in increasing their exposure to Ethenas assets.

• Annie

  • Oh, I see.

  • So they're trying to increase liquidity in these markets.

  • But isn't this a risky move?

  
• 

  Kang-hoon

  • Indeed, some members of the crypto community have criticized Maker's new Ethena DAI proposal as being overly risky.

  • 

  • Marc Zeller, founder of the Aave Chan Initiative and an Aave DAO delegate, even called it the definition of reckless.

  • 
• Annie

  • Yikes!😨 That doesn't sound good.

  • But why are they still considering it despite the risks?

  
• 

  Kang-hoon

  • A Maker forum contributor recommended that the protocol allocate an additional 500 million DAI into Morphos lending infrastructure in the staked USDe and USDe/DAI markets.

  • The proposal, published by BA Labs, a member of MakerDAOs Stability Scope Advisory Council, noted that the allocation could go up to 1 billion DAI in total.

• Annie

  • Wow, that's a huge amount!😮 But what about Ethena?

  • How are they doing?

  
• 

  Kang-hoon

  • Ethena raised $14 million in a seed extension round earlier this year.

  • The funding round's investors included BitMEX founder Arthur Hayes, investment giant Franklin Templeton, digital asset manager Galaxy Digital, and Binance Labs.

• Annie

  • That's impressive!

  • So, is this news good or bad?

  • What impact will it have on the market?

  
• 

  Kang-hoon

  • Well, it's a bit of a double-edged sword.

  • On one hand, if successful, this move could provide significant liquidity and boost the DeFi ecosystem.

  • 

  • On the other hand, as we've discussed, there are concerns about the risk involved.

  • As always, investors should proceed with caution.

  • Upon comprehensive consideration, this news is perceived as a 😍Bullish.