The largest base of all DeFi applications and independent developers, the decentralized autonomous organization MakerDAO, may resort to an emergency stop due to a sharp depreciation of the ETH coin. The emergency shutdown of the functionality was facilitated by the lack of provision of DAI stablecoins, which belong to the cryptocurrency exchange platform. In addition, due to the overload of the Ethereum network as a result of the collapse of the market and the massive exchange of cryptocurrencies, there was a multiple increase in commissions – in total, the amount of commission fees amounted to about $ 550 million in less than a day. This indicator exceeds the average mark by five times, and large ETH positions were liquidated during the fall in prices.
As for MakerDAO, if its work is stopped, the cryptocurrency market will receive about 2.5 million ETH tokens, even at low cost. However, the management of the cryptocurrency exchange site says that the situation is under control, and the community works hand in hand with the developers, providing an independent assessment of the current situation. Since the protocol used by MakerDAO provides network participants with the opportunity to take a loan in DAI’s native tokens to ensure ethereum, this automatic system simply does not cope with its purpose due to a sharp decrease in cost.
To avoid network congestion and failure of the main functionality, the platform management is considering a decrease in the number of DAI tokens that the user can use while blocking the cryptocurrency. In addition to the aforementioned system shutdown, developers can also increase the duration of auctions aimed at selling ETH and receiving DAI. In the event of a temporary shutdown of the system, the stablecoin of the platform will be redeemed at a fixed price of ethereum at the time of the stop – in addition, it will actually be equated to ETH, which makes it absolutely unprofitable for the implementation of an online cryptocurrency exchange.
For this reason, most users do not support the shutdown solution, however, the creators of MakerDAO claim that this may be the only possible option to stabilize the current situation. In addition, the MakerDAO system was not ready for emergency circumstances, so the developers do not have a clear understanding of what needs to be done. Based on the lack of response procedures, it is not yet known which solution the platform will follow to preserve the benefits of DAI and ETH, however, in the event of a system shutdown, the consequences can be unpredictable for both stablecoin and the entire community.