Introduction
Decentralized Autonomous Organizations (DAOs) like MakerDAO operate transparently, with all financial data on-chain. However, interpreting this data requires deep analysis. This article examines MakerDAO’s 2018 revenue streams, focusing on value creation and redistribution among stakeholders—keepers, PETH holders, and MKR token holders.
Key Revenue Streams
1. Stability Fees
Stability fees are interest payments by CDP holders on their DAI debt. In 2018:
- Rate Adjustments: Fees fluctuated from 0.5% to 2.5%, impacting revenue.
Accrued vs. Collected Fees:
- Accrued Fees: Interest accumulates until CDP closure.
- Collected Fees: Paid upon CDP repayment (462.81 MKR burned, worth 183K DAI).
- Fee Elimination: Fees are waived during liquidations, reducing potential income.
2. Liquidation Penalties
A 13% penalty on liquidated CDPs became a major revenue source during the 2018 bear market:
Process:
- Liquidated collateral is transferred to a "tap" contract.
- Keepers receive a 3% PETH discount to incentivize quick purchases.
- Surplus DAI buys back and burns PETH (21,591.48 PETH burned, worth 4.13M DAI).
- Inefficiencies: Low ETH prices led to 158K DAI in keeper discounts and 25.1K DAI in losses.
Value Distribution
| Stakeholder | Benefits Received (2018) |
|-------------------|---------------------------------|
| Keepers | 158K DAI in discounts |
| PETH Holders | 4.13M DAI via PETH burn |
| MKR Holders | 183K DAI via MKR burn |
Key Insight: PETH holders and keepers captured most value, while MKR holders saw limited returns due to SCD’s design.
Future Improvements with Multi-Collateral DAI
- Eliminating PETH: MKR holders will directly benefit from liquidation surpluses.
- Reduced Fees: Lower liquidation penalties and optimized auctions may decrease keeper discounts.
FAQs
Q1: Why do MKR holders receive minimal revenue in SCD?
A: SCD prioritizes DAI stability over MKR holder profits, redirecting liquidation gains to PETH holders.
Q2: How does Multi-Collateral DAI address these issues?
A: It removes PETH, allowing MKR holders to capture liquidation surpluses and reducing systemic inefficiencies.
Q3: What’s the long-term outlook for MKR?
A: Patience is key—MakerDAO’s focus on DAI stability fosters sustainable growth, though short-term liquidity demands may deter some investors.
👉 Explore decentralized finance (DeFi) opportunities
👉 Learn about DAO governance models
Conclusion
MakerDAO’s 2018 performance highlights the trade-offs in its SCD design, favoring stability over immediate stakeholder rewards. Transitioning to Multi-Collateral DAI aims to rebalance this equation, aligning incentives for MKR holders while maintaining DAI’s robustness. For investors, understanding these dynamics is crucial to navigating MakerDAO’s evolving ecosystem.
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