MakerDAO Got a Lot of Funds Through Its Recent Auction

by 99Crypto

There have been accusations floating around that the Maker Foundation decided to place all winning bids into its debt auctions that happened recently. As expected, MakerDAO (MKR) has stringently denied the allegations despite the chatter happening amongst the public.

Cointelegraph got a hold of a statement made by the Maker Foundation stating that the company was not purchasing any MKR from the auctions. In the same statement, it was said that the Maker Foundation offers limited tech assistance to bidders. The Auction UI was cited as an example of this limited and technical assistance. It was stated that this assistance is "first-come, first-serve". This is done to help ensure the participants can take part it in the auctions effectively and timely.

This statement strongly emphasized that the limited assistance offered to bidders doesn't provide any key information or advantage. The Maker Foundation made a not to specify that no capital was given to these bidders as well. It's clear that their story comes in stark contrast to the allegations being made about their practices.

MakerDAO is a finance protocol that's been decentralized and functions as the underpinning to the Dai (DAI) stablecoin. These are typically minted when a user enters a debt position that's collateralized.

Since a good amount of these specific loans are currently being chosen against Ethereum (ETH), this recent crash in the crypto market has resulted in around $4.5 million of loans eventually becoming collateralized under their normal amount. This triggered the first debt auction in Marker's history.

During the auction, bidders pledged 50,000 'lots' of DAI in order to bet on around 40 batches of minted MKR tokens. The funds are being used to help balance the Maker Foundation's debt. Each lot saw initial bids of 250 MKR. However, the subsequent bids started decreasing by 3% at a minimum.

In total, the auction raised about 2 million DAI. There were 25 individual bidders who each averaged a price per lot of 269.3 MKR. Only time will tell how the Maker Foundation rebounds from this debt and if the money raised is enough to turn the tides.