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MakerDAO Surges Over 25% as Community Votes for Real-World Collateral to Get DAI Loans

ยท in Breaking, Crypto News
Carlos is an international relations' analyst specializing in cryptocurrencies and blockchain technology. Since 2017, Carlos has written extensively for UseTheBitcoin and other leading cryptocurrency sites; with over 2,000 articles published.

MakerDAO (MKR), the largest Decentralized Finance (DeFi) project in the market has surged by over 20% as the community voted to introduce new collateral with real-world assets. This would allow companies and individuals to get access to the decentralized finance market without necessarily being part of the crypto ecosystem. 

Real-World Collateral for Loans

MakerDAO has already recovered from the coronavirus pandemic and the sell-off in cryptocurrencies. Indeed, the MKR digital currency was able to skyrocket 100% since the last days of May from $350 to over $700 per MKR. This is due to two main things, the first one is related to MRK surging due to Coinbase Pro listing. The second reason is due to the MakerDAO community voting in order to use real-world assets to get collateral for DAI loans. 

MakerDAO is currently providing DAI loans to users that lock up different cryptocurrencies, including Ethereum (ETH), Wrapped Bitcoin (WBTC), Basic Attention Token (BAT) or USD Coin (USDC). Users that use these funds as collateral can easily get a DAI loan to do what they want with it. Of course, the collateral can be executed automatically if it passes a certain threshold. 

The proposal would require a new protocol to be developed by the crypto and blockchain company Centrifuge and it would help new users enter the DeFi market. Specifically, individuals would be used to use real-world assets that will be tokenized as ERC-20 securities. These tokenized assets will then be available for use as collateral to get DAI coins. 

It is worth mentioning that the community is also thinking about Maker DAO using other virtual currencies as collateral for DAI loans. This could be very useful to expand the reach of MakerDAO and the entire ecosystem and to help crypto holders get DAI loans. The other virtual currencies that are being proposed by the community include Decentraland (MANA) and 0x (ZRX), among others. 

These two digital assets are tokens that have been in the market for several years promoting their own projects in the space. While ZRX worked as a smart contract solution to provide liquidity to the market and the Ethereum blockchain, Decentraland was created as a blockchain-based virtual world in which users can buy, sell, create, experience and monetize content and applications. In addition to it, users can also purchase LAND, which represents a portion of the virtual world as an ERC721 token. 

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