A lot of cryptocurrency enthusiasts keep a close eye on the DeFi industry. However, one recent incident affecting MakerDAO still sparks ample discussions.
It is interesting to see how DeFi is thriving these days.
DeFi Isn’t Ready for Mainstream Use
The industry has been embraced by the masses fairly quickly.
This is primarily because many people want to earn passive revenue through their existing crypto assets.
That being said, one also has to acknowledge how DeFi is still in its infancy stage.
Issues and problems will arise sooner or later, as MakerDAO has experienced already.
A price crash affecting Ethereum – and all other markets – a few weeks ago still leaves its mark today.
Many people had their collateral liquidated altogether, with over a third of liquidations being virtually free.
More specifically, the underlying ETH was worth less than the corresponding DAI issued because of it.
The collateral being devalued is then auctioned off, so to speak.
Interested parties can then use their DAI to bid on the collateral and acquire it.
In the end, over $8 million ETH was liquidated for a price of $0.
A very uneasy situation that has yet to be addressed properly.
It is also one of the major growing pains the DeFi industry will have to go through in the years ahead.