Share page
MakerDAO's interest rate, Self-regulation for crypto markets – COIN360
March 12  |  1 min read

Crypto Leverage

BeQuant Analytics, a daily cryptocurrency market analysis contributor

The cautious start to the week is, in part, driven by the reaction to the move by MakerDAO, a decentralized autonomous organization that provides crypto collateralized loans, that voted to raise interest rates from 1.5% to 3.5%. If the peg does not stabilize at $1.00, the interest rate will be again increased to 5.5%. As a guide, the stability fee (or the interest rate) is increased to encourage borrowers to repay their loans, thereby increasing the price of Dai. On the other hand, the fee is decreased to incentivize Ethereum holders to take out loans, thereby increasing the supply of the stablecoin. However, even with the higher fee, don’t expect a rush to redeem their ETH, especially not from the accounts that used the facility to add to (leverage) their ETH position. In fact, given the reduction in block creation times from 19 seconds to roughly 14, coupled with a lower difficulty level (a direct result of EIP-1234), miners have not been significantly impacted by the reduction in block reward from 3 ETH to 2 ETH, which points to a bullish outlook for ETH and therefore an even higher use of leverage, leading to more inflow into MakerDAO.

In other news, the United States Securities and Exchange Commission (SEC) Commissioner, Hester M. Peirce, has argued in favor of self-regulation for cryptocurrency markets. Despite advocating for a lighter regulatory touch when possible, she affirmed that security offerings must comply with the SEC’s registration requirements. Furthermore, she emphasized that major crypto trading platforms must aim to register with the agency as either exchanges or as alternative trading venues in order to be able to compliantly list security tokens.

Finally, Samsung has revealed the cryptocurrency wallet for its recently launched flagship phone, the Galaxy S10. According to a report from CoinDesk Korea published on Sunday, the Samsung Blockchain Wallet is currently compatible only with ETH and Ethereum-based ERC20 tokens. Keep an eye on the Ethereum network and Dapps usage stats to gauge how the network will cope over the coming months. Let’s see what other tech giants, such as Facebook and Apple, come up with when they enter the cryptocurrency market.


CBOE Bitcoin futures (XBT) will expire on 13.03.19

CME Bitcoin futures will expire on 29.03.19

Thank you for reading,

The BeQuant’s Analytics team