Market Meltdown: ETH DeFi Key Player, MakerDAO Weighs up Emergency Closedown

The aggregate dollar value of ETH locked in DeFi protocols nosedived by over 20% as accounted for in US Dollars (dropping from $889 million to $691 million). This erased the recent increase of 200,000 ETH recorded recently in the aggregate value.

MakerDAO, ETH DeFi key player, loans DAI for collateral in the form of Ether. As ETH plunges, MakerDAO’s protocol enters the short sell position automatically.

When Is the Shutdown Likely?

A spokesperson from MakerDao hinted on its persistent efforts to surveil, evaluate and settle the recent situation.

In a shutdown scenario, the crypto market will surge with nearly 2.4 million ETH, which will cause the price to plummet. This will result in recent CDPs (Collateralized Debt Positions) being frozen, auctions finalized while the leftover DAI can be redeemed for ETH at a fixed price created at the moment of a shutdown.

A shutdown, if it happens, will cause DAI holders to take a bath, accepting a valuation or return that is less than optimal. MKR tokens will also follow in this deluge by taking a bath as revealed in MakerDao social contract in the event of a shutdown.

Image Credit: Coin360, Shutterstock

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