TL:DR
As outlined in the new whitelisting process, this is a proposal to increase the MKR capFactor from cap3 to cap4 ($10M -> $30M). MKR has exceeded $10m adjusted liquidity for a period of time. MKR bring good liquidity to the Balancer ecosystem.
The Proposal
This is a proposal to increase the MKR cap Tier from cap3 to cap4 ($10M -> $30M). MKR currently has $16M in adjusted liquidity and has probably surpassed it’s $10M cap for a month.
MKR brings useful liquidity to the Balancer ecosystem. Before, Uniswap used to be the most popular DEX for trading MKR.
What is MKR?
MKR is a DeFi large cap, it currently has a $600M market cap. There’s currently $1.5B locked in MakerDAO, and 425M DAI has been minted.
SCD (Single Collateral DAI) was launched in December 2017. MCD (Multi Collateral DAI) was launched in November 2019.
MakerDAO is a decentralized credit platform on Ethereum that supports DAI, a stablecoin whose value is pegged to USD. Anyone can use Maker to open a Vault, lock in collateral such as ETH, BAT, or WBTC … and generate Dai as debt against that collateral. Dai debt incurs a stability fee (i.e., continuously accruing interest), which is paid upon repayment of borrowed Dai. DAI is collected as system surplus, and then used in FLAP auctions to burn MKR.
MKR can also be used as a governance token to govern the system. MKR holders also act as the last line of defense in case of a black swan event. If system-wide collateral value falls too low too fast, MKR is minted and sold on the open market to raise more collateral, diluting MKR holders.
Footnotes:
Original CapFactor Proposal: capFactor: capping eligible liquidity to $10M per token
New Whitelisting Process: Proposal to Update the Whitelist Process