Maker Foundation Rejects Accusations of Participation in Its Debt Auctions

MakerDAO (MKR) has denied accusations that the Maker Foundation placed the winning bids in all of its recent debt auctions.

In a statement shared with Cointelegraph, the Maker Foundation states that it “is not purchasing MKR in the auctions.”

Maker Foundation provides “limited technical assistance to some bidders”

“Similar to how the Foundation created the Auction UI,” the foundation states that “it has offered limited technical assistance to some bidders on a first come, first serve basis to facilitate their timely and effective participation in the auctions.”

The statement emphasizes that the assistance “in no way provides informational or any other advantage to those bidders, including capital.”

Crypto crash triggers MakerDAO debt auction

MakerDAO is the decentralized finance (DeFi) protocol underpinning the stablecoin Dai (DAI) — which are minted when users enter a collateralized debt position.

With a large number of these loans being taken against Ethereum (ETH), the recent crypto market crash resulted in $4.5 million worth of loans becoming under-collateralized — triggering Maker’s first-ever debt auction.

The auctions saw bidders pledge 50,000 DAI ‘lots’ to bid on 40 batches of newly minted MKR tokens — with the funds being used to balance Maker’s debt. The initial bid for each lot was 250 MKR, with each subsequent bid decreasing by a minimum of 3%.

The auctions have raised 2 million DAI from 25 unique bidders with an average price of 269.3 MKR per lot.