Money 2.0 Stuff: Free-price auctions

I have previously described non-custodial credit facility, MakerDAO, as Ethereum’s central bank, which perhaps isn’t the best analogy but I think it roughly holds up. MakerDAO has a set of governors in the form of MKR token holders. Like traditional central bankers, MKR holders set monetary policy and risk parameters with the primary objective of curbing inflation. MakerDAO is in itself a systemic risk to Ethereum’s Open Finance ecosystem. Before last week, things were holding up pretty well.

Oh, and then last week happened, right. More specifically, Thursday happened. Ether, along with some other assets, fell about 50% in a matter of minutes. Transaction fees spiked, with Ethereum users scrambling to sell assets, buy assets, arbitrage DEX spreads, avoid margin calls, and liquidate undercollateralized loans.