Maker Allies Create Syndicate To Assure Auction Goes Well

All of the Maker allies gathered to form a syndicate to make sure that the collateral auctions go well, as we are reading further in the Maker news today.

The Defi community got together to save one of the most promising project-Maker, while others suggest that such intervention will be quite bearish in these market conditions. MakerDAO will sell the governance token MKR on the platform to raise funds and to correct its deficit with the help of the other Maker Allies.

The members of the DeFi community formed a backstop syndicate to make sure that everything goes according to plan but many didn’t agree with the initiative. During the major congestion on Ethereum, the bidders exploited the entire auction system of Maker after-acquired ETH and BAT collateral for zero cost. Since the loans were shut down but no DAI was received in return while the Maker system is running on a deficit sitting on $5.67 million. In order to restore the entire system, MakerDAO is auctioning about $4.5 million of MKR in order to cover the deficit. It is still unknown whether they plant o increase the amount as the deficit increases.

If confidence in Maker goes away, the project could not be able to auction off the MKR token which will cause further distress to the system. To reduce the risks, all of the members of the community that are mostly MKR holders, are forming a syndicate to purchase all of the unsold MKR in the auction. The co-founder of Dharma, Brendan Forster explained that the initiative started with two of the Forster’s colleagues 0age and Nadav Hollander:

 “The idea for the syndicate emerged right when confidence in DeFi and Maker specifically was at its lowest. We were hearing many concerning suggestions from community members, which did not align with our own confidence in the system. ‘’

The Maker allies formed a syndicate of a number of popular individuals and projects in the DeFi ecosystem including Ryan Sean Adams, Richard Burton, Dharma and Aave among many others. The syndicate is still in formative stages and there is little clarity on how they plan to function at all and support the MKR auction. According to the outline that was drafted by Forster, the syndicate will ensure that the price of MRK reaches a pre-determined price level during the auction and they will then step in and buy the tokens.