A Tale of Two Makers: Innovative product, inefficient value capture

With the help of explicit earnings data within the Maker system — visible via smart contracts on the Ethereum blockchain — we calculated relative valuation metrics for Maker such as Price to Burn (Interest Earnings) and Earnings Yield (Burn Yield). Our findings show that while Maker has achieved a fairly stable peg with its stablecoin DAI (daily price standard deviation of $.015 since Jan 2018), the system hasn’t been able to capture and distribute interest payments (revenue) to its MKR stakeholders adequate to its current total market value.

Using Stability Fees, or the interest rate paid upon closing a CDP, we can calculate the total amount of interest paid by CDP holders to date.

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