Coin News

London-based ONEm Communications has announced the launch of its mCoin program across Africa. Designed to be a hybrid currency, mCoin is a digital currency that can be transferred over text or through the smartphone app. Africa is a continent with millions of people who have access to mobile phones but little to no internet connectivity. ONEm wants to bring the benefit of cryptocurrency to millions of the unbanked in Africa through the mCoin program.

ONEm Communications is a tech startup that develops advanced platforms supporting an ecosystem of services. The ecosystem is a set of interactive services that seeks to transform the way people communicate and access information on mobile.

In an interview with Bitcoin Magazine, ONEm Co-Founder & CEO Christopher Richardson said the reception for the mCoin in Africa has been “tremendous.” He believes the blockchain can be combined with mobile technology to connect the unbanked in Africa.

"We believe when combined with informational and community-based services; this can leverage their happiness by giving them simple and effective tools that extend their capabilities. Africa is just the beginning; we will be launching in many countries all over the world to allow everyone to enjoy cryptocurrency on ordinary mobiles."

Crypto Wallet

The ONEm Wallet is a digital wallet that allows users to send mCoin to others in the community, by means of a wallet address in the form of a username. Users can also send mCoin from an offline SMS wallet to the digital wallet. Richardson, who has experience in the telecommunications sector, says the SMS wallet is secure as it's not connected to the internet. The SMS wallet was created to mirror a cold storage wallet.

The SMS wallet works with a set of shortcodes that provides options to the user, such as sending mCoin and viewing the wallet address. According to the company, users can send mCoin to another SMS wallet or to a digital ONEm Wallet using the shortcodes.

While Richardson believes the funds in the offline SMS wallet are secure, there is still a high risk of losing tokens if the registered phone falls into the wrong hands. Also, unlike hot wallets, the SMS wallet doesn't have the capability to enable two-factor authentication, which acts as an extra layer of security for wallets.

Earning and Trading mCoin

For now, users can only earn the token by participating in a “Pseudo-Mining” program — a form of mining activity that rewards users for their activities on the platform with points (mPoints), which are then converted into mCoin. The company plans to add an option for users to purchase mCoin with their phone credit in the future.

Richardson says the users will be able to trade their mCoin on both local and global exchanges, but he refused to mention any names. mCoin has a growing community of over 80,000 users, and it currently operates in seven African countries.

mCoin is not to be confused with M-Coin, the mobile payment solution for web and mobile devices.

You can learn more about mCoin here.

A man known as “Tokyo Whale,” for the enormous amount of bitcoin he controls, confirms he unloaded another big chunk of it earlier this year.

Nobuaki Kobayashi, the trustee of now-defunct Tokyo exchange Mt. Gox, liquidated 24,658 bitcoin and 25,331 bitcoin cash between the creditors’ meeting on March 7, 2018, and the start of civil rehabilitation proceedings on June 22, 2018, according to an announcement posted on the Mt. Gox website on September 25, 2018.  

As a result, the estate hauled in about 26 billion yen ($230 million) in cash. According to Bloomberg estimates, the latest sale received an average of $8,100 per bitcoin and $1,190 per bitcoin cash. Current values of the coins sit at $6,420 and $438, respectively.

This is not the first time Kobayashi has offloaded a huge chunk of crypto. Over a period that correlated with a decline in market prices after December 2017, the trustee sold more than $400 million worth of bitcoin and bitcoin cash. Some accused him of collapsing the markets by selling on spot markets, rather than going through auction or an over-the-counter platform, which is how most big players unload heaps of cryptocurrency.

While not specifying how the coins were sold, Kobayashi has denied those claims. In a document posted on June 2018, he stated that “upon consultation with cryptocurrency transaction experts, Bitcoin and Bitcoin Cash were sold in a manner that had no effect on market price and not by ordinary sale on an exchange, while ensuring the security of the transaction to the extent possible.”

Mt. Gox was forced into criminal bankruptcy in 2014, after more than 850,000 bitcoin vanished. The losses, which amounted to $473 million at the time, would be worth roughly $5 billion today. Since then, Mt. Gox creditors have been waiting to get some of that money back.

Meanwhile, bitcoin has risen significantly in price. Also, a code fork last year resulted in a second cryptocurrency, bitcoin cash, which any bitcoin holder at the time was entitled to.

Some wanted the coins, not the cash. In June 2018, creditors won a victory after the Tokyo District Court moved the exchange from bankruptcy to a civil rehabilitation process. This opened up the possibility that creditors could get back their bitcoin (and bitcoin cash), as opposed to a cash payout equal to the value of their holdings when the exchange collapsed.

A script that monitors the cold wallets associated with Mt. Gox indicates the estate still has 137,891 bitcoin and bitcoin cash, worth about $945 million. Whether any more of these funds will be sold off in the future is unclear. In June 2018, Kobayashi said that “nothing has been determined.”

Mt. Gox traders who lost funds still have until October 22, 2018, to file claims. A court still has to approve the rehabilitation plan.

Based on blockchain technology, most cryptocurrencies have an open and public ledger of transactions. While this is required for these system to work, it comes with a significant downside: privacy is often quite limited. Analytics companies and other interested parties — let’s call them “spies” — have ways to analyze the public blockchains and peer-to-peer networks of cryptocurrencies like Bitcoin, to cluster addresses and tie them to IP addresses or other identifying information.

Still, unsatisfied with Bitcoin’s privacy potential, several cryptocurrency projects have launched over the years with the specific goal of improving on Bitcoin’s privacy features. And not without success. Several of these “privacycoins” are among the most popular cryptocurrencies on the market today, with four of them taking top-50 spots in coin market capitalization rankings.

That said, Bitcoin does have some privacy features which, as this month’s cover story details, have been improving in recent months and are set to improve further in the near future. This miniseries will compare different privacycoins to the privacy offered by Bitcoin, and to the privacy offered by other privacycoins.

In part four: Zcash

Background

The origins of Zcash (ZEC) can be traced back to Zerocoin, which was first proposed in 2013 by Johns Hopkins University professor Matthew D. Green and his graduate students Ian Miers and Christina Garman. Zerocoin was designed as a privacy-enhancing protocol extension for Bitcoin to let users “burn” coins and bring an equal amount back into circulation later. Although transaction amounts could be a giveaway, there’d be no way to link the “new” coins to the burned coins otherwise.

Later that same year, Green announced a “new version of Zerocoin,” which would come to be called Zerocash. Zerocash was not designed as a Bitcoin protocol extension but as an entirely new protocol. It improved on Zerocoin by also hiding the amounts, while at the same time offering a big efficiency gain by decreasing the size of transactions by 98 percent.

All this was possible thanks to a relatively new piece of crypto-magic known as a Zero-Knowledge Succinct Non-Interactive Argument of Knowledge, or “zk-SNARK.” In short, zk-SNARKs allow users to prove possession and validity of certain information without revealing that information to anyone and without needing to interact with anyone.

One year later, in 2014, cryptography security company Least Authority, headed by former DigiCash employee and well-known cypherpunk Zooko Wilcox-O’Hearn, spun up a sibling company: the Zerocoin Electric Coin Company (or Zcash Company). With Zooko as CEO and Green, Miers, Garman and other academics as co-founders, the Zcash Company raised funds from prominent names in the cryptocurrency and privacy space. Adding more cryptographers and engineers to the team over the following years, the Zcash company ultimately forked the Bitcoin codebase in 2016 to launch an implementation of Zerocash as a new cryptocurrency: Zcash.

While there are plans to transfer governance of Zcash to the newly erected, non-profit “Zcash Foundation” at some point in the future, for now Zcash is still maintained by the for-profit Zcash Company. This company, as well as investors in the project, receive 20 percent from the Zcash block reward during the first four years of its existence, called the “founders reward.”

Zcash currently sits in the 21st spot on altcoin market cap lists and has been hovering around there for some time. While this makes it only the third-highest ranked privacycoin by market cap, Zcash has received some notable endorsements, for example, from NSA-whistleblower Edward Snowden.

Privacy

As a codebase fork of Bitcoin, Zcash works fairly similarly to Bitcoin. In Zcash, however, there are two types of addresses that do something very different. Regular addresses are called “transparent addresses” or “t-addresses” (They start with a “t”). When ZEC moves from a t-address to another t-address, it looks like a Bitcoin transaction and offers similar levels of (non-)privacy.

But there is also another type of address: “shielded addresses” or “z-addresses.” Z-addresses (“inputs” or “outputs”) aren’t actually visible on the blockchain: they are encrypted. Further, funds held by z-addresses are encrypted as well. The cryptographic magic of zk-SNARKS lets anyone verify that transactions with z-addresses are valid according to the Zcash protocol rules.

As such, Zcash allows for interesting types of privacy-preserving transactions. If t-addresses send money to several z-addresses, for example, it’s not revealed where the money is actually going to. At the same time, if z-addresses send money to t-addresses, it’s not revealed where the money is coming from.

But most interestingly, when only z-addresses are involved in a transaction, the whole transaction is effectively encrypted. In what is called a “shielded transaction,” where the ZEC is moving from, where it is moving to and how much is moved are all completely hidden. Except for the payer and the payee, no one learns anything apart from a minimum amount of metadata: the time of payment and the fee. (Note: users do have the option to share their personal information with a “view key.”)

In effect, all this means is that when coins are sent to a z-address, they “disappear” in a pool of encryption, sometimes referred to as the “shielded pool.” Basically any and every subsequent shielded transaction could be spending (some of) the coins, and any shielded transaction after that could spend them again. Or not. The coins may also sit tight on the same address — or they could be moved back to a t-address.

When users move though the encrypted pool, Zcash offers near-perfect privacy.

Weaknesses

Although Zcash does not offer fully perfect privacy, the weaknesses are subtle and, in some cases, temporary.

Zcash’s main weakness is probably that creating a shielded transaction is currently computationally heavy. Requiring several gigabytes of memory (RAM), it can take well over a minute to generate a shielded transaction on a good laptop, while generating a shielded transaction on a phone is practically impossible. This means that few users actually make shielded transactions which, in turn, means the anonymity set for those who do use shielded transactions is relatively small, weakening privacy overall.

That said, an upcoming Zcash protocol upgrade (hard fork) is set to solve the problem of heavy transactions almost entirely. Dubbed “Sapling,” Zcash researchers have found a way to cut memory usage for shielded transactions down to 40 megabytes and generation time down to a couple of seconds — still not quite as smooth and easy as creating a regular transaction, but entirely doable, even for mobile users.

As such, the share of shielded transactions may increase significantly over the coming years. (Even then, however, shielded transactions won’t be the default or be required like Monero’s RingCT. Similar to privacy technologies on Bitcoin, even just using shielded transaction could be considered suspect in itself.)

Another weakness is that unshielded transactions can, in some cases, leak information about shielded transactions. Specifically, if z-addresses are used as a sort of mixer, the amounts can be linked across transparent addresses. If exactly 1.65273911 ZEC move from a t-address to a z-address, and in a slightly later transaction 1.65273911 ZEC minus fees move out of a z-address to a t-address, it’s not difficult to figure out that these are probably the same coins, only “separated” by one step of encryption.

This threat is not very difficult to counter: Users just need to take care not to transact into and out of the shielded pool in equal amounts. If Zcash is used to store value and make payments instead of just for mixing purposes, this should happen naturally.

Trust

An arguably bigger issue with Zcash is all the trust that's required to make it work. Zcash users must, to some extent, trust that the math works as advertised and trust that the people that launched the project did not cheat.

Cryptographers generally prefer to use cryptography that has been around for a while, allowing it to be thoroughly peer reviewed and “battle tested” in the field. Zcash, however, relies on advanced math with several new assumptions.

Zk-SNARKS in particular are so novel that few outside of a relatively small academic circle really understand how they work. (Zooko self-admittedly does not; nor does the author of this article.) While this does not mean that anything is wrong with Zcash’s cryptography, the newness of it all also doesn’t instill as much confidence as some would like.

This is especially true because, in technical terms, Zcash is not “unconditionally sound.” In a worst case scenario, a weakness in the Zcash protocol could allow attackers to create money out of thin air without anyone being able to notice. (Zcoin, an implementation of the Zerocoin protocol that also lacks unconditional soundness, has already been hacked once; Monero came very close.)

Additionally, Zcash’s zk-SNARKs require a “trusted setup.” Before launch and every time the project deploys a hard fork, a secret number must be generated, a derivative of which is used in the Zcash protocol. Referred to as the Zcash Multi-Party Computation Ceremony, this number is typically created in several parts by different people (six for the first ceremony, two groups of over 80 for the second). All of them must destroy this “cryptographic toxic waste” after the ceremony without revealing it. If even one person succeeds in doing this, the ceremony should be a success. (And as part of a migration process, the former ceremony can be made obsolete by the latter over time.) But if the ceremony fails, and someone figures out the secret, that person can once again create money out of thin air without anyone able to notice.

Further, it now seems that this risk may not be limited to this sort of hidden inflation. It was long believed that even if the trusted setup was compromised, Zcash privacy would still be protected. However, attesting to the newness of the cryptography, Peter Todd, a participant in and critic of the first multi-party computational ceremony, pointed out that if the software used in the ceremony itself is compromised, privacy of Zcash’s zk-SNARK system could be broken too.

There is no reason to believe that Zcash’s trusted setup has been compromised in any way, and there is definitely no evidence that it was. But calling to mind one of Bitcoin’s unofficial slogans — “Don’t trust, verify” — this is ultimately not something Zcash users can check for themselves.

Based on blockchain technology, most cryptocurrencies have an open and public ledger of transactions. While this is required for these system to work, it comes with a significant downside: privacy is often quite limited. Analytics companies and other interested parties — let’s call them “spies” — have ways to analyze the public blockchains and peer-to-peer networks of cryptocurrencies like Bitcoin, to cluster addresses and tie them to IP addresses or other identifying information.

Still, unsatisfied with Bitcoin’s privacy potential, several cryptocurrency projects have launched over the years with the specific goal of improving on Bitcoin’s privacy features. And not without success. Several of these “privacycoins” are among the most popular cryptocurrencies on the market today, with four of them taking top-50 spots in coin market capitalization rankings.

That said, Bitcoin does have some privacy features which, as this month’s cover story details, have been improving in recent months and are set to improve further in the near future. This miniseries will compare different privacycoins to the privacy offered by Bitcoin, and to the privacy offered by other privacycoins.

In part four: Zcash

Background

The origins of Zcash (ZEC) can be traced back to Zerocoin, which was first proposed in 2013 by Johns Hopkins University professor Matthew D. Green and his graduate students Ian Miers and Christina Garman. Zerocoin was designed as a privacy-enhancing protocol extension for Bitcoin to let users “burn” coins and bring an equal amount back into circulation later. Although transaction amounts could be a giveaway, there’d be no way to link the “new” coins to the burned coins otherwise.

Later that same year, Green announced a “new version of Zerocoin,” which would come to be called Zerocash. Zerocash was not designed as a Bitcoin protocol extension but as an entirely new protocol. It improved on Zerocoin by also hiding the amounts, while at the same time offering a big efficiency gain by decreasing the size of transactions by 98 percent.

All this was possible thanks to a relatively new piece of crypto-magic known as a Zero-Knowledge Succinct Non-Interactive Argument of Knowledge, or “zk-SNARK.” In short, zk-SNARKs allow users to prove possession and validity of certain information without revealing that information to anyone and without needing to interact with anyone.

One year later, in 2014, cryptography security company Least Authority, headed by former DigiCash employee and well-known cypherpunk Zooko Wilcox-O’Hearn, spun up a sibling company: the Zerocoin Electric Coin Company (or Zcash Company). With Zooko as CEO and Green, Miers, Garman and other academics as co-founders, the Zcash Company raised funds from prominent names in the cryptocurrency and privacy space. Adding more cryptographers and engineers to the team over the following years, the Zcash company ultimately forked the Bitcoin codebase in 2016 to launch an implementation of Zerocash as a new cryptocurrency: Zcash.

While there are plans to transfer governance of Zcash to the newly erected, non-profit “Zcash Foundation” at some point in the future, for now Zcash is still maintained by the for-profit Zcash Company. This company, as well as investors in the project, receive 20 percent from the Zcash block reward during the first four years of its existence, called the “founders reward.”

Zcash currently sits in the 21st spot on altcoin market cap lists and has been hovering around there for some time. While this makes it only the third-highest ranked privacycoin by market cap, Zcash has received some notable endorsements, for example, from NSA-whistleblower Edward Snowden.

Privacy

As a codebase fork of Bitcoin, Zcash works fairly similarly to Bitcoin. In Zcash, however, there are two types of addresses that do something very different. Regular addresses are called “transparent addresses” or “t-addresses” (They start with a “t”). When ZEC moves from a t-address to another t-address, it looks like a Bitcoin transaction and offers similar levels of (non-)privacy.

But there is also another type of address: “shielded addresses” or “z-addresses.” Z-addresses (“inputs” or “outputs”) aren’t actually visible on the blockchain: they are encrypted. Further, funds held by z-addresses are encrypted as well. The cryptographic magic of zk-SNARKS lets anyone verify that transactions with z-addresses are valid according to the Zcash protocol rules.

As such, Zcash allows for interesting types of privacy-preserving transactions. If t-addresses send money to several z-addresses, for example, it’s not revealed where the money is actually going to. At the same time, if z-addresses send money to t-addresses, it’s not revealed where the money is coming from.

But most interestingly, when only z-addresses are involved in a transaction, the whole transaction is effectively encrypted. In what is called a “shielded transaction,” where the ZEC is moving from, where it is moving to and how much is moved are all completely hidden. Except for the payer and the payee, no one learns anything apart from a minimum amount of metadata: the time of payment and the fee. (Note: users do have the option to share their personal information with a “view key.”)

In effect, all this means is that when coins are sent to a z-address, they “disappear” in a pool of encryption, sometimes referred to as the “shielded pool.” Basically any and every subsequent shielded transaction could be spending (some of) the coins, and any shielded transaction after that could spend them again. Or not. The coins may also sit tight on the same address — or they could be moved back to a t-address.

When users move though the encrypted pool, Zcash offers near-perfect privacy.

Weaknesses

Although Zcash does not offer fully perfect privacy, the weaknesses are subtle and, in some cases, temporary.

Zcash’s main weakness is probably that creating a shielded transaction is currently computationally heavy. Requiring several gigabytes of memory (RAM), it can take well over a minute to generate a shielded transaction on a good laptop, while generating a shielded transaction on a phone is practically impossible. This means that few users actually make shielded transactions which, in turn, means the anonymity set for those who do use shielded transactions is relatively small, weakening privacy overall.

That said, an upcoming Zcash protocol upgrade (hard fork) is set to solve the problem of heavy transactions almost entirely. Dubbed “Sapling,” Zcash researchers have found a way to cut memory usage for shielded transactions down to 40 megabytes and generation time down to a couple of seconds — still not quite as smooth and easy as creating a regular transaction, but entirely doable, even for mobile users.

As such, the share of shielded transactions may increase significantly over the coming years. (Even then, however, shielded transactions won’t be the default or be required like Monero’s RingCT. Similar to privacy technologies on Bitcoin, even just using shielded transaction could be considered suspect in itself.)

Another weakness is that unshielded transactions can, in some cases, leak information about shielded transactions. Specifically, if z-addresses are used as a sort of mixer, the amounts can be linked across transparent addresses. If exactly 1.65273911 ZEC move from a t-address to a z-address, and in a slightly later transaction 1.65273911 ZEC minus fees move out of a z-address to a t-address, it’s not difficult to figure out that these are probably the same coins, only “separated” by one step of encryption.

This threat is not very difficult to counter: Users just need to take care not to transact into and out of the shielded pool in equal amounts. If Zcash is used to store value and make payments instead of just for mixing purposes, this should happen naturally.

Trust

An arguably bigger issue with Zcash is all the trust that's required to make it work. Zcash users must, to some extent, trust that the math works as advertised and trust that the people that launched the project did not cheat.

Cryptographers generally prefer to use cryptography that has been around for a while, allowing it to be thoroughly peer reviewed and “battle tested” in the field. Zcash, however, relies on advanced math with several new assumptions.

Zk-SNARKS in particular are so novel that few outside of a relatively small academic circle really understand how they work. (Zooko self-admittedly does not; nor does the author of this article.) While this does not mean that anything is wrong with Zcash’s cryptography, the newness of it all also doesn’t instill as much confidence as some would like.

This is especially true because, in technical terms, Zcash is not “unconditionally sound.” In a worst case scenario, a weakness in the Zcash protocol could allow attackers to create money out of thin air without anyone being able to notice. (Zcoin, an implementation of the Zerocoin protocol that also lacks unconditional soundness, has already been hacked once; Monero came very close.)

Additionally, Zcash’s zk-SNARKs require a “trusted setup.” Before launch and every time the project deploys a hard fork, a secret number must be generated, a derivative of which is used in the Zcash protocol. Referred to as the Zcash Multi-Party Computation Ceremony, this number is typically created in several parts by different people (six for the first ceremony, two groups of over 80 for the second). All of them must destroy this “cryptographic toxic waste” after the ceremony without revealing it. If even one person succeeds in doing this, the ceremony should be a success. (And as part of a migration process, the former ceremony can be made obsolete by the latter over time.) But if the ceremony fails, and someone figures out the secret, that person can once again create money out of thin air without anyone able to notice.

Further, it now seems that this risk may not be limited to this sort of hidden inflation. It was long believed that even if the trusted setup was compromised, Zcash privacy would still be protected. However, attesting to the newness of the cryptography, Peter Todd, a participant in and critic of the first multi-party computational ceremony, pointed out that if the software used in the ceremony itself is compromised, privacy of Zcash’s zk-SNARK system could be broken too.

There is no reason to believe that Zcash’s trusted setup has been compromised in any way, and there is definitely no evidence that it was. But calling to mind one of Bitcoin’s unofficial slogans — “Don’t trust, verify” — this is ultimately not something Zcash users can check for themselves.

Stablecoins are becoming big business these days. In a $15 million deal, Andreessen Horowitz’s a16z crypto fund is buying 6 percent of the total MakerDAO maker (MKR) token supply. The investment will give a16z a financial and governance stake in the dai stablecoin.

A16z made the announcement today, September 24, 2018. MakerDAO also received $12 million in a round led by Andreessen Horowitz and Polychain Capital in December 2017.

A stablecoin is a token pegged to another asset, like the dollar. Stablecoins can provide a hedge in the volatile world of crypto trading, especially in exchanges that have no direct link to banking. MakerDAO has two main tokens: dai and MKR. A separate token, MKR works alongside dai to help dai maintain its 1:1 peg with the U.S. dollar.

A16z sees a world of opportunity for stablecoins. “The same volatility that is holding back crypto for payments is also limiting its use for a host of other financial services and products,” a16z partners Katie Haun and Jesse Walden said in a co-written statement.

“Today, it’s not really practical to make a long-term loan in bitcoin because you’d have to consider two independent risks: first that the loan would be repaid, and second, whether the bitcoin would be worth more or less at the time the loan came due.”

The purchase of MKR marks the first investment from a16z’s dedicated $300 million crypto fund. The move was driven by Haun, a former federal prosecutor who led the investigations into the Mt. Gox heist and Silk Road.

According to the terms of the partnership, MakerDAO, a project that runs on Ethereum smart contracts, will receive the operating capital over three years. Dai adoption and regulatory support are  main priorities, says a16z. To reach those goals, Andreessen Horowitz and a16z will be offering expertise in areas ranging from sales and business development to marketing, talent and more.

A16z is not the only company to set its eyes on MakerDAO. ConsenSys, a production studio for Ethereum-based startups, has partnered with MakerDAO on two social-good projects: Bitfröst and optiMize. Blockchain money transfer company Wyre has also partnered with MakerDAO.

Ethereum creator Vitalik Buterin considers MakerDAO one of the “most interesting” projects running on Ethereum. “The way that whole construction works and how it is designed to be decentralized is fascinating,” he said in a recent interview with Bitcoin Magazine.

Still, MakerDAO faces some stiff competition. Currently, there are 29 active stablecoins in the market, all vying for a piece of the action. Tether is by far the most popular, with a $2.8 billion market cap. The difference between tether and dai, however, is how the two assets are collateralized.

Tether is supposedly backed by fiat (the company tells us this but has had no official audit to support those claims). MakerDAO, on the other hand, is collateralized with ether, the native token of the Ethereum blockchain. But because ether is a volatile asset, if you want to buy $100 worth of dai, you have to deposit $150 worth of ether.

How dai works is not inherently easy to understand either. MakerDAO uses an elaborate scheme of tokens, smart contracts and “autonomous feedback mechanisms” to maintain its peg.

To get dai, for instance, you send ether to an Ethereum smart contract. You then lock your ether into a collateralized debt position (CDP) and draw out a loan of dai against that. To redeem ether, you send dai back to the CDP, along with accrued interest that can only be paid for with MKR.

After interest is paid, MKR is burned, removing it from the total supply. The logic here is that if the adoption and demand for dai and CDPs increase, so too will the demand for MKR. In terms of its governance role, MKR will also enable a16z to vote on certain “risk parameters” of CDPs.

MKR is currently trading at $459 with a total supply of 1 million. If the demand for MKR skyrockets, that will be a boon for a16z. But first, a16z needs to convince crypto traders that dai is a better bet than tether, or fiat, for that matter.