The De-Central Bank in Decentralized Finance: A Case Study of MakerDAO

Presenter Information

Martin Brennecke, FIM Research Center, Project Group Business & Information Systems Engineering of the Fraunhofer FIT, University of BayreuthFollow
Tobias Guggenberger, University of Bayreuth, FIM Research Center, Project Group Business & Information Systems Engineering of the Fraunhofer FITFollow
Benjamin Schellinger, FIM Research Center, University of Bayreuth Project Group Business & Information Systems Engineering of the Fraunhofer FITFollow
Nils Urbach, Frankfurt University of Applied SciencesFollow

Location

Online

Event Website

https://hicss.hawaii.edu/

Start Date

3-1-2022 12:00 AM

End Date

7-1-2022 12:00 AM

Description

Countless decentralized finance (DeFi) applications of the past years have suffered from the high volatility and speculative behavior surrounding their underlying crypto assets. While the academic debate has been flourishing in these areas, Decentralized Autonomous Organizations (DAOs) have not received as much attention. This is the case even though they could offer an opportunity to solve some of the underlying problems of existing cryptocurrencies and ecosystems, for example, by providing lower volatility and, thus, exchange rate stability. This paper presents an economic analysis of the MakerDAO, a DAO in DeFi. In doing so, we use a single case study methodology based on existing resources and expert interviews. It also uses monetary theory instruments to provide researchers and developers with insights into how DAOs are governed. Further, it serves to illustrate how IS research may support the development of future IT artifacts aimed at offering the infrastructure for DeFi applications.