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What’s a Black Swan?

And how a Black Swan Event played out on Maker’s Black Thursday

  • Bring severe consequences with them, often with a dramatic impact on lives and livelihoods.
  • They are often tried to be explained as foreseeable in retrospect.

Maker Black Thursday


March 12th, 2020

Trading View
  • DAI liquidity dried up: usually, DAI is a very liquid stablecoin that you can easily buy and sell on exchanges and DeFi protocols. Not so much during this 12th March 2020. As users feared being liquidated, fewer users deposited ETH into the protocol to mint new DAI. The supply of DAI shrank while more traders redeemed their DAI. It became so scarce that the price of 1 DAI went up to $1.12 (it usually trades around $1), making it hard for liquidators to get enough DAI to do their job.

Maker’s reaction

In reaction to this Black Swan event, maker has addressed the DAI liquidity issue by lowering the saving rate to 0% (what holders of DAI would receive) in order to reduce demand and lower the price of DAI to its soft-peg again.



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Naomi Oba

Writer in Crypto — passionate about financial education, blockchain, books, and food.