Andressen Horowitz Invests $15 Million into Stablecoin Company MakerDAO

On Sept. 24, Andreessen Horowitz announced a $15 million investment in cryptocurrency startup MakerDAO, which issues the Ethereum-based stablecoin Dai.

DAI is part of MakerDAO's decentralized credit system for enterprises and individuals, as explained in its whitepaper.

The DAI protocol also introduces savvy measures like Target Rate Feedback Mechanism and Collateralized Debt Positions to ensure the token maintains a value of $1 regardless of the fluctuating prices of ETH. In case of a black swan event that severely drives down the price of ETH, the system is designed to unlock the "Global Settlements" function that credits all users with the initial amount of assets they invested.

MakerDAO's ambitious solution led A16Z to purchase over 6 percent of all MKR tokens-which governs the DAI platform and is not a stablecoin-priced over $15 million at the time of purchase.

As stated on its announcement, A16Z will now be allowed to manage its MKR tokens to exercise voting rights and influence the Dai Credit System, ironically before the latter becomes the world's "First" decentralized autonomous organization.

Apart from funds, MakerDAO shall be receiving operational support from A16Z, including facilitating future financing stages, community support for three years, and technical know-how from eighty A16Z consultants.

"With investment and operational support from a16z crypto, MakerDAO will be able to accelerate evolution, innovation, and adoption of the Dai Credit System."

There's no holding back from cryptocurrency investments for A16Z. The venture fund has led investment rounds in blockchain-based security platforms, stablecoin projects, and even partnered with other venture capital firms to invest in crypto-businesses.

The DAI investment comes on the heels of a $102 million funding round of DFINITY in August 2018, as reported by CryptoSlate.

At the time of writing, DAI's total market cap is valued at $55 million with a circulating supply of 54.9 million.