Paradigm Moves $3.5M in MakerDAO's MKR Tokens Following Peer a16z's Maneuver

Fellow venture capital firm a16z over the past week transferred $7 million of its MKR holdings to crypto exchange Coinbase.

AccessTimeIconJul 26, 2023 at 8:35 p.m. UTC
Updated Jul 26, 2023 at 10:28 p.m. UTC
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Paradigm Capital on Wednesday afternoon apparently prepped to sell its $3.5 million stash of MakerDAO governance token MKR, blockchain data from Arkham Intelligence shows.

According to Arkham, 3,000 MKR were transferred from Paradigm's crypto wallet to a what was labeled as an OTC (over-the-counter) trading wallet. Paradigm in March did something similar, sending some $20 million of MKR to the same wallet and then transferring the tokens to crypto exchange Coinbase.

Paradigm's move follows Andressen Horowitz's maneuver earlier this week, where it ultimately deposited $7 million of MKR tokens to Coinbase, potentially to sell.

The VC firms' transactions happened as MKR price soared to the highest level since last August, spurred by a new buyback scheme that removes tokens from the market. MKR is currently changing hands at $1,190, up 73% in a month, and vastly outperforming the CoinDesk DeFi Index's 12.7% monthly return.

MakerDAO is one of the largest decentralized finance (DeFi) lending platforms and the issuer of the $4.6 billion DAI stablecoin. The protocol is led by a decentralized autonomous organization (DAO), where those who own MKR tokens can vote on governance proposals.

The development comes as MakerDAO is going through a major revamp under founder Rune Christensen's Endgame vision, which includes breaking up the platform's structure into autonomous units that can issue their own tokens and overhaul MKR and DAI. The plan, while approved by governance vote, also sparked some backlash among community members and investors in the protocol. Delegates and developers resigned from their roles and a16z publicly opposed the changes.

Paradigm and a16z invested early in MakerDAO. Paradigm purchased 5.5% of all MKR tokens in a $27.5 million investment round with Dragonfly Capital late 2019, while a16z acquired 6% of the MKR supply for $15 million in 2018.

The OTC wallet where the tokens from Paradigm landed has a history of receiving MKR and transferring to Coinbase, Arkham data shows. Following Paradigm's $20 million transfer in March, a16z also sent a total of $11.7 million in MKR to the account early July, which then unloaded the tokens to Coinbase.

a16z's MKR transfers to the OTC wallet (Arkham Intelligence)
a16z's MKR transfers to the OTC wallet (Arkham Intelligence)

UPDATE (Jul. 27, 22:10 UTC): Adds context throughout the story about MakerDAO, Paradigm's and a16's involvement in the protocol and MKR price action. Adds details about destination wallet's history.

Edited by Stephen Alpher and James Rubin.


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Krisztian  Sandor

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.

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