Amidst the crypto market resurgence, the smart contract platform Maker and its native token MKR have experienced a challenging period, with MKR demonstrating a consistent downtrend after reaching a yearly high of $4,070 in April, plummeting to as low as $2,440 just one week later. Dive into the protocol’s key metrics and observe notable levels to gain insights into potential price movements and actions for the MKR token in the near term. Maker Protocol’s Updated Metrics Reveal Positive Growth The Maker protocol, known for its decentralized stablecoin DAI, recently disclosed updated metrics highlighting its health and growth over the past month in a post on social media site X (formerly Twitter). DAI, governed by MakerDAO’s decentralized blockchain, enables the borrowing and lending of cryptocurrencies. The current DAI supply, exceeding 5 billion DAI, is a critical metric reflecting the total amount of DAI created and circulating. Related Reading: Shiba Inu Whale Enter Buying Frenzy, 715 Billion SHIB Snapped Up In Days Total Value Locked represents the dollar value of assets locked within the Maker Protocol. Despite being live on one chain since its inception, Maker has approximately $8.76 billion locked, making it the fourth-largest decentralized finance (DeFi protocol). The Maker Protocol allows the minting of DAI by depositing accepted assets into Maker Vaults. The ETH-C Vault type holds the largest share, with approximately $2.07 billion worth of ETH locked. The system surplus needs to reach 50 million DAI to achieve a complete MKR burn. On the other hand, the Dai Savings Rate (DSR) represents the rate at which the Maker Protocol rewards users for locking their DAI within DSR contracts. Currently, the DSR cost amounts to approximately 153 million DAI. Currently, the protocol notes that most DAI remains within DeFi, with externally owned Accounts (EOA) and the DSR serving as the top use cases, holding over 2.3 billion and 1.96 billion DAI, respectively. In terms of revenue generation, SparkLend D3M and Spark’s MetaMorpho D3M lead the way, generating an estimated $155 million in annual revenue based on their deposit APYs. This highlights the significance of various collateral types and revenue streams within the Maker ecosystem. Potential Catalyst For MKR’s Price? Despite the growth and investor interest in the Maker ecosystem, the upcoming Endgame Plan, a proposal to revamp its governance and tokenomics, is expected to act as a catalyst for the MKR token, potentially boosting its price. The proposal aims to establish a self-sustainable equilibrium called the Endgame State, envisioning a resilient ecosystem where Maker Core’s scope and complexity will no longer change. Related Reading: Bitcoin Approaching All-Time Highs: Why Is Retail Interest Rapidly Declining? Currently, MKR is trading at $2,612, experiencing a slight decline of over 2% in the past 24 hours and around 8% in the last 30 days. CoinGecko data also indicates a recent 4.7% decrease in trading volume, totaling only $72 million compared to the token’s $2.4 billion market cap. If the Endgame plan indeed generates renewed interest in the token and acts as a catalyst for MKR, the next significant obstacles to monitor in the short term are situated around the $2,660 level, which has impeded the token’s ability to surpass higher levels in the past few days. Additionally, on its potential path to reclaim the $3,000 milestone, resistance levels at $2,710 and $2,760 would need to be overcome before potentially retesting the resistance at $2,845. Moving forward, on the MKR/USD daily chart, the levels at $2,905 and $2,950 act as the final hurdles before reaching the $3,000 milestone. It remains to be seen whether further developments and growth in key metrics, coupled with the anticipated Endgame proposal, can stimulate a significant bullish momentum for MKR, enabling it to overcome resistance levels and regain its bullish trend. Featured image from DALL-E, chart from TradingView.com
Decentralized Finance (DeFi) protocol MakerDAO is considering allocating 600 million DAI stablecoins to the USDe and staked USDe (sUSDe) protocols through the DeFi lending platform Morpho Labs. The proposed allocation aims to improve risk management and maximize user incentives in the DeFi landscape. MakerDAO Sets Maximum 600 Million DAI Allocation The Spark DAI Vault, launched in 2023 as a lending platform, experienced strong demand soon after its launch, according to MakerDAO’s announcement on the protocol’s governance forum. Related Reading: Tether Buys 8,888 Bitcoin For $618 Million, But Why Is Price Down? Given the desire to keep liquidity risk at an acceptable level, MakerDAO proposes a greater allocation of DAI to the USDe pools, which can be immediately redeemed via Ethena (ENA), a synthetic dollar protocol developed on the Ethereum blockchain. This reallocation also allows Ethena to retain a larger revenue share for their insurance fund, potentially improving the overall risk profile of MakerDAO’s Ethena allocation. Furthermore, MakerDAO recommends focusing future allocations on the 86% and 91.5% Loan-To-Liquidity-Value (LLTV) pools, which have shown “higher efficiency” regarding borrow rates and user demand. While lower LLTV pools, such as the 77% and 94.5% pools, will continue to receive allocations, they will be proportionally lower than the two primary pools. To mitigate potential insolvency risks and ensure a favorable risk-reward ratio, MakerDAO limits the total allocation to 600 million DAI. However, the Dividend Debt Mechanism (DDM) line parameter is set at 1 billion DAI to provide flexibility for future increases if constraints change. In addition, MakerDAO recommends marginally increasing the funds deployed in the 77% and 94.5% pools to 10 million DAI each to ensure sufficient pool size for “efficient management of positions” and the calibration of interest rate models. The recently unveiled Ethena points program for Season 2 introduces a $500 million cap on total eligible collateral for incentives on Morpho. If demand for DAI borrowing through the vault declines after this threshold is reached, the protocol states that Multisig can reduce allocations below $600 million to maintain a balanced supply/demand dynamic and align with expected collateral returns. MKR Surges To Near Three-Year High MakerDAO’s native token, MKR, hit a nearly three-year high of $4,074 on Sunday, which is 40% below its current all-time high (ATH) of $6,292 in May 2023. The token has pulled back nearly 2% and is currently trading at $3,717. It is consolidating above its next support level of $3,640. Despite the retracement, MKR still boasts significant gains over longer time frames. It has posted a 25% gain over the past fourteen days and an impressive 80% gain over the past thirty days. Related Reading: Solana Price Could Explode By 80% If This Happens: Crypto Analyst Demand for MKR tokens is evident as trading volume has increased to $274,659,607 over the past 24 hours, a substantial 40% increase from just one day ago, according to CoinGecko data. In addition, MKR’s market capitalization has seen a remarkable increase of nearly 100% over the past month. Starting in March with a market cap of $1.8 billion, as of the most recent update on April 2nd, the market cap stands at $3.46 billion. This significant increase underscores the high level of interest in the MakerDAO protocol and its native token. Featured image from Shutterstock, chart from TradingView.com
Blockchain protocol MakerDAO (MKR) continues to see significant gains, maintaining a strong upward trend throughout the year. MKR has seen significant growth of over 358%, accompanied by positive metrics reflecting increased adoption and usage of the protocol. In addition, upcoming voting initiatives aim to further increase the platform’s benefits for its stakeholders. MakerDAO Announces Plans For Rate System Changes In a recent announcement, MakerDAO stated that it closely monitors developments in the cryptocurrency market and has gained a better understanding of the impact of recent proposals. As a result, the protocol is recommending the next set of changes to its rate system. MakerDAO emphasized that further adjustments will likely be introduced shortly, contingent upon market dynamics, such as prices, leverage demand, and the external rate environment encompassing centralized finance (CeFi) funding rates and decentralized (DeFi) effective borrowing rates. Related Reading: US Spot Bitcoin ETFs Experience Record Outflows, Losing $740 Million In Three Days The protocol further noted that the Maker rate system will be adjusted accordingly if the external rate environment continues to exhibit signs of decline. Efforts are underway to update the rate system language within the Stability Scope, including developing a new iteration of the Exposure model. These updates aim to ensure that the system can adjust rates more gradually and effectively in the future. Based on recommendations from BA Labs, a blockchain infrastructure provider, the Stability Facilitator proposes various parameter changes to the Maker Rate system, which will be subject to an upcoming Executive vote. As shown in the table above, the proposed changes include reducing the Stability Fee by 2 percentage points for various collateral types such as ETH-A, ETH-B, ETH-C, WSTETH-A, WSTETH-B, WBTC-A, WBTC-B, WBTC-C. In addition, the Dai Savings Rate (DSR) and the Effective DAI Borrowing Rate for Spark will also be reduced by 2 percentage points. However, one active protocol user offered an alternative viewpoint, suggesting using the demand shock opportunity to expand the net interest margin. While agreeing with the proposed 2% interest rate reduction for borrowers, the user advocates for a larger 4% reduction in the DSR, which he believes will further benefit MakerDAO’s net interest margin. Ultimately, the outcome of the voting process will determine whether these proposed changes are implemented and benefit the stakeholders of MakerDAO. Further decisions regarding rates and fees will be made based on the results. Market Cap Skyrockets According to data from Token Terminal, MakerDAO has demonstrated significant growth and positive performance across various key metrics over the past 30 days. In terms of market capitalization, MakerDAO’s fully diluted market cap has reached approximately $3.07 billion, reflecting a notable increase of 40.9% over the past 30 days. The circulating market cap is around $2.82 billion, showing a similar growth rate of 41.1%. On another note, the total value locked (TVL) in MakerDAO has increased by 10.1% over the past 30 days to approximately $7.05 billion. The token trading volume for MakerDAO has surged 126.6% over the past month, reaching approximately $4.35 billion. This increase in trading volume suggests heightened market activity and interest in the protocol. In terms of user activity, MakerDAO has seen an increase in daily active users, with an increase of 32.2% to 193 users. On the other hand, weekly active users decreased by 22.6% to 783 users. However, monthly active users have shown a positive growth rate of 10.0%, reaching 2.88k users. Short-Term Outlook For MKR Regarding price action, MKR is currently trading at $3,158, reflecting a 4.8% growth in the past 24 hours, 10% in the past seven days, and an impressive 49% increase in the past fourteen and thirty-day time frames. The token has encountered a support wall for the short term at $3,048. This support level is significant for the token’s growth prospects. Another key support level is at $2,884, which further contributes to the token’s short-term stability and potential growth. Related Reading: Crypto Expert Reveals The Possibility Of Bitcoin Reaching $500,000 On the other hand, the nearest resistance level is observed at its 28-month high of $3,321. This level represents the highest point reached by the token since November 2021. Featured image from Shutterstock, chart from TradingView.com