MakerDAO prices fall as DAI keeps in check and investors look for stablecoin security

MakerDAO prices fall as DAI keeps in check and investors look for stablecoin security – Mail Bonus

It has been a rough few weeks for the cryptocurrency market. The price of Bitcoin (BTC) is nowhere near the valuation of most analysts, many stablecoins lost the connection and the collapse of one of the top distributed financial systems (DeFi) caused an event that led to 900 billion dollars disappearing from the total market value of the cryptocurrency.

In the midst of the widespread collapse, MakerDAO (MKR) managed to turn a crisis into an opportunity, and the collapse of TerraUSD (UST) has brought renewed attention to DAI, the long-standing distributed stablecoin.

Data from Cointelegraph Markets Pro and TradingView show that as Terra (LUNA) fell from May 9 to May 12, MKR rose 66.2% from a low of $ 952 on May 12 to $ 1,587.

MKR / USDT 1-day chart. Source: TradingView

Three possible reasons for the reversal of MKR’s momentum are that DAI maintains its connection to the recent market turmoil, the use of the MakerDAO dome to finance supply chain shipments and the addition of Ether (ETH) as collateral for DAI’s currency.

DAI remains stable during the period of great turmoil in the market

One of the most important factors that gives investors more confidence in the MakerDAO ecosystem is the fact that DAI kept its dollar connection in a shaky market that saw a handful of the most popular stablecoins lose their mounts.

At the height of the swing, the price of DAI fluctuated from a low of $ 0.9961 on May 11th to a high of $ 1.0046 on May 12th and is now at $ 0.9994.

DAI remained stable despite a more than 2.2 billion decrease in supply.

The actual adoption continues

Another factor that strengthens MKR is its growing adoption in the real world. The MakerDAO dome was recently used to fund the shipment of Australian beef and more “use cases” are being planned.

On May 9, the MakerDAO dome was used in conjunction with Centrifuge’s diversified asset financing rules to allow the business finance provider ConsolFreight to beat the DAI used to finance the transaction.

An inflexible identifier (NFT) containing the shipment and invoice data was also printed in the process to track and help keep track of transactions. The shipment is also being tracked using Provenance, Mastercard’s blockchain traceability solution.

These trades helped to demonstrate a single use of smart contracts and stablecoins in the supply chain industry.

Put Ether as collateral

Another factor that builds momentum for MakerDAO is the addition of support for Ether, which is a mortgage in the protocol.

sETH2 allows those who participate in mortgages in the Ethereum BNB chain to gain access to funds that would otherwise be locked in for an unknown period of time and use them to earn returns in DeFi.

The collapse of ICT, its chain reaction and the addition of Ether as insurance places MakerDAO as the top DeFi protocol based on total value blocked (TVL), according to data from Defi Llama.

Top-5 protocols by total value locked. Source: Defi Llama

MakerDAO, which claims the top spot, comes after Curve, another popular stablecoin liquidity policy, saw TVL fall from $ 19.32 billion on May 5 to $ 8.71 billion on May 16.

The views and opinions expressed herein are those of the authors only and do not necessarily reflect the views of Every investment and trading business involves risk, you should conduct your own research when making a decision.