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DAI Circulation Approaches 5 Billion As MakerDAO Unleashes Key Updates

In a recent announcement on the social media platform X (formerly Twitter), MakerDAO, the Ethereum-based protocol responsible for issuing the DAI algorithmic stablecoin, provided insights into the performance of the Maker Protocol following recent changes.

Over the past few weeks, MakerDAO has implemented significant updates to the protocol and the DAI stablecoin. 

Introducing the Accelerated Proposal and the direct deposit module (D3M) to Spark’s Metamorpho Vault has notably impacted the ecosystem.

Increased DAI Supply And Demand

Looking at key metrics that demonstrate the effects of these changes to the protocol, the DAI supply in circulation currently stands at nearly 5 billion, reflecting a growth of approximately 300 million over the past month. This growth indicates continued demand for the stablecoin. 

On the other hand, the Dai Savings Rate has significantly increased since implementing the Accelerated Proposal. 

Approximately 1.54 billion DAI are currently deposited in the Dai Savings Rate, of which approximately 976 million DAI are sDAI, representing an increase of roughly 400 million DAI in deposits.

The Maker Protocol’s total value locked (TVL) amounts to approximately $8.4 billion across various vault types. This TVL growth can be attributed to strategic deployments in D3M modules, significant contributions from Ethereum-based collaterals, and the integration of real-world assets. These developments have enhanced the protocol’s diversification and resilience.

MakerDAO Ethereum Vaults Thrive

A notable addition to the MakerDAO ecosystem is the Morpho DM3, which enables the Morpho Vault to mint DAI. Currently, the lending pool has deployed 200 million DAI.

According to the protocol’s post, this allocation is projected to generate approximately 50 million in annual income for the Maker Protocol, making it the second-largest core vault in terms of annualized fees. It will play a significant role in generating revenue and contributing to the Maker Protocol’s sustainability.

Among the Ethereum vault types within the MakerDAO ecosystem, the ETH-C vault stands out with the largest value locked in crypto collateral at approximately $1.88 billion. 

This vault generates approximately $43 million in annual fees, underscoring its importance within the Maker ecosystem and contribution to the protocol’s revenue streams.

Another important component is the Spark D3M, which is supplied with around 970 million DAI. This module is projected to generate an annual income of approximately 28 million. 

These recent changes have positively impacted the Maker Protocol. The increase in DAI supply, growth in the Dai Savings Rate, expansion of collaterals, and introduction of different vault types have contributed to the protocol’s growth and development. 

MakerDAO

Despite the growth in the MakerDAO ecosystem, the native token MKR has experienced a continuous 5.9% price decline over the past fourteen days. 

In the last seven days alone, the token has recorded a significant 17% price drop, resulting in its current trading price of $3,355.

However, despite the price decline, Token Terminal data reveals positive trends. The protocol’s market capitalization currently stands at $3.3 billion, reflecting a notable 28% increase over the past 30 days. 

Additionally, trading volume for the MKR token has experienced a substantial surge, reaching $5.9 billion, representing a 119% increase over the same time frame.

Featured image from Shutterstock, chart from TradingView.com 

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MakerDAO Initiates Massive $600 Million DAI Investment In USDe And sUSDe

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. 

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. 

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.

MakerDAO

Featured image from Shutterstock, chart from TradingView.com 

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MakerDAO Stakeholder-Focused Updates Drive MKR Price Up By 10%

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. 

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. 

MakerDAO

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%.

MakerDAO

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.

MakerDAO

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

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MakerDAO Secures $6 Billion For Treasury Bill Investments As MKR Dominates 2023

According to a Bloomberg report, MakerDAO, one of the prominent decentralized lenders in cryptocurrency, has reaffirmed its decision to invest billions of dollars in US government bonds.

This strategic move has propelled its governance coin, MKR, to reach its highest level since April 2022, outperforming other major cryptocurrencies, including Bitcoin (BTC).

MKR has experienced a remarkable surge of 77% this quarter, emerging as the best-performing cryptocurrency of the year. Despite a modest decline of 3.9% to $1,452 on Friday, the coin has nearly tripled in value. 

MakerDAO Doubles Down On Treasury Bonds

As per DefiLlama data, MakerDAO currently oversees $4.6 billion in assets. The rally of MKR can be attributed to MakerDAO’s 2022 decision to convert the backing funds of its stablecoin DAI into assets such as short-term US Treasuries and corporate bonds. 

This strategic shift aimed to seek more stable yields amid the downturn in the cryptocurrency markets. Subsequently, MakerDAO passed a proposal enabling the investment of up to $6 billion in short-term Treasuries, doubling the existing limit.

Simon Peters, an analyst at investment platform eToro, suggests that the recent gains in MKR can be attributed to rising treasury yields following the Federal Reserve’s indication of keeping rates higher for longer.

However, signs of a potential slowdown in the MKR rally have emerged. CryptoQuant data reveals a gradual increase in MKR tokens held on centralized exchanges (CEX), indicating that some traders are preparing to secure profits from the recent surge. 

Notably, the drop experienced on September 29 ahead of the monthly close marked the largest decline since mid-September.

According to Bloomberg, the trader enthusiasm for MKR has extended to DAI, MakerDAO’s stablecoin. DAI’s circulation has grown from a low of $3.9 billion on August 20 to $5.5 billion. 

Furthermore, MakerDAO introduced a limited-time offer of an 8% annual yield to DAI holders, which, combined with the approval of the investment proposal, could potentially trigger a fresh wave of buying in short-term Treasuries.

Allan Pedersen, the CEO of Monetalis, a firm assisting MakerDAO in its investments, expressed that if the supply of DAI continues to increase, it could lead to a significant expansion of MakerDAO’s T-bill investments in a short time frame.

The developments surrounding MakerDAO’s investment strategy in US government bonds, which have propelled MKR to new heights, signify a calculated move to achieve stability and sustainable yields by the decentralized protocol.

MKR Hits 18-Month High

MKR has declined over 4.5% in the past 24 hours, causing the token to retrace to its current trading price of $1,452. However, over the last month, MKR has exhibited consistent gains across various time frames, with notable increases of 12%, 19%, and nearly 40% over the seven, fourteen, and thirty-day periods, respectively.

Furthermore, MKR has reached an impressive 18-month high, surging by 101% year to date and briefly peaking at $1,590 earlier on Friday.

MakerDAO

In the short term, safeguarding against an extended decline, MKR has two crucial support levels that bulls must defend. The first immediate support rests at $1,430, while the second support level, spanning two months, is positioned at $1,341.

Meanwhile, MakerDAO and its ecosystem appear poised for further gains with their investment strategy. With a few months remaining in 2023, there is a potential for MKR to conclude the year as the top-performing asset if the ongoing rally continues.

Featured image from Shutterstock, chart from TradingView.com