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MakerDAO Passes Proposal To Deploy $100 Million USDC In Yearn Finance Vault

In the hopes of generating yield while offering users what its best known for, MakerDAO, the issuer of the Ethereum-based stablecoin, DAI, has approved a proposal to deploy $100 million of Circle’s USD Coin (USDC) in a Yearn Finance yield-generating account called a “vault.”

The proposal, submitted on January 9, aims to look for a way MakerDAO could split its treasury allocations and earn yield.

MakerDAO To Generate Yields From Yearn Finance Vault

Following the approval of the MIP92 (Maker Improvement Proposal 92), MakerDAO plans to begin depositing $100 million USDC to the Yearn finance vault to earn a 2% yield annually, approximately $2 million every year on its YearnFi investment. 

Founded by prominent DeFi developer Andre Cronje, Yearn finance is a yield aggregator built on the Ethereum blockchain, allowing users to deposit crypto assets in the service in exchange for yield or interest over some time. 

With a total of 95,666.284 of Maker’s native token, MKR cast in the vote, approximately 68,462 MKR, which accounts for 71.56%, voted in favor of deploying USDC in Yearn Finance, while 27,204 MKR, which accounts for 28.44% voted out the whole idea and 0.0% voted “abstain.”

Though the MIP92 has been passed, the proposal still has to go through an executive vote for the concept to be implemented.

MakerDAO Attraction To USDC

Before the MIP92 submission, MakerDAO had already demonstrated interest in Circle’s dollar-backed token, USDC. Late last year, the DAI stablecoin operator invested a hefty amount alongside collaboration with Coinbase to become the largest stakeholder in USDC.

As reported by NewsBTC, MakerDAO and Coinbase Prime have a total of USD 1.6 billion in custody, allowing both partners to earn 1.5% returns from the deposited assets. Notably, stablecoins have seen rapid growth in recognition in recent years. As a result, investors now rely on these assets to protect the value of their investments.

Unlike traditional cryptocurrencies, which fluctuate now and then, stablecoins are tied to the value of an underlying asset, like the U.S. dollar. Due to the nature of stablecoins, many investors have found them enticing, especially as a vital part of future finance.

With the USDC still lagging behind USDT in adoption, the goal has always been to surpass the latter and become number one in the market cap.

MKRUSDT price chart on TradingView

Veering back to MakerDAO, the protocol’s native token, MKR, has also been thriving to cover the gaps between its current price and its all-time high. Over the past 30 days, MKR has surged more than 20% and currently trades above $650 with a 24-hour trading volume of $22.3 million.

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Cardano’s Aggressive Development Activity Will Withstand Bear Assault At $0.3?

The crypto market’s rally is losing strength, forcing significant cryptocurrencies, such as Bitcoin, Ethereum, and Cardano, back to their support regions. The latter has been deploying products and development that hint at a longer bullish trend.

As of this writing, Cardano (ADA) trades at $0.35 with a 5% loss in the last 24 hours. Over the past week, ADA’s price still recorded some profits as the bulls made their stand against a spike in selling pressure.

Cardano ADA ADAUSDT

Cardano In The Olympus Of Development Activity

Data from research firm Santiment indicates that the Cardano ecosystem is vibrating with development activity. Currently, this blockchain ranks number 3 in the metric, according to the number of commits on the software development platform GitHub.

As seen in the chart below, Cardano’s development activity over the past 30 days records over 330 GitHub commits for the different projects on this blockchain. Only Polkadot and its experimental environment Kusama have seen more development activity, with 441 commits.

Cardano ADA ADAUSDT Chart 2

As the chart above shows, the price of Cardano (ADA) has been moving in tandem with its developments and the general market sentiment. As more developers onboard the blockchain, the ecosystem is more appealing to investors. ADA records a 38% rally over the past 30 days.

In the coming weeks, this blockchain will deploy a new upgrade for its smart contract programming language, Plutus. This update will enable support for the Elliptic Curve Digital Signature Algorithm (ECDSA) and Schnorr.

These new components will allow developers to provide more security and build cross-chain capabilities. Plutus was designed to operate as an easy-to-use and accessible programming language. Thus, people might feel even more incentive to build on this blockchain.

It remains to be seen if ADA’s price will extend its recent trend and follow its spike in development activity. According to Input Output Global, Cardano’s lead developer company:

This upgrade will bring greater interoperability and secure cross-chain #DApp development to #Cardano, making it easier for developers to work with other blockchains. Developers would otherwise need to spend extra time, effort, and funds to implement ECDSA and Schnorr over the SECP elliptic curves in #Plutus, increasing potential security risks and using an unrealistic amount of resources.

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Here’s What Might Have Triggered Ethereum’s Decline Below $1,600

After what has been two weeks of an incredible rally for the price of Ethereum, the digital asset seems to be running out of steam. ETH’s price has now declined once more below $1,600 after a sharp downturn on Tuesday. The culprit for this seems to be growing FUD across the community.

FUD Could Have Been The Trigger

According to Santiment, the social dominance of Ethereum grew rapidly in the last couple of days. While this can sometimes be a good thing, it tells a negative story this time around. Ethereum is now dominating 21% of cryptocurrency discussion on social media and the on-chain data aggregator says this might be evidence that FUD might be behind the dip. However, this may not be the only reason.

A report from Bitcoinist had previously shown that profit-taking in large assets such as Bitcoin and Ethereum had been ramping up with the increase in price. Santiment also highlights this in its post, pointing to the spike in the profit-taking ratio on January 20. Taking this in concert with the growing FUD, it presents a recipe for disaster for the digital asset.

Ethereum dominance

Another prominent event was the Wormhole attacker started moving the stolen funds around. On Monday, the attacker moved over $155 million in ETH to OpenOcean which they proceeded to exchange for staked ETH tokens such as stETH and wstETH.

The dumping of these coins on the open market saw sell pressure mount on ETH during this time. It contributed to the already declining momentum, resulting in the current dip in the price.

Can Ethereum Recover From Here?

Despite the recent decline, the overall sentiment for Ethereum is still skewing largely toward buy. This is because the cryptocurrency is still trading well above its 50-day and 100-day moving averages. And even with the decline, it continues to trend around its 200-day moving average.

What this shows is that, at least in the short to mid-term, there is still a lot of bullish sentiment surrounding the digital asset. Add in the ample support that has built up around $1,500 over the last couple of days and Ethereum is still presenting as a formidable choice of investment.

Ethereum price chart from TradingView.com

Investors are also seeing good profits during this time with 57% of all holders in profit. Figures like these also help to push a bullish narrative for the digital asset as more investors try to take advantage of the dip and move into the green. Overall, as long as ETH maintains its momentum and trading volume continues rising, it’ll retest the $1,600 resistance once more. 

ETH’s price is changing hands at $1,555 at the time of this writing. Its price is down 5.27% in the last 24 hours but trading volume is up 11.91% over the same time period to be sitting at $9.32 billion.

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Bitcoin Short-Term Holder Profit-Taking Spikes, Will BTC Price Recover?

On-chain data shows Bitcoin short-term holder profit-taking has spiked, will this lead to a correction in the price of the crypto?

Bitcoin Short-Term Holder SOPR Has Surged Recently

As pointed out by an analyst in a CryptoQuant post, instances of the current trend have led to declines in the crypto’s price in the past. The relevant indicator here is the “Spent Output Profit Ratio” (SOPR), which tells us whether the average Bitcoin investor is selling their coins at a profit or at a loss right now.

When the value of this metric is greater than 1, it means the holders as a whole are realizing some profits on their selling currently. On the other hand, values below the threshold suggest the overall market is leaning towards loss realization at the moment. Naturally, the indicator being exactly equal to 1 implies the average holder is just breaking even on their distribution right now.

One of the two main segments of the BTC market is made up of the “short-term holders” (STHs), which is a cohort that includes all investors who acquired their coins within the last 155 days. The holders who have been sitting on their coins for more than this threshold amount are called “long-term holders” (LTHs).

Now, here is a chart that shows the trend in the Bitcoin SOPR specifically for the STHs:

Bitcoin Short-Term Holder SOPR

As displayed in the above graph, the Bitcoin STH SOPR (as well as its 7-day moving average) has surged and broken above 1 recently. This means that as the BTC rally has taken place, the STHs have come into profits and they are now selling to harvest these gains.

The chart also includes data for the 7-day triple exponential average (TRIX) of the STH SOPR. The TRIX is a momentum oscillator that shows the percentage change in a metric’s moving average after smoothening it exponentially three times (hence the name).

From the chart, it’s visible that during this bear market, whenever the STH SOPR 7-day TRIX has hit a positive top, the price of Bitcoin has noticed a local top formation as well and has subsequently gone down.

It looks like most recently, the 7-day TRIX of the STH SOPR has shot up again, and the metric seems to be curving inside now, potentially moving toward a top formation.

This pattern looks similar to the instances seen earlier in the bear market, which could suggest this Bitcoin rally may be heading toward the same fate as those previous ones. Though that would be only if the pattern does complete and the indicator makes the top.

The analyst has also posted the chart for the 2018-2019 bear market, to see how the current rally compares with that of April 2019.

Bitcoin 2018-2019 bear market

Interestingly, the rally of April 2019 only felt a short-term pullback from the first big spike in the indicator; it was only with the second spike that the price topped out. There have been some similarities between the current rally and that of April 2019 already, which may mean that the current one could also shrug off this first spike in the indicator and continue its momentum, just like the past rally.

BTC Price

At the time of writing, Bitcoin is trading around $22,900, up 5% in the last week.

Bitcoin Price Chart