MakerDAO rebounds price as DAI maintains indexing and investors pay attention to stablecoin security

MakerDAO rebounds price as DAI maintains indexing and investors pay attention to stablecoin security

It’s been several weeks since the cryptocurrency market. Bitcoin (BTC) prices are nowhere near the value estimates of most analysts, with several stablecoins losing their pegs and the death of a major decentralized financial (defi) platform triggering an event that has lost a total of $ 900 billion in cryptocurrency market capitalization.

In the midst of a massive collapse, MakerDAO (MKR) was able to turn the crisis into an opportunity and the collapse of TerraUSD (UST) brought renewed attention to DAI, the oldest decentralized stabilization.

Data from Cointelegraph Markets Pro and TradingView show that as the price of Terra (LUNA) accelerated from May 9-12, the MKR rose 66.2% from its May 12 low of $ 952 to its current price of $ 1,587.

Daily chart of MKR / USDT. Source: Tradingview

Three possible reasons for the MKR’s reversal include maintaining DAI during the recent market turmoil, using a MakerDAO vault for supply chain shipments, and adding Ether (ETH) as collateral to mint SO.

DAI remains stable during strong market volatility

One of the most significant reasons for investor confidence in the MakerDAO ecosystem is that DAI maintained its peg with the dollar during a volatile market that saw a handful of popular stablecoins lose their peg.

Over the past few days, demand for DAI has shrunk drastically by 25%, but Peg is still tight due to Peg stability modules.

Stacking DAI demand on PSM during bull market gives DAI holders peace of mind during difficult weeks.

– hexonaut.eth @ Unauthorized (xhexonaut) May 12, 2022

At the height of the volatility, the DAI price fluctuated from a low of 11 0.9961 on May 11 to a high of 00 1.0046 on May 12 and is currently quoted at $ 0.9994.

The DAI remained stable despite a supply shortfall of more than 2.2 billion.

Real-world adoption continues

Another reason to run MKR is its growing acceptance in the real world. Recently, the McDarrow vault was used to finance the shipment of Australian beef, and additional “use cases” are being planned.

A maker vault was used to finance Australian beef shipments from Brisbane to Hong Kong.

Also, the whole operation is being tracked using Provenance Fromm MasterCard A blockchain traceability solution.

That’s the way it is

– Creator (akerMakerDAO) May 10, 2022

On May 9, a MakerDAO Vault decentralized asset finance protocol was used with Centrifuge to allow trade finance provider consolefreit to mint the DAI used to finance the transaction.

A non-fungible token (NFT) that contains shipping and invoice data was also minted in the process for tracking purposes and to help keep track of transactions. The shipment is also being tracked using Provenance, MasterCard’s blockchain traceability solution.

This transaction has helped to demonstrate the application of smart contracts and stablecoins in the supply chain industry.

Ether is stuck as security

Another reason to create dynamics for MakerDAO is the addition of stacked ether support as a guarantee of protocol.

sETH2 allows those who are stuck with the Ethereum Beacon Chain to access funds that would otherwise be locked for an unknown period of time and DeFi will use them to earn revenue.

The fall of the UST, its indirect effects, and the addition of ether as a MACRDAO parallel position as a top-ranked defy protocol by total locked value (TVL), according to data from the Daffy Lama.

Top 5 protocols blocked by total value. Source: Daffy Lama

MakerDAO claims that the top spot came after Curve, another popular stablecoin liquidity protocol, its TVL dropped from 5 19.32 billion on May 5 to $ 8.71 billion on May 16.

The opinions and opinions expressed herein do not necessarily reflect the views of the author and not necessarily those of Every investment and trading step involves risk, so you should do your own research when making decisions.

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