Its been a tough couple of weeks for the cryptocurrency market. Bitcoin (BTC) price is nowhere close to the price estimates of most analysts, a number of stablecoins misplaced their peg and the demise of one of many prime decentralized finance (DeFi) platforms sparked an occasion that resulted in $900 billion vanishing from the entire crypto market capitalization.
In the midst of the widespread fallout, MakerDAO (MKR) managed to show disaster into alternative and the collapse of TerraUSD (UST) has introduced renewed consideration to DAI, the longest-running decentralized stablecoin.
Data from Cointelegraph Markets Pro and TradingView exhibits that as the collapse of Terra (LUNA) price accelerated from May 9 to May 12, MKR climbed 66.2% from a low of $952 on May 12 to its present worth of $1,587.
Three potential causes for the MKR’s reversal in momentum embrace DAI sustaining its peg throughout the current market turmoil, the usage of a MakerDAO vault to finance provide chain shipments and the addition of staked Ether (ETH) as a type of collateral to mint DAI.
DAI holds regular throughout sturdy market turbulence
One of probably the most important elements giving investors extra confidence within the MakerDAO ecosystem is the truth that DAI held its greenback peg throughout a shaky market that noticed a handful of the preferred stablecoins lose their pegs.
Over the previous few days DAI demand has violently contracted by 25%, however the peg continues to be rock strong because of the Peg Stability Modules.
Stacking DAI demand into the PSMs throughout the bull market provides DAI holders peace of thoughts throughout even the roughest of weeks. pic.twitter.com/XGEYndBP05
— hexonaut.eth @ Permissionless (@hexonaut) May 12, 2022
During the peak of volatility, the price of DAI oscillated from a low of $0.9961 on May 11 to a excessive of $1.0046 on May 12 and is at the moment priced at $0.9994.
DAI holding regular regardless of a provide lower of greater than 2.2 billion DAI might have given investors extra confidence, particularly after Tether (USDT) briefly noticed its price hit a low of $0.9704.
Real-world adoption continues
Another issue offering a lift to MKR is its rising actual world adoption. Recently, the MakerDAO vault was used to finance a cargo of Australian beef and extra “use cases” are being deliberate.
A Maker Vault was used to finance a cargo of Australian Beef from Brisbane to Hong Kong.
On prime of that, the whole operation is at the moment being tracked utilizing @Mastercard Provenance, a blockchain traceability resolution.
This is the way it was potential
— Maker (@MakerDAO) May 10, 2022
On May 9, a MakerDAO vault was utilized along side the decentralized asset financing protocol Centrifuge to permit the commerce finance supplier ConsolFreight to mint DAI that was used to finance the transaction.
A nonfungible token (NFT) that contained the cargo and bill knowledge was additionally minted within the course of for monitoring functions and to assist preserve a document of the transaction. The cargo can be being tracked utilizing Provenance, Mastercard’s blockchain traceability resolution.
This transaction helped to reveal one utility of sensible contracts and stablecoins within the provide chain trade.
Staked Ether as collateral
Another issue constructing momentum for MakerDAO is the addition of assist for staked Ether as a type of collateral on the protocol.
sETH2 permits these collaborating in staking on the Ethereum BNB Chain to achieve entry to funds that may be in any other case locked up for an unknown period of time and put them to make use of incomes a yield in DeFi.
The collapse of UST, its knock-on results and the addition of Ether as collateral positions MakerDAO as the top-ranked DeFi protocol by complete worth locked (TVL), based on knowledge from Defi Llama.
MakerDAO claiming the highest spot comes after Curve, one other fashionable stablecoin liquidity protocol, noticed its TVL fall from $19.32 billion on May 5 to $8.71 billion on May 16.
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