MakerDAO’s DAI fell behind Terra’s UST months ago but now it is trying to catch up but exactly how, we are reading more in our latest altcoin news.
MakerDAO implemented or it is just now mulling over new updates to help improve the adoption of the stablecoins. For the longtime readers, you are surely aware of the two leading decentralzied stablecoin providers which are Terra and MakerDAO. Both Tether and USD Coin are bigger than both of these projects but they failed the decentralized test.
MakerDAO is behind the DAI stablecoin and Terra is behind the UST stablecoin. Though Terra made a late entrance to the market, UST led the way as the biggest stablecoin by market cap. USDT has a market cap of $80.8 billion, USDC has $52.4 billion and Terra has $15.8 billion while DAI is last with $9.3 billion. UST took the lead in December while some only thought that it was a fluke akin to various other flash attempts from the past.
Just as the stablecoins urged in size, so did the Terra LUNA token which is now a top 10 crypto by market cap, right ahead of Solana, Cardano, and avalanche. Since UST overtook DAI, the price of LUNA increased from $78 to today’s price of $93.5 which is a 19% hike. The parallel increase of the two assets is no surprise either and that’s because each time more UST is minted and LUNA gets destroyed. As the Terra DEFi ecosystem expanded and increased the demand for a native stablecoin, there has been a lot of LUNA tokens were destroyed.
MakerDAO implemented new updates to help improve the adoption of its stabelcoin and rethink the tokenomics of the native MKR token. DAI Fell behind Terra’s UST but not It is trying to change things. One proposal under discussion is that of turning MKR into a vote-locking token which means that to take part in governance proposals you would need to stake your tokens and in exchange, you will receive stkMRK as well as voting rights. Another update was the one of adding ETH liquidity provision tokens as collateral to MakerDAO.
With the adoption of stETH-ETH LP Tokens, the list of eligible collateral got a little longer and it is an interesting inclusion because it shows how the conservative project is onboarding more risks than it did in the past. The reason for this being riskier is that it relies on two other crypto projects.
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