MakerDAO becomes the biggest DeFi winner right as the Ethereum prices are shooting up, but can it retain its spot as the top protocol? Let’s find out in the MakerDAO news today.
One month after being surpassed by Compound, MakerDAO becomes once again the most valued DeFi protocol, and the rise came because of Ethereum’s appreciation rather than the influx of funds. Maker has to capitalize on ETH’s rally which is causing the DAI debt to fill up quickly. Maker has to put in the work to retain the top spot as competitors are adding new features as well.
MakerDAO reached a billion dollars locked in value as its primary collateral ETH increased by 40% in the last week and the first DeFi protocol is poised to reach ten figures in collateral value while MKR regained its spot as the DeFi frontrunner. As a credit market on open finance, Maker allows everyone to collateralize a few tokens to take out a loan in DAI. Most of the Maker activity is made up of users taking leveraged long positions and this is done by borrowing DAI against ETH and using DAI to purchase even more ETH.
The latest ethereum rally pushed MakerDAO back into its pole position and overtook Compound as the most collateralized Defi protocol. The previous week saw the amount of ETH locked in Maker Vaults increase by 300,000 ETH or $9.6 million in today’s prices and the latest surge to billion dollars is not the result of ETH amount coming into the protocol but because of the recent price appreciation. One has to keep in mind that Maker has a lot of debt ceilings that ensure DAI’s supply doesn’t catapult and cause a huge shock. The DAI ceiling for ETH was raised from 180 million to 220 million a few days ago.
Five days later, the number of DAI minted from ETH hit 213 million and this is probably going to hit 100% utilization soon. KNC, ZRX, and BAT are far from their debt ceiling but the token prices are correcting and are using them as collateral against the loans which is not a bad idea at all. USDC is still the best option for everyone that wants to use Maker and to open a leveraged long on ETH because it is quite stable and has low collateral requirements.
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Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
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