In the midst of an onslaught in the crypto market today, only one crypto made the biggest gain: Maker (MKR).
At the time of writing, MKR was trading at $896, notching an impressive 21% increase in the weekly scale, and outperforming the rest of its rivals in the top 100 list of crypto market trackers Coingecko and CoinMarketCap.
Maker (MKR) Stands Out With Solid Gains
Source: Coingecko
MKR is up 35% in the last 30 days and 76% year to date, data shows. However, the token, with a market cap of $873.6 million, was still down nearly 85% from its all-time high (ATH) of almost $6,300, hit about two years ago in May 2021.
Source: Coingecko
In spite of the fact that the token fluctuated sideways between $760 and $800 in the wee hours of the morning, it broke out of its constricted range as soon as the sun rose. After that, MKR soared through the phases and touched $920 at its peak.
Source: CoinMarketCap
MKR is the utility token of the Maker protocol, which also serves as the system’s governance token and recapitalization resource. Non-mineable MKR tokens are generated based on the demand and supply of the stablecoin DAI.
MKR token holders administer the project via MakerDAO, an open-source community project on the Ethereum blockchain and a decentralized autonomous organization.
Maker (MKR). Image: The Coin Republic
Maker (MKR) is among the most significant decentralized apps (dApps) on the Ethereum blockchain. It was also the first decentralized financial (DeFi) application to garner widespread popularity.
The objective of the platform is to unleash the potential of DeFi by establishing an inclusive platform of economic empowerment, i.e., by providing everyone with equal access to the world’s financial markets.
Worry Surrounds Borrowing Of DAI
Meanwhile, a prospective change to one of DeFi’s oldest and largest protocols has the crypto community concerned.
A component of the proposed reconfiguration of MakerDAO would permit users to borrow its DAI stablecoin in exchange for its MKR governance token.
Market observers are concerned that allowing users to borrow DAI stablecoin against MKR might be compared to the mechanism underlying Terra’s (LUNA) ill-fated UST stablecoin, which crashed in May 2022 and washed out about $500 billion USD from the crypto market.
MKR total market cap at $877 million on the daily chart | Chart: TradingView.com
PaperImperium, a self-described “governance liaison,” remarked on Twitter:
“It’s devastatingly disappointing to see Maker’s co-founder pushing this plan […] it’s as if nothing was learned this cycle.”
It’s devastatingly disappointing to see @MakerDAO’s co-founder pushing this plan. It’s as if nothing was learned this cycle. pic.twitter.com/XQq8NydHqb
— PaperImperium (@ImperiumPaper) February 23, 2023
USDT Mkt Cap + BUSD Mkt Cap + USDC Mkt Cap + DAI Mkt Cap + FRAX Mkt Cap, Source: The Defiant Terminal
The Defiant Terminal ranks DAI as the fourth largest stablecoin with a market valuation of $4.1 billion on Ethereum.
According to PaperImperium, delegated tokens would return to circulation in the event of a liquidation spiral, pulling the value of MKR down.
As a result, this could make the protocol a sitting duck from malevolent actors who can quickly seize control over governance, as demonstrated by the Mango DAO attack.
-Featured image from Rare Gallery