MakerDAO regained prominence after the collapse of UST on Terra forced investors to look for a truly “stable” dollar-pegged asset.

It’s been a tough few weeks for the cryptocurrency market. Bitcoin (BTC) price is nowhere near most analysts’ price estimates, several stablecoins have lost their peg, and the demise of one of the leading decentralized finance (DeFi) platforms sparked an event worth $900 billion Dollars annihilated capitalization from the entire cryptocurrency market.

In the midst of a widespread crisis, MakerDAO (MKR) managed to turn the crisis into an opportunity, and the collapse of TerraUSD (UST) drew renewed attention to DAI, the longest-lived decentralized stablecoin.

Data from Cointelegraph Markets Pro and TradingView shows that MKR surged 66.2% from a low of $952 on May 12 to its current level of $1,587 as Terra (LUNA)’s price decline reversed from May 9 to May 12 May 12 accelerated.

MKR/USDT 1-day chart. Source: Trade View
Three possible reasons for the change in MKR dynamics are that DAI is maintaining its peg during the recent market turmoil, using the MakerDAO vault to fund supply chain deliveries, and adding Ether (ETH) as a form of collateral for the DAI coin.

DAI remains stable during severe market turbulence
One of the key factors giving investors more confidence in the MakerDAO ecosystem is the fact that DAI has maintained its dollar peg in a shaky market where several of the most popular stablecoins have lost their peg.

At the peak of volatility, the DAI price oscillated from a low of $0.9961 on May 11 to a high of $1.0046 on May 12 and currently stands at $0.9994.

DAI remains stable despite supply cuts of more than 2.2 billion. DAI may have given investors more confidence, especially after the price of Tether (USDT) briefly touched lows of $0.9704.

Acceptance in the real world continues
Another factor driving the development of MKR is its growing adoption in the real world. Recently, MakerDAO storage was used to fund shipping of Australian beef, and more “use cases” are planned.

On May 9, MakerDAO storage was used in conjunction with Centrifuge’s decentralized asset finance protocol to allow trade finance provider ConsolFreight to generate DAI used to fund the transaction.

It also created a non-fungible token (NFT) containing shipping and billing data to track and record the transaction. The shipment will also be tracked using Provenance, Mastercard’s blockchain tracking solution.

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

Pledged ether as collateral
Another factor driving MakerDAO’s momentum is its support for Ether staking as a form of protocol delivery.

sETH2 allows those backing the Ethereum BNB chain to access funds that would otherwise be locked for an unknown amount of time and use them to generate income in DeFi.

According to Defi Llama, the collapse of UST, its side effects and the addition of Ether as collateral make MakerDAO the best DeFi protocol by Total Value Locked (TVL).

Top 5 logs blocked by total cost. Source: Defi Lama
MakerDAO maintains the top spot after Curve, another popular stablecoin liquidity protocol, saw its TVL fall from $19.32 billion on May 5 to $8.71 billion on May 16.

Source: CoinTelegraph