Stable currencies have become an essential and important part of the cryptocurrency sector as they act as a deep floating base pair for most assets and also provide investors with a safe place to make a profit. The data also shows that stacked coins play an important role by serving as a gateway for capital flows to the crypto ecosystem.
While the largest stack coins on the market are currently controlled and issued by central organizations such as Tether or Circle, DAI and its issuance maker (MKR) is a stack coins project that follows the decentralization model that the cryptocurrency community relies on.
Data from Cointelegraph Markets and TradingView shows that the price of MKR rose nearly 100% over the past week, dropping from a low of $ 2,011 on April 7th to a steady new high of $ 4,096 on April 15th.
4 hour MKR / USDT chart. Source: TradingView
In recent weeks, MKR as an ecosystem has gained momentum with the drive to make the protocol fully decentralized and community-led.
Governance has become a desirable feature of the 2021 beef market as part of the broader DeFi (DeFi) movement, and MakerDAO provides one of the most proactive methods of governance in the cryptocurrency sector.
The presence of the MKR is essential to participate in the administration of the protocol, and the increasing number of management proposals to vote has increased the demand for MKR and raised the price.
DAI demand increases producer prices
As mentioned earlier, one of the biggest challenges for MakerDAO is managing the DAI stablecoin, which has grown exponentially in total supply in 2021 as the algorithmically driven stable currency better maintains its peg to the US dollar.
DAI offers for the price. Source: Currency Metrics
The rise in DAI offering is partly due to the use of a host of DeFi protocols including AAVE, Compound (COMP), and Cream Finance (CREAM) as an alternative to the decentralized heaping currency.
New DAIs are created by blocking security like Ethereum (ETH) or ChainLink (LINK) in the MakerDAO repository and creating a DAI for them.
Through this mechanism, the increase in DAI supply coincided with the increase in Total Locked Cost (TVL) in the Maker protocol, making the project the second ranked DeFi protocol after Compound, which has a $ 9.28 billion TV.
The total cost is locked to MakerDAO. Source: Davey Lama
With TVL on MakerDAO growing steadily along with rising DAI supplies, major indicators, including growth on social media, are starting to signal an imminent change in prices.
VORTECS data from Cointelegraph Markets Pro showed an optimistic outlook for MKR on April 13th before the latest price rally.
Cointelegraph’s exclusive VORTECS Crude Score is a mathematical comparison of historical and current market conditions drawn from a range of data points, including market sentiment, trading volume, recent price movements, and Twitter activity.
VORTECS ™ (green) indicates the price for the MKR. Source: Cointelegraph Markets Pro
As shown in the chart above, the MKR VORTECS valuation rose to green on April 12th and reached a high of 80 on April 13, about 31 hours before the price rally of 65%.
Now that altcoins have moved again and the DeFi sector is starting to improve, as evidenced by TVL’s rise in the ecosystem, MakerDAO may look forward as it is an option for investors looking to interact with Ethereum-based DeFi network protocols.