Maker Metrics Under The Microscope: Clues To MKR’s Price Path Ahead
June 06 2024 - 10:00PM
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Amidst the crypto market resurgence, the smart contract platform
Maker and its native token MKR have experienced a challenging
period, with MKR demonstrating a consistent downtrend after
reaching a yearly high of $4,070 in April, plummeting to as low as
$2,440 just one week later. Dive into the protocol’s key
metrics and observe notable levels to gain insights into potential
price movements and actions for the MKR token in the near
term. Maker Protocol’s Updated Metrics Reveal Positive
Growth The Maker protocol, known for its decentralized
stablecoin DAI, recently disclosed updated metrics highlighting its
health and growth over the past month in a post on social media
site X (formerly Twitter). DAI, governed by MakerDAO’s
decentralized blockchain, enables the borrowing and lending of
cryptocurrencies. The current DAI supply, exceeding 5 billion DAI,
is a critical metric reflecting the total amount of DAI created and
circulating. Related Reading: Shiba Inu Whale Enter Buying
Frenzy, 715 Billion SHIB Snapped Up In Days Total Value Locked
represents the dollar value of assets locked within the Maker
Protocol. Despite being live on one chain since its inception,
Maker has approximately $8.76 billion locked, making it the
fourth-largest decentralized finance (DeFi protocol). The
Maker Protocol allows the minting of DAI by depositing accepted
assets into Maker Vaults. The ETH-C Vault type holds the largest
share, with approximately $2.07 billion worth of ETH locked.
The system surplus needs to reach 50 million DAI to achieve a
complete MKR burn. On the other hand, the Dai Savings Rate (DSR)
represents the rate at which the Maker Protocol rewards users for
locking their DAI within DSR contracts. Currently, the DSR cost
amounts to approximately 153 million DAI. Currently, the protocol
notes that most DAI remains within DeFi, with externally owned
Accounts (EOA) and the DSR serving as the top use cases, holding
over 2.3 billion and 1.96 billion DAI, respectively. In terms
of revenue generation, SparkLend D3M and Spark’s MetaMorpho D3M
lead the way, generating an estimated $155 million in annual
revenue based on their deposit APYs. This highlights the
significance of various collateral types and revenue streams within
the Maker ecosystem. Potential Catalyst For MKR’s Price? Despite
the growth and investor interest in the Maker ecosystem, the
upcoming Endgame Plan, a proposal to revamp its governance and
tokenomics, is expected to act as a catalyst for the MKR token,
potentially boosting its price. The proposal aims to
establish a self-sustainable equilibrium called the Endgame State,
envisioning a resilient ecosystem where Maker Core’s scope and
complexity will no longer change. Related Reading: Bitcoin
Approaching All-Time Highs: Why Is Retail Interest Rapidly
Declining? Currently, MKR is trading at $2,612, experiencing a
slight decline of over 2% in the past 24 hours and around 8% in the
last 30 days. CoinGecko data also indicates a recent 4.7% decrease
in trading volume, totaling only $72 million compared to the
token’s $2.4 billion market cap. If the Endgame plan indeed
generates renewed interest in the token and acts as a catalyst for
MKR, the next significant obstacles to monitor in the short term
are situated around the $2,660 level, which has impeded the token’s
ability to surpass higher levels in the past few days.
Additionally, on its potential path to reclaim the $3,000
milestone, resistance levels at $2,710 and $2,760 would need to be
overcome before potentially retesting the resistance at $2,845.
Moving forward, on the MKR/USD daily chart, the levels at $2,905
and $2,950 act as the final hurdles before reaching the $3,000
milestone. It remains to be seen whether further developments and
growth in key metrics, coupled with the anticipated Endgame
proposal, can stimulate a significant bullish momentum for MKR,
enabling it to overcome resistance levels and regain its bullish
trend. Featured image from DALL-E, chart from TradingView.com
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