The native token of DeFi stalwart MakerDAO is defying the crypto market correction as it continues to climb while those around it see red.
MakerDAO’s MKR token has languished behind the rest of the DeFi market for most of 2020 while those around it soared to monumental highs. The decentralized autonomous organization’s governance token only managed a yearly gain of 32% — just a fraction of that made by the likes of AAVE and YFI.
MKR has been having a bit of a revival recently. It surging to its highest price in three years as it hit $1,600 over the weekend, with some exchanges reporting spikes as high as $2,000.
At the time of press, MKR was trading at $1,560, up 9% on the day. It has made a monumental 136% over the past seven days and 210% over the past 30 days.
DAI Demand Driving Maker Moves
The latest Insights newsletter from analytics provider Glassnode attributed the increase in the token’s price to a massive increase in demand for DAI, the stablecoin generated by the MakerDAO protocol.
“With demand for stablecoins increasing, and the interest rate for borrowing DAI now sitting above zero, yield seekers have more of an incentive to hold MKR, as it can generate revenue in the form of interest repayments.”
The DAI market cap has surged 2,650% in 2020 from around $42 million to $1.15 billion. It currently stands at $1.36 billion.
As a result, the latest Maker governance poll has been added to the voting portal to signal support for or against increasing the System Surplus Buffer from 4 million to 10 million:
The System Surplus Buffer parameter controls the maximum amount of DAI that can accrue to the protocol from Stability Fee revenue prior to MKR buy and burn (FLAP) auctions being triggered. At the time of press, 100% of the votes were in favor of the increase.
Top Protocol by TVL
Maker is still the leading DeFi protocol in terms of total value locked. According to DeFi Pulse, Maker TVL is just under $4 billion, more than doubling since October last year. It has a leading market share of 18.6% and is over a billion dollars in TVL ahead of the second protocol on the list, Aave.
The TVL across all DeFi platforms has declined slightly as markets cool off from their recent rally. Total TVL currently stands at $21.4 billion according to DeFi Pulse, down 7% from its all-time high over the weekend.