From the beginning of the year until now, the past couple of weeks has proven to be the most alarming for the cryptocurrency industry. Whether Bitcoin or any altcoin, their prices are not even close to the analysts’ estimations.
In the past week, several stablecoins faced a similar issue where they lost their pegs. The de-pegging caused the demise of one of the largest platforms within the decentralized finance (DeFi) sector. One of the major networks is Terra which faced the de-pegging problem in the past week.
Due to the Terra network’s demise, several other stablecoins faced issues with de-pegging. If you are under the impression that it was not a big problem, then $900 billion vanishing from the overall crypto market would definitely raise your eyebrows.
MakerDAO Benefited from Terra’s Demise
While Terra was facing its demise, MakerDAO found it to be the best opportunity to shine. Because of the demise, DAI gained the attention of the investors wanting to find a secure and reliable stablecoin. Therefore, the investors are leaning toward DAI, which is run by MakerDAO. DAI is reportedly among the oldest stablecoins being offered within the decentralized environment.
According to a report from Cointelegraph Markets Pro, Terra’s value experienced a huge plummet from May 9 all the way up to May 12.
As Terra’s price dipped, it helped boost the price of MKR. The same data shows the price of MKR climbed up to $1,587 on May 12. Before the strong rebound, MKR’s value hovered at $952 on May 9, which was a low trading value. The Markets Pro report shows MKR rebounded by 66.2% in that particular interval.
Three Reasons that Caused the MKR to Grow
The analysts and observers are pointing out three reasons that could have earned MKR its current growth. The first possible reason is the maintenance of the peg by DAI as the market crashed. The second possibility was the smart utility of the MakerDAO vault. The third reason includes Ether staking to provide backup DAI.
DAI Didn’t Fall Despite the Market Turbulence
Despite the shaky market, DAI did not let its dollar peg leave the side of the stablecoin. While the majority of the stablecoins lost their dollar peg values, DAI held its head high. As the high volatility was recorded from May 11 to May 12, its price oscillated from $0.9961 and $1.0046. At the time of publication, DAI stands at $0.9994.
MakerDAO is gaining huge adoption and growth throughout the world. Real-world companies such as Australian Beef, ConsolFreight, Mastercard, and many companies have adopted DAO.
MakerDAO recently added Ether staking to act as the protocol’s collateral. Through the staking, the users can gain access to the locked funds for an undefined time. The staking will be carried out through the Ethereum BNB Chain.