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MakerDAO: Back on Top Despite Falling $8B in Total Value Locked

 


MakerDAO's (MKR) Total Value Locked (TVL) fell to new lows in the final week of May on waning investor interest in decentralized finance ( DeFi ).

Maker was the protocol with the highest total locked value in April, behind Curve and Lido, according to data from DeFiLama. Total Value Locked is the value of coins in a log that are staking.

Maker lost 45% of its TVL yearly high on February 10, 2022. On that day, TVL was in the $18.12 billion range. By May 24, 2022, it had fallen to about $9.82 billion, making it a new yearly low.

What is MakerDao?

MakerDAO is a peer-to-peer organization created on the Ethereum network to enable people to lend and borrow cryptocurrencies. The P2P organization is also known as Decentralized Autonomous Organization (DAO). The lending and borrowing process is governed by smart contracts.


MakerDAO also uses a protocol behind the stablecoin DAI - a cryptocurrency that maintains a 1:1 peg to the USD. Think of 1 DAI as one US dollar. What makes it special is that each DAI is backed by Ethereum and not by a third party claiming to have the required collateral. As Ethereum price is highly volatile, maintaining the peg poses some interesting challenges, as we saw in the recent crash of LUNA's stablecoin UST.


The project was started in 2015, but no ICO was carried out. Instead, it opted to sell MKR tokens privately to fund development over time. Maker's DAI stablecoin was launched in early 2018 and has since gained significant popularity.


As a growing ecosystem, there are more than 400 services and applications such as games and decentralized finance platforms that have integrated DAI .


MakerDAO suffers from crypto crash

MakerDAO's TVL fell significantly due to the overall crypto market crash. On the first day of the year, Maker's TVL was around $17.5 billion. That value fell 43% to just over $9 billion in the last week of May.


Ethereum 's TVL, by comparison, fell 50% from $146.78 billion on Jan. 1 to $72.93 billion on May 24, 2022.


Even though MakerDAO has lost more than $8 billion in Total Value Locked, it is the dApp with the most Value Locked.

MakerDAO now has a relatively higher Total Value Locked than other popular dApps like Curve, Aave, Lido, Uniswap, Convex Finance, PancakeSwap , Compound, JustLend, Instadapp and SushiSwap .


MKR Course Update

The MKR price opened at $2,247.69 on February 10 and hit the current low for the year of $984.81 on May 12. Since then, the MKR has increased slightly. At the time of writing this article, the MKR price is hovering around the $1,300 mark.


Overall, that's a 44% drop in value for MKR over the past 15 weeks.


According to Coinmarketcap, the MKR price reached its last all-time high (6,339 USD) on May 3, 2021. The Maker DAO price is currently more than 80% off its last all-time high.


Disclaimer

All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at their own risk.

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