MakerDAO’s spark protocol dominates lending market despite DAI challenges

November 26, 2023 10:54 PM AEDT | By Invezz

MakerDAO’s spark protocol dominates lending market despite DAI challenges — Image source: Invezz

DAI’s dwindling supply

DAI supply has plummeted since May 2021. Moreover, it dipped from late October’s 5.6 billion to press time levels of 5.3 billion.

3/ The supply of DAI dipped below 4 bill for the first time since May 2021. The fall of UST started DAI's supply decline after it shook faith in crypto-backed stables. The DSR recently rose to 8%, which did draw attention to the program, but has not yet caused any supply growth. pic.twitter.com/qE1KYKIwxk
— Rebecca Stevens (@rebeccastev) August 14, 2023

That shows individuals could be searching for lucrative yields in different stablecoins, refraining from holding DSR. While players have steadily used wsETH and ETH vaults, increased borrowing at Spark has augmented Ether’s debt. Moreover, WBTC core vaults surged to 86M from 76M in DAI exposure.

Stablecoins’ liquidity ratios are declining as DAI supply reduces and more individuals transition to volatile assets. That’s a worrying indicator, and Maker should consider recalling funds amid deteriorated liquidity or modifying borrowing rates.

MKR price

Maker’s native coin traded at $1,460 at press time, following a 0.23% increase within the previous day. Moreover, it gained 7.50%on its weekly price chart.

The altcoin’s upside stance mirrors broad market optimism within the past few sessions. The MakerDAO team should work on more advancements to keep the project afloat (considering the weakening network growth). Further, there has been a decline in MKR new addresses, confirming declining interest in the crypto.

The post MakerDAO’s spark protocol dominates lending market despite DAI challenges appeared first on Invezz

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.