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After the collapse of Terra UST, MakerDAO returned on track, forcing investors to search for dollar-pegged assets
Going through a couple of rough weeks, the cryptocurrency market has managed to move further along with making further developments. The price of Bitcoin (BTC) is not matched even near the prices that most analysts and experts have estimated. The number of stablecoins has lost its peg with fiat currencies. The falling of one of the top decentralized finance platforms that sparked the event resulted in the vanishing of $900 billion worth of value from the total amount of crypto market cap.
Amidst the large-scale fallout, MakerDAO (MKR) successfully managed to turn the ongoing crisis into an opportunity. The collapse of the UST stablecoin of the Terra network has also brought renewed attention to DAI, which is the longest-running decentralized stablecoin. Data shows that while the collapse of the price of Terra (LUNA) accelerated from 9th May to 12th May, the price of MKR climbed up to 66.2% from approx a low of about $952 on 12th May to its current trading value of $1,587.
Three potential reasons for the reversal of MKR in momentum included DAI maintaining its peg while the turmoil that the market has seen recently where the use of MakerDAO vault for its shipments of financial supply chain and the addition of staked Ethereum token Ether (ETH) as a collateral form to mint DAI stablecoin.
One of the most significant factors that give investors more confidence in the ecosystem of MakerDAO is that DAI held its peg with dollars during the unstable market condition that saw several most popular stablecoins lose their peg value. During the time of high volatility, the price of the DAI oscillator went from a recent low of $0.9961 on 11th May to its high of about $1.0046 just the next day on 12th MAy, and it is currently trading at $0.994.
Despite a decrease in supply, DAI holding steady after losing an amount of more than 2.2 billion DAI stablecoin may have given more confidence in the investors, especially after the price hit the largest stablecoin saw that by the market capitalization, Tether (USDT) a low of about $0.9704.
Apart from this, another factor that provided a boost to MKR is growing in terms of adoption in the real world. The MakerDAO vault recently was used to finance an Australian beef shipment and additional planned use cases.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
