As the go-to platform for crypto lending and borrowing, MakerDAO has emerged as a prominent player in the DEFI ecosystem. The platform enables users to lend and borrow crypto at fixed interest rates through a smart contract process.
Read on to find out what MakerDAO is and how this DeFi granddaddy works.
???? What is MakerDAO?
MakerDAO is a decentralized autonomous organization (DAO) designed as an open-source application on the Ethereum blockchain. Launched in 2014, MakerDao is one of the largest dApps on the ETH blockchain. Additionally, it holds the distinction of being the first DeFi application to achieve widespread adoption.
The platform also allows its users to lend and borrow crypto at fixed interest rates through a process known as a smart contract.
⚙️ How Does this Protocol Work?
MakerDao serves various functions in the Maker system. It allows users to send value globally, similar to Bitcoin. Because of the extreme volatility of crypto assets, MakerDao offers lending and repayment services through its stablecoin Dai created by leveraging the Maker protocol.
The platform also offers lending and repayment services through its stablecoin, Dai, which users generate by leveraging the Maker protocol. Users must deposit Ethereum crypto into the smart contract to access borrowing capabilities, establishing a collateral Debt Position (CDP).
???????? MakerDAO’s Latest Developments
MakerDao has introduced two new tokens, “NewStable” and “NewGovToken,” which are improved versions of DAI and MKR. The “NewGovToken” allows access to Governance AI Tools and Participation Incentives. In the AI sector, the Maker with Purpose Fund will support free AI models for social impact projects.
Additionally, MakerDAO will launch “NewChain,” a hard fork that enhances governance security for users and protocols using DAI and “NewStable.” The goal is to create a strong governance infrastructure for DeFi and become the leading stablecoin project in the next three years, operating on an autonomous DAO economy.
???? MakerDAO (MKR) Tokenomics and Price Analysis
As of 12:34 a.m. EST, the price of Maker (MKR) is trading at $1,137, accompanied by a 24-hour trading volume of $127,934,941. Over the last 24 hours, the price shows an increase of 5.33%; in the past 7 days, it has surged by 18.46%.
With a circulating supply of 900,000 MKR tokens, the market capitalization of Maker currently amounts to $1,022,795,838.
MKR’s price exhibits a strong bullish momentum as it trades within an upward channel, breaking free from an extended period of consolidation. The recent formation of a second higher low at $863 confirms the positive sentiment, suggesting that the price may reach the channel’s upper trendline.
Moreover, the crossover of the 50-day and 200-day exponential moving averages further reinforces the bullish outlook, signaling the potential for a significant surge in the price of MKR. Investors may expect the continued upward movement to $1300.