The Surging Price of MakerDAO’s MKR Token
The price of MakerDAO’s native token $MKR has been defying the bearish trend in the cryptocurrency market, experiencing a surge of nearly 200% this year. It is currently trading at a 16-month high above $1,500 per token. At the beginning of the year, the cryptocurrency was valued at around $500 after a decline from its all-time high above $6,000 during the bull run. Now, it has reached its highest level since May 2022.
Protocol’s Growing Annualized Revenue
The rise in Maker’s price can be attributed to the protocol’s increasing annualized revenue. This growth is supported by the collateral backing its DAI stablecoin, which is close to reaching $200 million. The protocol now includes real-world assets (RWAs) as collateral, such as U.S. Treasury bills that offer investors a 5% annual percentage yield. These RWAs contribute to 53% of DAI’s collateral.
Researcher Thor Hartvigsen reveals that 63% of the protocol’s annualized revenue comes from these real-world assets in collateral. As DAI’s supply expands alongside interest rates in the U.S., Maker’s protocol also grows.
Potential Catalysts for Further Growth
Hartvigsen highlights that the supply of DAI has rapidly increased from $4.5 billion to over $5.5 billion due to the 5% yield offered by the sDAI vault on the Spark Protocol. This protocol, launched by prominent members of the Maker community, focuses on DAI lending. The yield is generated from Maker’s revenue earned on the collateral.
The researcher suggests that as long as DAI’s supply continues to grow, Maker’s revenue will also increase, which is likely to have a positive impact on the token’s price. Going long on MKR is therefore a direct bet on the future growth of the DAI supply. Other potential catalysts for further growth include a 1:12000 token split to lower the price and a possible rebranding of the tokens.
Hot Take: MakerDAO’s MKR Token Soaring Amidst Bearish Market
The native token of MakerDAO, $MKR, has been defying market trends with a remarkable surge this year. Despite the bearish sentiment in the cryptocurrency space, MKR has experienced a nearly 200% increase and is currently trading at its highest level since May 2022. This impressive growth can be attributed to MakerDAO’s growing annualized revenue, fueled by real-world assets serving as collateral for its DAI stablecoin. With 63% of its annualized revenue coming from these assets, Maker’s protocol is thriving alongside DAI’s expanding supply and increasing interest rates in the US. As long as DAI continues to grow, MKR’s price is expected to rise further, making it an attractive investment option.
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