Maker (MKR) up 22% as Community Increases DAI Holders Interest Rates

0

Last Updated on 6 November 2023 by CryptoTips.eu

Leading decentralized finance (DeFi) project Maker (MKR) has been in a recent bullish trend. The token has gained 22% over the last seven days according to Coin Market Cap. It is also up 1.40% in the last 24 hours.

The token is currently trading at $1,275.25, which is still way below the all-time high price of $6,339.02. However, it is currently the best performing crypto asset among the top 50 over the last seven days.

Advertentie.

Increased DAI interest rate driving price

Maker is a DeFi project built on the Ethereum network. It has an arm, MakerDAO, which is responsible for generating DAI, Maker’s decentralized stablecoin. Maker rewards DAI holders with an interest rate to encourage the use of the stablecoin.

The MakerDAO community recently voted to increase the interest rate paid to holders of DAI. The proposal introduced the Enhanced Dai Savings Rate (EDSR), a mechanism to temporarily boost the Dai Savings Rate (DSR) to users during periods of low utilization.

The DSR can increase to 8% at times of low DAI utilization, between 0-20%, and will also reduce the interest rate when the utilization slowly increases. This is the third time the community has voted to increase the interest rate in order to incentivize DAI holders and drive demand for the stablecoin.

It is likely that MakerDAO is achieving its goal of driving demand, as the increasing price of MKR, which is the utility and governance token of the Maker system, suggests a rising demand for DAI stablecoin. 

MKR could go higher with good governance

The increased interest rate for DAI holders is one strategy that seems to be working in driving demand for DAI. It has also succeeded in getting investors’ attention, who may be watching closely to see what the Maker system does next.

If better governance decisions are made and more incentives are put in place, a greater demand for DAI could be created, which will ultimately lead to more utilization and higher price for MKR.

Although the market is generally down, MKR has shown strength, which means it can even do better in the future when the market finally recovers and gets set on a bullish path. The token is still a long way from its all-time high price, but getting there and even beyond is possible with better governance decisions.

Grey82 / Depositphotos.com

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
View all posts