Crypto markets have been flat since mid-March, but MakerDAO’s MKR token has been on a rollercoaster ride. The crypto asset has gained a whopping 200% since the beginning of the year, hitting its highest level since May 2022 this week.
Moreover, MKR has gained around 50% in less than a month, so what is driving momentum for this DeFi asset?
MakerDAO Revenue Surging
On Sept. 27, DeFi researcher Thor Hartvigsen shared some MakerDAO fundamentals explaining why MKR has been so bullish.
Maker revenue has been surging recently, making it the largest revenue-generating protocol in the DeFi ecosystem, with a current annualized revenue of $193 million.
These numbers come from interest paid by DAI stablecoin minters from on-chain collateral and real-world asset (RWA) collateral such as U.S. Treasury bills.
The revenue has been bolstered by an expanding DAI supply and better rates on U.S. T-bills, the analyst noted.
“Maker revenue depends primarily on the total market cap of DAI as the collateral backing this stablecoin is what generates fees.”
A post on everything you need to know about:
• Current revenue numbers
• The recent price appreciation
• Upcoming catalysts that could cause a much more serious rally… pic.twitter.com/xqyNFPQuEO
— Thor⚡️Hartvigsen (@ThorHartvigsen) September 27, 2023
If the DAI supply can continue to grow, Maker revenue will keep increasing, which most likely will impact the price positively, he observed.
Moreover, the DAI Savings Rate (DSR) has been surging, which incentivizes users to hold DAI rather than non-interest-bearing stablecoins such as USDT and USDC. The DSR is currently 5%, which is much more than you get on DeFi platforms holding other stablecoins.
The MakerDAO roadmap includes an “Endgame Plan,” which will reduce the reliance on centralized collateral such as USDC. The protocol aims to accrue more Ethereum with the ultimate end game of making DAI a free-floating asset.
The long-term fundamentals for MakerDAO and DAI are solid, which is why it is defying crypto markets at the moment.
MKR Price Outlook
MKR was trading up 7% on the day at $1,510 at the time of writing. Moreover, the DeFi asset hit a 16-month high of $1,523 during early Asian trading on Sept. 28.
MKR has gained a whopping 18% since last weekend and 27% in the past fortnight. However, it remains down 76% from its May 2021 all-time high of $6,292, according to CoinGecko.
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