MakerDAO is on the road to atonement after poor performance at the beginning of 2020. The total value locked in MakerDAO has reached $1 billion as its primary asset, Ethereum, skyrocketed 40% over the last week. As the first decentralized finance protocol to hit ten figures, MakerDAO has restored its position as DeFi ‘s top protocol.
MakerDAO is a credit market on open finance that allows users to securitize a couple of tokens to secure a DAI loan. The outright majority of operations on Maker involves users taking leveraged long positions on Ethereum. This is achieved by collateralizing Ethereum to secure DAI and using the DAI to purchase more Ethereum.
Ethereum price surge drives MakerDAO to pole position
Ethereum ‘s recent bull-run has driven MakerDAO back to number one, outpacing Compound as the most collateralized decentralized finance protocol. Over the last week, the total figure of Ether locked in MakerDAO increased by about 300,000 ETH (about $96 million). The most recent milestone of Maker to hit $1 billion is not due to the large amount of Ethereum finding its way into the protocol, but rather to the recent appreciation of the value of Ethereum.
On July 22, the Ether DAI ceiling was increased from 180 million DAI to 220 million DAI. Notably, the DAI ceilings ensure the supply of DAI and do not project, causing the supply shocker. Five days after the DAI ceiling has been set, the amount of DAI secured against Ethereum currently stands at 218 million, and is about to reach 100% very soon.
Progressive growth in the DeFi industry
Furthermore, MakerDAO is followed closely by Compound on the list of DeFi protocols with the highest value locked. Particularly, Compound has a value of $767 million locked in its protocol currently. The two are followed by Synthetix, a decentralized platform built on Ethereum, with $429 million in total value locked.
The year 2020 has been a dull one for MakerDAO and MKR investors. However, things have begun looking good as a new market cycle commences. MakerDAO can now start again and maintain its spot as the top DeFi protocol by adding a range of collateral and functionalities.