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Chances For MKR Rally Grow As Utility Token Hits Record High

mkr/usd

The chances for a MKR rally grows as the utility token reached record highs as per the skyrocketing utility statistics. In our latest altcoin news, we are reading more about the bullish appeal for the token.

Chris Burniske one of the partners at the venture capitalist firm Placeholder in New York outlined the steadily growing locked value inside of the MKR liquidity pool. The fund manager presented that MKR is an undervalued token because it didn’t receive the same investments as other tokens in the Defi space and that chances for MKR rally are growing:

“People mostly sleeping on MKR while utility goes through the roof, and conversations abound around its value capture model.”

MKRUSD rebounds 38% alongside Maker’s TVL surge. Source TradingView.com

As of this week, the TVL of Maker increased towards $2 billion which is the highest level recorded. The capital came in form of USDC deposits comprising 0.6 percent of TVL at the start of September. However, by the end of the month, the share surged to about 20 percent which is $400 million as of the latest. The data aggregator Messari credited the governance of the platform for the higher capital influx. The US-based crypto indexing portal explained that MKR developers restored the DAI peg which means they can now ensure “incentivizing a stablecoin-collateralized debt with higher debt ceilings and lower liquidation ratios.”

maker
Maker is approaching $2 billion in Total Value Locked. Source DeFiPulse

Making the debt creation cheaper allows people to mint DAI by allocating cheaper resources which is promised to increase the demand for the stablecoin while putting pressure on its price. It’s essentially when DAI becomes a target of the yield farmers, as they lock DAI in other liquidity pools, thereby pushing the price to reach $1:

“Dai remains one of the most used stablecoins across DeFi,” noted Messari. “As the industry continues to grow at this rapid clip, it’s only natural that Dai will continue to grow with it given its entrenched network effects.”

dai supply
Dai supply and the impact of liquidity mining projects’ launches on it. Source Messari

MKR marked a bullish comeback over the past 14 days on as it rebounded by 38% to $600 from its low at $434. Messari noted that the value of the token could have been even higher if there weren’t other DeFi projects that stole its spotlight. The portal blamed Maker’s boomer persona which promotes low-interest rates thus impacting MKR earnings. With the interest rates increasing, MKR will regain much of the lost value against other DeFi tokens like YFI and COMP.

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