- Maker explained that it would reform DAI and MKR.
- DAI may not be able to compete with USDT despite plans to increase supply.
As MakerDAO’s plan [MKR] co-founder Rune Christensen becomes a reality, then the project could upgrade its governance token and decentralized stablecoin DAI. AMBCrypto has reviewed the Christensen memo wrote to the Maker community on March 12.
Most of it was centered around the Endgame, which aims to scale DAI’s supply to 100 billion and more. For the unfamiliar, DAI’s current supply was 5.35 billion.
An upgraded version doesn’t seem to be the solution
In May 2023, the Maker team introduced Endgame as a way to support DAI. One of its missions was to make it competitive with stablecoins like USDT. But since that time, development did not affect the stablecoin.
This time around, Maker says an improved MKR and DAI would bring it closer to its goals. If this happens and DAI receives an offer of 100 billion, the stablecoin’s market cap could rise from 27th position.
However, this prediction does not mean that other stablecoins such as USDT and USDC, which are well above them, would continue to stagnate. At the time of writing, MakerDAO’s Total Value Locked (TVL) was up 20.32% over the past 30 days.
The TVL assesses the overall health of a given protocol. Therefore, the above increase suggests that market participants believe that their deposits would yield better returns.
But in terms of stablecoin volume, DAI lags behind. Using data from DeFiLlamaAMBCrypto noticed that participants were bridging Ethereum’s stablecoin [ETH]Arbitrum [ARB]and such.
However, the changes over the past seven days were not impressive, indicating that instability is on the minds of participants. Should DAI’s volume fail to surge higher, the stablecoin could only remain “king” in the decentralized arena, and not in the broader market.
Development is declining, as is traction
Moreover, we checked whether MakerDAO has made efforts in terms of development activities. According to Santiment, development activity surged on March 11.
When this metric increases, it means developers are bringing new features to the market. But at the time of writing, development had slowed, indicating that code commits as the network was upgraded had slowed. The decline too implicit that it may not be the time to turn bullish on MKR.
Another metric AMBCrypto looked at was network growth. Network growth illustrates user adoption by tracking the number of new addresses involved in the initial transfer.
Source: Santiment
Realistic or not, here is DAI’s market cap in MKR terms
If the metric had increased, it would have indicated that interest in the Maker ecosystem has increased. However, the drop here implies that traction on the network had declined.
Going forward, market players can keep an eye on DAI and MKR to see if the proposal or possible approval would have any effect on the cryptocurrencies.