A look at how MakerDAO benefits from the growth of LSDs


MakerDAO Vault Surge in WSTETH and MKR Price Increase

Overview

Despite the dominance of Liquid Staking Derivatives (LSD) protocols like Lido, recent data indicates that MakerDAO (MKR) may benefit from the growth of LSDs in the future.

LSD Growth on MakerDAO

New data shows that LSDs are reaching new highs on the MakerDAO protocol. The WSTETH-B vault now holds 309 million DAI, while the WSTETH-A vault has accumulated 221 million DAI. The RETH-A vault also generated a substantial 21 million DAI. These figures demonstrate the increasing popularity and adoption of Liquid Staking Derivatives within the Maker Protocol.

This trend bodes well for MakerDAO as it showcases the protocol’s ability to cater to users seeking exposure to staking rewards while using their staked assets as collateral for generating DAI. It also underscores the idea that competing in the DeFi sector is not a zero-sum game and one protocol can benefit from the progress of another.

Notably, wstETH has surpassed ETH as the primary crypto collateral for generating the highest amount of DAI debt on the MakerDAO protocol. The cumulative DAI debt generated from wstETH stands at 530 million, surpassing the 497 million DAI debt generated from ETH. This shift in dominance highlights the growing popularity and acceptance of wstETH as the preferred choice for collateralization and DAI generation within the MakerDAO ecosystem.

MKR’s Performance

MKR’s price has seen a material increase in the past week, reaching $924.74 at press time. The velocity of the token has also increased during this period, indicating a surge in activity. However, the MVRV ratio of MKR has also grown, suggesting that the incentive for MKR holders to sell their holdings may be high at the moment.

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By Team