Maker (MKR), one of the leading players in the decentralized finance (DeFi) sector, has experienced a significant price increase of 11% in the past seven days. Despite a slight decrease in the past hour, the token’s performance continues to be impressive.
The recent price performance of Maker has been noteworthy, with a solid increase of 11% compared to the previous week. The token also recorded a 4.21% price increase in the past 24 hours, indicating strong momentum in the short term. However, a small correction of 0.81% in the past hour highlights the market’s volatility.
Currently trading at $1,220.43 per MKR, the token remains 80.75% below its all-time high of $6,339.02. While the recent price increase is encouraging, it is important to consider the historical context and factors influencing the dynamics of the crypto market. The MakerDAO community recently voted in favor of a temporary increase in the interest rate paid to holders of the protocol’s decentralized stablecoin DAI. This proposal introduced the Enhanced Dai Savings Rate (EDSR), a mechanism to temporarily increase the Dai Savings Rate (DSR) during periods of low utilization.
The EDSR proposed by Maker’s founder, Rune Christensen, can increase the effective DSR to 8% when utilization ranges from 0% to 20%. The mechanism is designed to decrease the DSR gradually as utilization increases. This is not the first time Maker has adjusted the DSR. Over the past few months, the protocol has increased the DSR three times: first to 1% in November, then to 3.3% in May, and most recently to 3.49% in June.
The latest EDSR proposal aims to incentivize DAI holders and stimulate demand for the stablecoin. Despite the recent increase in DSR, data from Dai Stats shows that investors have only deposited $307 million into the DSR, representing 6.7% of the total DAI supply. The circulating supply of DAI has decreased from over $6.9 billion in the previous year to $4.6 billion.