Assessing MakerDAO’s [MKR] health following its displacement by Lido

1 year ago 89
  • MakerDAO had a strategy surplus astatine property time, indicating that the full indebtedness owed was not much than the value of the collateral successful the system
  • Its displacement by Lido mightiness beryllium impermanent owed to its slipping grip connected the ETH staking market

Leading decentralized concern protocol (DeFi) MakerDao [MKR] provided users with an overview of its existent authorities successful 2023. The DeFi protocol took to Twitter connected 2 January to highlighted the magnitude of DAI tokens it had successful circulation and its full worth locked (TVL).

The tweet besides highlighted MakerDAO’s collateralization ratio and the fig of DAI tokens it held arsenic System Surplus until the tweet went live. 

How 2023 started

• 5.7 cardinal DAI successful circulation.

• $7.2 cardinal of full worth locked.

• 141% collateralization ratio.

• 74.9 cardinal DAI successful the System Surplus.

Let's go! pic.twitter.com/VIDn06Kguy

— Maker (@MakerDAO) January 2, 2023


Read MakerDAO’s [MKR] Price Prediction 2023-2024


According to MakerDAO, the existent circulating proviso of its DAI stablecoin was 5.7 billion. This enactment it 4 places down different stablecoins, including Tether [USDT], USD Coin [USDC], and Binance USD [BUSD], information from CoinMarketCap revealed

Source: CoinMarketCap

MakerDAO besides confirmed that its existent collateralization ratio stood astatine 141%. Collateralization ratio refers to the magnitude of collateral that a borrower has pledged to unafraid a loan.

In the discourse of MakerDAO, the collateralization ratio represents the worth of the collateral (usually ETH, BAT, and USDC) comparative to the worth of the indebtedness (DAI).

This means that the worth of the collateral indispensable beryllium astatine slightest 141% of the worth of the debt. This precocious collateralization request is successful spot to support the system’s stableness and guarantee that borrowers person capable collateral to screen their debts. 

Further, MakerDAO stated that it held 74.9 cardinal DAI successful its System Surplus until the clip of the tweet. The strategy surplus is an important measurement of the wide wellness and stableness of the MakerDAO system.

A surplus indicates that the strategy is capable to withstand shocks oregon declines successful the worth of the collateral arsenic it measures the quality betwixt the worth of the collateral successful the strategy and the full indebtedness owed.

MakerDAO dethroned by Lido, but for however long?

During the intraday trading league connected 2 January, the TVL of starring liquid ETH staking level Lido Finance exceeded that of MakerDAO. Thus, Lido managed to displace Maker arsenic the DeFi protocol with the highest TVL. 

Till the clip of press, MakerDAO’s TVL was spotted astatine $5.92 billion, successful 2nd spot down Lido’s $5.97 billion. 

Source: DefiLlama

According to information from Dune Analytics, arsenic much options for staking Ether go available, Lido Finance’s position arsenic a person successful the marketplace whitethorn beryllium astatine risk. 

Lido’s marketplace stock successful the ETH staking ecosystem decreased somewhat astatine the commencement of the 2023 trading year. This was pegged astatine 29% astatine property clip and had been consistently declining since May 2022.


Are your MKR holdings flashing green? Check the nett calculator


With a persistent diminution successful Lido’s stock of the ETH staking market, a corresponding autumn successful its TVL arsenic the twelvemonth progresses mightiness pb to MakerDAO’s instrumentality to its archetypal spot. 

Source: Dune Analytics

Abiodun is simply a full-time writer moving with AMBCrypto. He is besides a lawyer with implicit 2 years of experience. With a keen involvement successful blockchain exertion and its limitless possibilities, Abiodun spends his clip knowing the technology, gathering projects, and educating radical astir it.

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