How MakerDAO plans to reap benefits from interest bearing stablecoins
- MakerDAO’s sDAI captured attention amid the growing attention towards interest-bearing stablecoins.
- DAI’s market cap grew as MKR’s price started to rise.
Despite the volatile nature of the DeFi market, MakerDAO [MKR] consistently showed its resilience and growth potential. In particular, MakerDAO appears well-positioned to benefit from the rising fascination towards interest-bearing stablecoins.
Realistic or not, here’s MKR’s market cap in BTC terms
Can MakerDAO reap the benefits of sDAI?
What sets sDAI, a stablecoin issued by MakerDAO, apart is its unique source of yield. Unlike traditional stablecoins, which often rely on staking rewards or collateralized assets, sDAI’s yield comes from the Stability fee generated within Maker Vaults and investments in real-world assets, such as US Treasuries.
Interest-bearing Stablecoin is on the rise
Currently, it only accounts for 1.5% of the total stablecoin market cap on Ethereum.
— Tom Wan (@tomwanhh) September 24, 2023
Interest-bearing stablecoins like sDAI provide users with the opportunity to maintain liquidity while seeking higher yields, akin to a traditional savings account. However, depositing funds into these accounts may come at the cost of reduced liquidity.
This surge of interest in sDAI could have a substantial positive impact on the MakerDAO protocol, further cementing its position within the DeFi landscape.
In addition to the organic interest in sDAI, MakerDAO is actively exploring opportunities to enhance its ecosystem. One noteworthy proposal suggests deploying the Spark Protocol on zkSync Era Mainnet.
This proposal outlines an ambitious plan that includes using assets like wETH, rETH, wstETH, and DAI as initial collaterals. The aim is to establish a 2 million DAI liquidity goal to jumpstart Spark’s growth on zkSync.
In case you missed it:
A new proposal has been put forth to deploy @spark_protocol on zkSync Era Mainnet.
It includes wETH, rETH, wstETH, and DAI as initial collaterals and setting a 2 million DAI liquidity goal to kickstart Spark's growth on zkSync.
— Maker (@MakerDAO) September 21, 2023
For context, Spark Protocol is a lending offering under MakerDAO’s purview, that allows users to both borrow and supply assets like ETH, stETH, DAI, and savings DAI at competitive rates.
Is your portfolio green? Check out the MKR Profit Calculator
State of MKR and DAI
While DAI, the stablecoin associated with MakerDAO, has witnessed a remarkable increase in market capitalization since August, its network growth has exhibited signs of stagnation. This suggests that, despite its financial growth, DAI may be losing some of its appeal among new users.
On the flip side, MakerDAO’s native token, MKR, experienced significant positive momentum recently. Its network growth saw a substantial spike in the past week, coinciding with a surge in its price, which climbed from $1,081 to $1,270.03.