How MakerDAO showed resilience in the wake of Curve Finance attack
- DeFi market has seen a 7% drop in TVL following Curve Finance hack.
- MakerDAO registered a minor uptick in TVL.
In the aftermath of Curve Finance’s exploit, the decentralized finance (DeFi) vertical of the crypto ecosystem has experienced a 7% downturn in total value locked (TVL), despite managing to avert a widespread contagion effect, per data from DefiLlama.
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At press time, DeFi TVL held across multiple chains stood at $45.98 billion. For context, the top five DeFi protocols by TVL all experienced a decline in the last week, with Aave [AAVE] logging the highest TVL drop (16%). This was due to the protocol’s significant exposure caused by Curve’s founder Michael Egorov’s loans on its platform.
Interestingly, while others recorded declines, MakerDAO [MKR] saw a TVL uptick, albeit minute.
Primus inter pares?
According to DefILlama data, MakerDAO’s TVL grew by 1% in the last week. As liquidity providers rallied for safety by removing their funds from Curve and Aave, they sought solace in MakerDAO as the protocol recorded a huge surge in its wrapped staked Ether tokens deposits (wsETH) within the last seven days.
MakerDAO revealed that new deposits in its wsTETH-A and wsTETH-B vaults totaled $8.08 million and $21.86 million, respectively, 24 hours after Curve was hacked. This made wsTETH the primary collateral within the protocol’s crypto vaults.
WSTETH has surpassed WETH as the leading crypto collateral in terms of USD value locked within the Maker Protocol.
WSTETH – $2 billion deposited.
WETH – $1.98 billion deposited.
— Maker (@MakerDAO) August 1, 2023
Also, previously displaced by Aave for several weeks, MakerDAO once again reclaimed its position as the second-largest DeFi protocol by TVL, following Lido Finance. This was due to a significant decline in Aave’s TVL in the last week.
However, despite the surge in collateral deposits and a minor rally in TVL, DAI’s supply plummeted in the last week, data from Maker Burn showed. When the stablecoin’s supply declines, it means that there are fewer DAI tokens in circulation. This is often caused by decreased demand for DAI in trading or lending markets.
Also, the protocol’s revenue remained flat within the period under review, per data from Maker Burn.
Read Maker’s [MKR] Price Prediction 2023-2024
MKR continues to excel
At press time, MKR exchanged hands at $1,245.18, seeing a mere 1.07% price decline in the last week. On a D1 chart, token accumulation remained fairly healthy. At the time of writing, the Relative Strength Index (RSI) was positioned above the 50-center line at 61.95.
Likewise, its Money Flow Index (MFI) was pegged at 58.51. This signaled that traders accumulated the alt more than they distributed it. Also, MKR’s price traded above the middle band of its Bollinger Bands at the time of writing, suggesting that buying pressure exceeded selling pressure.