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Why are MakerDAO traders watching Bitcoin’s price action?

2min Read

MakerDAO witnesses massive amounts of interest in DAI due to whale behavior. The revenue generated by the protocol sees growth due to the success of RWAs.

Why are MakerDAO traders watching Bitcoin's price action?

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  • Whales bought DAI while trying to accumulate BTC.
  • MakerDAO witnessed a spike in revenue. 

With rising interest from institutional players like BlackRock, Bitcoin [BTC] has garnered substantial attention from whales. However, it seems that DAI, the stablecoin created by MakerDAO [MKR], may emerge as a beneficiary of this growing interest in BTC.


Realistic or not, here’s MakerDAO’s market cap in BTC’s terms


DAI’ng to buy Bitcoin

According to Santiment’s data, traders have been closely monitoring the price range of $30k to $31k for Bitcoin, with many large investors observing this movement.

These traders were swiftly accumulating stablecoins such as DAI at press time, possibly in an attempt to accumulate more BTC.

It remains to be seen whether these whales will continue to buy more BTC. However, in the process, DAI may benefit greatly from the whales’ bullish sentiment.

Source: Santiment

At press time, DAI’s marketcap rested at $4.5 billion after declining materially over the last week. In terms of velocity, there was growth observed by the stablecoin, indicating an increased frequency of DAI transactions.

Source: Santiment

The popularity of DAI may improve the state of MakerDAO as well. According to Token Terminal, the revenue generated by MakerDAO had grown by 41.5% over the last month.

MakerDAO embraces the real world

Apart from DAI’s popularity, one of the major contributors to MakerDAO’s rising revenue would be the Real-World Assets (RWA) being held by the protocol.

Since May, the Maker Protocol experienced a rise in the percentage of fees generated by RWAs, increasing from 72.6% in April to 79.7%. Throughout the year so far, this particular portfolio has contributed 78.5% of the total fees.

The growth in Maker’s RWA balance during May can be attributed to the deployment of additional DAI from the Monetalis Clydesdale vault.

For the uninitiated, the Monetalis Clydesdale vault witnessed a significant increase in its debt, expanding from 500 million DAI to approximately 1.14 million DAI. In May alone, the vault successfully drew an additional 560 million DAI.

Soure: MakerDAO

Of the vault’s assets, 33% are allocated to 0–1 year treasury ETFs (IB01), 14% to 1-3 year treasury ETFs (IBTA), and the remaining 53% is invested in a 0-6 month Treasury ladder.

Other vaults such as BlockTower Credit and Fortunafi also contributed massively to MakerDAO’s growth.


Is your portfolio green? Check out the MKR Profit Calculator


State of MKR

MKR, however, did not see the same level of growth. The token, in the past month, has declined significantly along with its volume.

Source: Santiment

At press time, MKR was trading at $879.19.

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Himalay is a full-time journalist at AMBCrypto. A Computer Science graduate, Himalay writes about crypto with a special focus on the latest coin-based updates. He is a fan of gonzo journalism, transgressive fiction, heavy metal, and Manchester United.
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