Maker’s (MKR) price has jumped nearly 50% in the last few hours on speculation over replacing Terra’s dominance in DeFi. The DeFi token behind the DAI stablecoin seems to be benefitting from the fall of its competitor Terra’s UST.
MakerDAO is has proven to be more stable than Terra thanks to having a more effective risk framework for managing stability. Its decentralized risk management is coordinated by the first risk team, a template model team, the internal risk team of the Maker Foundation.
Maker May Dominate DeFi As Terra Falls
Maker’s price jump in the last 24 hours indicates investors prefer DAI’s safety against UST’s risk of holding. Maker, an Ethereum-based DeFi protocol, lets investors mint the collateralized stablecoin DAI. It allows users to lock up a range of crypto such as Bitcoin, Ethereum, or liquidity positions on other protocols such as Curve to mint DAI stablecoins.
With Terra’s LUNA falling more than 90% in the last 24 hours after the LFG’s plans to raise $1 billion in funding for the UST stablecoin failed, Maker (MKR) price skyrocketed above $2000 momentarily. The price has since retreated and is currently trading 30% higher at around $1500. The spike appears to be a result of Terra’s investors jumping into Maker as LUNA price sinks below $1.
Moreover, the de-peg of UST stablecoin has led to DAI becoming the fourth-largest stablecoin by market cap. Previously, Maker’s DAI stablecoin had lost significant market share to UST stablecoin. Terra’s founder Do Kwon also claimed the death of DAI stablecoin with the increased popularity of UST.
