- While demand for DAI is falling, Maker’s TVL has not experienced significant growth since March.
- MKR has seen more distribution than accumulation in the past month.
After its replacement by Lido Finance [LDO] as the largest total value locked decentralized finance (DeFi) protocol (TVL) at the start of the year, MakerDAO’s [MKR] TVL continues to drop, data from Defillama showed.
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According to information from data analytics platform DeFi, Maker’s TVL fell 9% over the past month. Lido, on the other hand, registered a TVL growth of 4% during the same period.
In addition, Lido’s TVL crossed the $10 billion mark in March and has been on an upward trend ever since. At the time of writing, Lido’s TVL was $11.99 billion, while Maker’s was $7.11 billion, growing just 17% over the past five months.
Shapella helped Lido, while DAI depeg Maker suffered
When Ethereum’s highly anticipated Shanghai Upgrade went live on April 12, Lido experienced a wave of liquid staking activity, driving the TVL up.
While other staking platforms allowed instant withdrawals after the implementation of Shapella, Lido did not, leading more ETH deposits to the liquid staking platform.
Per data from Dune analysisSince Shapella, Lido-staked ETH has grown 9%. Similarly, the TVL is up 5% since then.
Source: Dune analysis
On the other hand, Maker’s TVL suffered a downturn and as a result stagnated due to the momentary dough its DAI stablecoin suffered in March due to the unexpected collapse of Silicon Valley Bank, which transitioned into USDC temporarily losing its parity with the dollar.
Although DAI regained its peg, supply has been on a downward trend ever since. Since then, DAI supply has fallen by 25%, according to data from Maker burn.
When the DAI supply falls, there are fewer DAI tokens in circulation, which may be due to a drop in demand.
Source: Maker Burn
A drop in DAI demand means less demand for borrowing the stablecoin, which in turn impacts Maker’s TVL. This means that there has been a decrease in the amount of collateral locked into Maker’s smart contracts, causing the TVL to experience a growth lag.
MKR’s story of decline over the past month
Trading at $653.16 at the time of going to press, the price of MKR posted a double-digit decline over the past 30 days, according to data from CoinMarketCap.
Source: CoinMarketCap
On-chain data from Sanitation revealed that the altcoin also took a hit to its network activity during that period.
The number of daily active addresses trading MKR in the past month fell by 43%. Similarly, new demand for the alt fell as the number of new addresses created daily to trade MKR fell by 32%.
Source: Sentiment
How much are 1,10,100 MKRs worth today?
A look at the token’s exchange activity revealed a spate of selloffs over the past month. According to data from Santiment, MKR’s on-exchange supply has grown steadily over the past 30 days, while off-exchange supply has fallen.
This meant that more investors were sending their MKR holdings to exchanges to sell, driving the alt’s value down.
Source: Sentiment
