Journalist
Posted:
- MakerDAO’s Spark Protocol saw a lot of progress.
- The total supply of DAI fell as the price of MKR fell.
Despite market uncertainty, the MakerDAO remains [MKR] protocol continues to grow. One of the many reasons for the protocol’s growth is the success of the money market protocol.
Spark plays a key role
Spark Protocol is a money market protocol focused on DAI. It brings together MakerDAO’s liquidity and vertically integrates with a leading DeFi protocol.
Recent data shows that Spark Protocol leads the lending market, with more than $629 million in active loans, representing approximately 10% of the lending market.
.@spark_protocol_ has dominated the credit market over the past month.
Over $629 million in active loans and ~10% of the lending market. 🤯 pic.twitter.com/pU6z0LDBfi
— Emperor Osmo🧪 (@Flowslikeosmo) November 26, 2023
Spark Protocol’s recent dominance of the credit market, especially with its focus on DAI, will likely have a notable impact on MakerDAO and DAI.
With so many active loans, Spark has about 10% of the lending market, potentially shifting the dynamics in favor of alternative lending platforms. Users looking for diverse options may find the Spark Protocol attractive because of its unique combination of liquidity sources.
The DAI supply is decreasing
DAI supply, which was around 5.6 billion at the end of October, fell to around 5.3 billion at the time of writing. People seem to be moving away from holding balances in the DSR, possibly looking for better returns in other stablecoins.
What is the current state of the traditional financial and crypto markets?
What @MakerDAO exposures are important to monitor?
This thread highlights key findings from the November issue @BlokAnalitica‘s research product ‘Market conditions and competitive analysis’.
1/19
🧵⬇️ pic.twitter.com/oqTKCr9DUd
— Block Analitica (@BlockAnalitica) November 21, 2023
Some options include credit markets with higher interest rates and positions on a perp and futures basis.
Source: Makerburn
Although ETH and wstETH vaults have seen steady use, total ETH debt has increased due to more lending from Spark. The WBTC core vaults have also grown from 76 million to 86 million in total DAI exposure.
As the supply of DAI decreases and more people turn to volatile assets, liquidity ratios for stablecoins are falling. PSM and Coinbase Custody balances now make up 11.4% of circulating DAI, up from 18.8% last month.
Is your portfolio green? look at the MKR profit calculator
This could be a concern, and Maker may have to take action such as adjusting interest rates or withdrawing funds if liquidity levels continue to decline.
Context: Maker dashboard
At the time of writing, MKR was trading at $1,459.76. Its price had dropped -0.59% in the last 24 hours. MKR’s network growth had also declined. This showed that new addresses showed no interest in MKR.
Source: Santiment
