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- MakerDAO’s Spark protocol has come a long way.
- As the price of MKR fell, the overall supply of DAI also decreased.
Despite market uncertainty, the MakerDAO (MKR) protocol has continued to grow. One of the many reasons for the growth of the protocol was the success of the money market protocol.
Spark plays an important role
Spark Protocol is a money market protocol focused on DAI. Integrates liquidity from MakerDAO and vertically integrates with leading DeFi protocols.
According to recent data, Spark Protocol leads the lending market, accounting for approximately 10% of the lending market, with over $629 million in active loans.
.@spark_protocol_ It has dominated the loan market over the past month.
Active loan volume is more than $629 million, or approximately 10% of the lending market. 🤯 pic.twitter.com/pU6z0LDBfi
— Emperor Osmo🧪 (@Flowslikeosmo) November 26, 2023
Spark Protocol’s dominance in the lending market, especially around DAI, will likely impact MakerDAO and DAI in notable ways.
With so many active loans, Spark has about 10% of the lending market, potentially changing the dynamics in favor of alternative lending platforms. Users looking for a variety of options may find the Spark protocol attractive due to its unique combination of liquidity sources.
DAI supply decreases
DAI supply, which was approximately 5.6 billion at the end of October, has decreased to approximately 5.3 billion as of press time. People seem to be moving away from holding balances in DSR and looking for better returns in other stablecoins.
What is the current state of traditional finance and cryptocurrency markets?
what @MakerDAO Is it important to monitor exposure?
This thread highlights key findings from the November issue. @BlockAnaliticaThis is a research product of “Market Situation and Competitive Analysis”.
1/19
🧵⬇️ pic.twitter.com/oqTKCr9DUd
— Block Analitica (@BlockAnalitica) November 21, 2023
Some options include lending markets with higher interest rates and perpetual and futures-based positions.
Source: Makerburn
While ETH and wstETH vaults have been in steady use, Spark’s increased borrowing has increased total ETH debt. The total DAI exposure of WBTC core vaults also increased from 76 million to 86 million.
As DAI supply decreases and more people move to volatile assets, stablecoins are seeing lower liquidity ratios. PSM and Coinbase custody balances now account for 11.4% of circulating DAI, down from 18.8% last month.
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This can be problematic, and if liquidity levels fall further, Maker may need to take action such as adjusting borrowing rates or withdrawing funds.
Context: Maker Dashboard
At press time, MKR was trading at $1,459.76. Its price fell as follows: -0.59% in the last 24 hours. MKR’s network growth also declined. This indicates that the new address is not interested in MKR.
Source: Santiment