MKR was priced at $1,068.53, up 44 percent in the last 24 hours. However, earlier in the day, near its Jan. 21, 2018, high of $ 1,798.70., it was trading at $ 1,251.14.
The recent rally was only a delayed and long-anticipated outcome of the fast growth of the DeFi market, analysts told CoinDesk. For both the decentralized lending network of Maker and the decentralized autonomous organization, MakerDAO, MKR is the governance token. The price rally is attributed to the dramatically raised supply of dai, MakerDAO’s native stablecoin, by Yan Liberman, co-founder of Delphi Digital, a research and consulting boutique specialized in digital assets.
As coindesk.com reported, when Ethereum blockchain users deposit one of several assets into the Maker Protocol and borrow in the form of dai against that asset, Dai is created. On the other hand, the MKR grants its holders the right to vote on the development of the Maker Protocol and dai.
Notably, according to data gathered by DeFi Pulse, the DeFi sector is gaining recognition again with more than $21.6 billion in overall valuation locked as of press time.
According to Ryan Watkins, a research analyst at Messari, the fundamentals of the token have improved over the past year, relative to the white-hot “DeFi summer” of last year when the price of MKR remained “dormant”
“In the beginning, MKR wasn’t generating any revenue from [dai’s growing demand] because the interest it charged on users borrowing dai into existence was 0%,” Watkins told CoinDesk. “But later in the summer and early fall, Maker was able to raise interest rates, which led to MKR generating a lot of revenue.”