MakerDAO: Defi’s Most Influential Lending Protocols Rallys 85% in Last 30 Days! But is ‘Maker’ a Solid Investment Right Now?

brian jung chief editor

October 19, 2022

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October 19, 2022

Disclaimer

What Is MakerDAO

MakerDAO is a cooperative organization that manages the Maker protocol. As one of the most valuable and widely used platforms in DeFi, investors and crypto users are closely watching how Maker's governance and operating model evolve.

Since the launch of Ethereum back in 2015, hundreds of decentralized applications have developed on the platform. By far the most popular are dApps for lending, borrowing, and exchanging tokens, as these services can be executed without intermediaries such as banks or credit verification companies. The Maker Protocol was part of the vanguard of DeFi.

The Ongoing Debate

MakerDAO however, is in the middle of a makeover, and the debate between supporters of prioritizing decentralization versus boosting growth touches on a fundamental quandary for cryptocurrency protocols.

"Currently, MakerDAO is wrestling with the trade-offs between growing the protocol or hardening it against regulatory risks,”

The note, written by Porter Smith, partner at a16z, argues for changes that would improve decentralization without hindering growth and that are consistent with the current legal and regulatory environment. These include improving the current system, which is based on core units, rather than breaking the protocol's governance structure into smaller units called MetaDAOs.

"The Core Unit structure is arguably already legally decentralized," Smith wrote. "Introducing MetaDAOs is unlikely to change that analysis or lead to more organizational stability from a purely legal perspective."

The memo said a16z would "support experimentation through smaller, self-contained proposals to provide a basis for how the proposed changes might (or might not) work in practice"

"Perhaps experimenting with a MetaDAO (or one per type), iterating, and then rolling out an organizational change with real data and live experience could strike a balance here," Smith wrote in a comment on the forum.

MKR holders have two proposals to vote on for how MakerDAO's structure could be revamped, including spinning off administrative units of the protocol and turning them into MetaDAOs. As we go to press, polls show that about 90% of voters support creating MetaDAOs at the expense of the core units.

Rune Christensen unveiled an ambitious roadmap for the future of MakerDAO in May, which he called the Endgame Plan, to make the protocol truly decentralized and resistant to possible encroachment and censorship by governments. His plan included free-floating DAIs and removing centralized assets from reserves that could theoretically be blacklisted or seized.

In the short term, however, MakerDAO contributors focused on growth and voted to include real assets, such as $500 million in government bonds, in the Protocol's reserves to generate revenue from earnings and incentivize MKR and DAI holders to attract new users.

Tensions between rival factions in the Protocol's leadership date back at least to this summer, when investors and founders clashed in a vote on the Protocol's credit oversight unit.

Should you invest $1,000 in MKR?

Before you considerMKR, you'll want to hear this.

MakerDAO, a crypto lender, is one of the pioneers of decentralized finance (DeFi). Getting a massive amount of support from top crypto exchanges, such as Binance, and has built a massive community around their technology, MKR is here to stay. 2022 has not been the best year for MKR, but the sudden rally seems to be great news for supporters and holders of the coin.

We always recommend our readers to do their own research.

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Maker (MKR) price analysis

MKR was launched in 2017 with one million tokens at a price of $24.45 and has come a long way while experiencing several ups and downs. It crossed the $1,000 mark before the end of 2017 and continued climbing during the first month of 2018, reaching over $1,500.

Maker reached a high of $1,773.92 on January 2018. However, the coin failed to reach the previous high and fell drastically to $503.57 on April 2018.

During the rest of 2018, 2019, and 2020, the value of the maker token remained levelled, but the coin managed to reverse its trend in 2021. MKR rose to an ATH of $6,339.02 on May 3, 2021.

The notion that the more MKR a holder owns, the greater their voting power assisted boost sentiment. The community rebuilt trust in the token as it gave them the ability to manage the DAI stablecoin. As a result, the value of MKR coins also continued to rise.

However, in 2022, MKR entered a downward market. It crashed during the year, falling below the $1,000 mark by the end of June.

MKR peaked at $747 on September 29, 2022, after Coinbase confirmed its instructional rewards programme. In the following month, the price continued to rise and broke through the psychological barrier of $1,000.

At the time of writing on October 18, 2022, Maker was trading at $1,092, up 10% in the last seven days and 60% in the last month.

This price increase also follows news that MakerDAO was the most used smart contract among the top 500 ETH, according to a Twitter account that tracks whales.

How To Start Trading MakerDAO?

• Your going to need a trading-wallet.You can use any recommended Crypto exchange, but not all exchanges will list this particular coin. Click the link below to register with our recommended exchange. Alternatively, you can open an account with a defi-wallet like Metamask or Trust Wallet, and make your trade from there.

  Register with our broker here

• Adding Funds.If you already have Bitcoin, Ethereum or BNB or any other major cryptocurrency, you can easily transfer your coins to your trading account within your wallet. If you do not own crypto-currency, you can purchase it by clicking on the ADD FUNDS button within the exchange, and purchase your cryptocurrency with Credit Cards, Debit Cards or even Apple Pay.

• Buying the asset.Typically, this should be quite straight forward if you are using an exchange. Click on the “trade” tab and find the trading pair in Spot trading. If your using a defi-wallet, connect to pancakeswap (https://pancakeswap.finance/) or uniswap ( https://uniswap.org/) to swap tokens within your defi-wallet.

• Selling Your Asset.Made some profit and ready to sell and pull some profits? With major exchange platforms this operation is quite simple. Head back to the Trade tab in the exchange where you first purchased the coin (typically spot-trading) and click on sell. Enter the amount you want to sell at the price you want it. Once the Token price reaches your quote, the exchange will automatically sell your coins for the trading pair you chose.