• Maker (MKR) crypto price jumped on Thursday as investors cheered the rising demand for the Dai stablecoin.
• Demand for Dai is increasing due to Spark Protocol, a DeFi protocol which offers higher rates of return and allows users to borrow Dai against their collateral.
• The MKR price has recovered from its recent dip and is now close to its key resistance level of $1,150.
Maker (MKR) Price Regains Momentum
Maker’s MKR token price has seen a strong recovery in the past few days due to increased demand for its Dai stablecoin. On Thursday, MKR reached a high of $1,100 after dropping to $978 last Friday. This coincided with tech stocks making a comeback following Nvidia’s earnings announcement.
Growing Demand for Dai
MakerDAO is one of the largest players in the blockchain industry with over $5.12 billion locked in total value (TVL). It is known for the Dai stablecoin which is currently ranked 12th among all cryptocurrencies and 3rd among all stablecoins in terms of market capitalization. In recent weeks, there has been an increase in demand for Dai due to Spark Protocol – a rival to AAVE that was launched by MakerDAO several months ago.
Spark Protocol Benefits
Spark Protocol allows users to earn returns simply by depositing cryptocurrencies such as ETH and Dai into their accounts. It also enables people to borrow Dai against their collateral and swap other coins without incurring any slippage costs. Depositors are currently earning returns of up 8%. Spark’s total value locked has grown significantly and now stands at over $578 million.
Challenges Facing MakerDAO
The interest rates offered by money market funds have risen recently due to Federal Reserve rate hikes, so they are now offering better returns than DeFi protocols like MakerDAO or AAVE can offer, creating challenges for these platforms..
MKR Price Forecast
Looking at the 4H chart shows that MKR dropped sharply last week before recovering back above the 50% Fibonacci Retracement level towards its key resistance level at $1,150 . Therefore it appears likely that buyers will target this level asthe coin continues its upwards momentum .