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Maker’s MKR Token Surges 30% and Stablecoin DAI Leapfrogs UST

While Maker's token MKR surged, its stablecoin DAI also became the fourth largest stablecoin by market cap due to UST's crash.

2 min read
MakerDAO

Maker’s governance token MKR spiked more than 30% overnight, and its stablecoin DAI also benefited from the continued meltdown of Terra’s UST stablecoin, which slipped as low as $0.30 in the early hours of Wednesday morning. 

MKR currently trades for $1,664 dollars a token, a price increase of a little over 35% in the last 24 hours, according to CoinMarketCap

Maker’s token is used to govern MakerDAO, a decentralized autonomous organization, and Maker Protocol, a software platform; both allow for the creation and management of Maker’s algorithmically dollar-pegged DAI stablecoin, which has now leapfrogged UST as the fourth-largest stablecoin by market cap.

Maker rises as Terra falls

Terra’s algorithmic stablecoin TerraUSD (UST) is in the throes of a dramatic price crash. On Monday, the price fell from its dollar peg and continued its precipitous collapse on Tuesday.

On Tuesday, the Luna Foundation Guard (LFG), a non-profit supporting all things Terra (LUNA), voted to lend $1.5 billion in crypto to protect its native UST’s peg. The effort failed to stem the tide, with UST crashing even harder overnight; at 8:45 AM UTC today it bottomed out at $0.2998.

The price of LUNA, the currency which Terra burns a dollar’s worth for every new UST minted, is also crashing hard. At its current price of $2.20, LUNA has lost over 90% of its value overnight. 

It currently remains uncertain what measures will be taken to re-peg UST, but Terra CEO Do Kwon addressed a nine-tweet thread for concerned Terra supporters. He wrote: “the only path forward will be to absorb the stablecoin supply that wants to exit before $UST can start to repeg. There is no way around it.”

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

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