Ethereum’s MakerDAO is Down 55% Against ETH in 2020 Despite DeFi Boom
Ethereum’s MakerDAO has long been the flagship protocol of the entire DeFi industry. Offering the famous DAI stablecoin and a platform for one to obtain decentralized loans, the protocol now locks in excess of $1 billion worth of cryptocurrency.
That makes it the most important protocol to DeFi by far, especially since it offers the stablecoin that underlies many applications, DAI.
Despite MakerDAO’s importance and growth, its native token Maker (MKR) has not performed well against Ethereum in the past year. Cryptocurrency researcher Hasu commented on the asset’s performance:
Chart of the ratio between MKR tokens and ETH since the start of the year (Bitfinex data) from TradingView.com
MKR’s underperformance is seemingly a byproduct of a collapse in earnings they are entitled to, Hasu speculated:
As of this article’s writing, Maker trades for $603 or 1.54 Ethereum. The cryptocurrency has a market capitalization of around $600 million as well.
Still Too Highly Valued?
Some say that MKR is undervalued because it is literally the backbone of DeFi. A cryptocurrency analyst team found earlier this year, though, that the Ethereum-based asset may be overvalued.
The team from the firm AlfaBlok found that MKR’s then valuation of $350 million “implies very aggressive growth rates, of over 70%+ Dai circulation increase per year reaching Trilions of Dai in circulation, in order for current valuation to make sense.”
Featured Image from Shutterstock Price tags: ethusd, ethbtc Charts from TradingView.com Ethereum DeFi's Flagship Coin, MakerDAO, Is Down 55% Against ETH in 2020
Originally from Bitcoinist.com https://ift.tt/2PoxQPj
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