MakerDAO’s (MKR) posted positive moves today even as the broader market saw a slight correction. While top coins painted charts red with bearish moves, MKR added over 3% in the last 24 hours, bringing its price to $1,139.92 at 9:25 am EST. This bullish momentum coming amid a bear market trend suggests that special factors might be behind it.
Maker (MKR) Soars Amid New Governance Proposals
Maker made the top gainers’ list on Wednesday, July 26, closely behind Compound (COMP) with 3.18% 24-hour price growth and XDC Network with an over 16% seven-day gain.
Maker’s price saw a boost due to increased ecosystem activities as the Maker Governance votes to approve or reject the new Spark Protocol changes commence.
This vote was a result of Phoenix Labs’ proposed key adjustments to Spark Protocol DAI market parameters to enhance user experience.
Among Phoenix Labs’ recommendations is the adjustment Wrapped Ether (WETH) Variable Rate Slope from 1% to 3%. This adjustment is touted to encourage a healthy utilization of the DAI market, enhancing supplier return and incentivizing deposits.
It also proposed to set the DAI market loan-to-value and liquidation threshold (LTV/LT) to 0.01% and adjust the WETH market reserve factor to 5%. The adjustments will reduce the protocol fee on the ETH market and give suppliers a larger APY.
If approved, the proposed changes will raise Spark D3M’s debt ceiling to 200 million DAI and set DAI Market LTV/LT to zero. Given the potential benefits these changes could provide DAI borrowers, market activity would increase, boosting MKR’s demand as the Maker protocol utility token.
The voting started on July 24 and has attracted much attention from Maker community members. Maker’s trading activity has increased as community members hurry to participate in the poll before the deadline on Thursday, July 27.
Moreover, as the governance token of the Maker protocol and MakerDAO, the ongoing poll has increased trading activity and demand for MKR. The increased MKR trading volume confirms this assumption.
Whale Alerts Draw More Investor Attention To Maker
As of July 26—9:25 EST, MKR’s trading volume stood at $121.71 million, an over 47% rise from the previous day’s value, according to CoinMarketCap data. MKR traded at a high of $1,172.12 and a low of $1,118.93 over the past 24 hours.
Lookonchain also observed a significant exchange inflow and outflow on July 25. According to the on-chain sleuth, a whale dumped 1,598 MKR, worth approximately $1.8 million, after amassing chunks of tokens since June 22, when prices were below $1,000.
The whale withdrew 2,760 MKR, approximately $2.5 million, from Binance from July 7 to July 17 at an average value of $918 per token and discharged them when the price increased.
While the whale effect pushed MKR’s price down 2%, it also reflected the massive investor interest in the token and drew more attention to MKR. As such, the token soared higher in the days following the transaction and continued bullish with the governance vote. This demonstrates the high demand for the token given that it soaked up the supply from the whale without issue.