Whales and Fresh Wallets Boosting Maker (MKR) Demand
On-chain data shows that there are whales and new wallets that are accumulating more Maker (MKR), which is supporting the token and driving up demand. In September, MKR was among the top-performing tokens, surging around 120% in the three months since hitting its lows in June 2023.
Currently, MKR is changing hands for over $1,300 and is slowly approaching its peak prices from July 2023. It is noteworthy that MKR has risen by 14% in the past trading week, pushing its market capitalization to over $1.27 billion, with a 36% increase in trading volume on the last day.
One whale, identified as "0xad0," purchased 1,261 MKR worth $1.62 million at an average price of $1,290 during the last trading week. Additionally, whale and fresh wallet activities have intensified compared to the previous week, with the token experiencing a higher price as accumulation grows.
Parallel data from Lookonchain confirms this trend, particularly since the beginning of September. At the start of this month, one whale sold $1.13 million of Ethereum and acquired the same amount of MKR on Binance.
This transaction occurred one day after another entity transferred 12.3 million MKR from Binance. However, while whales appear to be loading up on MKR, Vitalik Buterin, the co-founder of Ethereum, sold his MKR holdings for ETH on September 2.
Maker Finance is a decentralized lending and borrowing platform on Ethereum. As of September 20, the protocol had a Total Value Locked (TVL) of over $4.8 billion, according to DeFiLlama. Further data shows that the platform held $109.56 million worth of MKR, its native token, and $49.58 million worth of other stablecoins.
MakerDAO, a decentralized autonomous organization (DAO), manages DAI, an algorithmic stablecoin that distributes yields to holders. MKR token holders can also vote on proposals. After briefly unpegging from USDC in March 2023, the DAO reduced its reliance on the centralized fiat-backed stablecoin. In early August, the community also voted to temporarily increase the DAI Savings Rate (DSR) from 3.19% to 8% to incentivize users to mint DAI through the Spark protocol.
In addition to changes in the DSR, MakerDAO introduced an improved Smart-Burn mechanism that allows Collateralized Debt Positions (CDPs) to be closed to secure circulating DAI without causing a shortage of stablecoins in the market. Under this new arrangement, MKR in circulation would be bought and burned independent of CDP closures, making the protocol more flexible in response to market changes. However, each burn reduces the circulating supply, which supports the prices, as shown by the price development.
Overall, the accumulation of MKR by whales and fresh wallets, along with the implementation of new protocols by MakerDAO, has sparked increased demand for the token and contributed to its recent price surge.
