After the collapse of Terra (LUNA) last week, it has suddenly increased by up to 100 percent. Maker’s (MKR) Whale activity was also reported to increase.
by Santiment provided The Maker token, which traded with over 35 percent increase from last week and hit 100 percent gains at one point, has seen an increase in the activity of major wallets on the network, according to on-chain data.
The Maker blockchain, MKR, has seen massive gains following Terra’s one of the biggest dips in recent times in the crypto world, and it recently witnessed the biggest-ever surge in whale activity. The massive increase in transactions exceeding $100,000 also triggered a price increase of 21 percent (currently 35 percent) from last week. Key stakeholders currently own the majority of the MKR supply.
🐳 #Maker has seen major whale activity these past couple days, and its largest spike in $100k+ transactions has propelled the asset +21% in the past week and another +18% in just the past day. Key owner moment #AllTimeHigh of $MKR supply. https://t.co/l8wd61JT2b pic.twitter.com/Ua2gkAw48I
— Santiment (@santimentfeed) May 14, 2022
As reported by KoinFinans, following the Terra debacle, on May 11, MKR broke a record with a 100 percent increase in price in less than 24 hours. However, due to the high selling pressure in the market, the price of the cryptocurrency fell and lost all its growth within a few hours.
Why did the price of Maker suddenly rise so high?
Since there has been no fundamental update or news provided by the developers recently, we can conclude that the 35 percent growth of the token compared to last week is purely speculative and may also be due to the collapse of the Terra ecosystem.
Maker, an Ethereum-based ecosystem that allows the issuance of MakerDAO and the DAI stablecoin Maker ProtocolIt is the governance token of . While users holding their funds in the UST stablecoin seek alternative solutions like Maker, the token’s function could be key to Terra’s massive development in its absence from DeFi.
Maker is a platform for controlling DAI stablecoins, a community-managed decentralized stablecoin softly pegged to the US dollar. The stable coin is pegged to the dollar through the use of cryptocurrency-based collateral deposited in a smart contract.
Maker’s recent price surge and volatility in whale trading seem to be evidence that investors prefer the security of DAI over the holding risk of UST. Maker, an Ethereum-based DeFi protocol, allows investors to print collateralized stablecoin DAI. The platform also allows users to lock a range of cryptos such as Bitcoin, Ethereum, or liquidity positions in other protocols such as Curve to mint DAI stablecoins.
Terra’s native cryptocurrency LUNA suffered a major crash after LFG’s plans to raise $1 billion in funding for the UST stablecoin failed. Maker price on the other hand, it made a price action where it spiked above $2000 for a moment.
The price has since pulled back and MKR is trading around $1556, up about 35 percent from last week and up 5 percent from the last 24 hours. This spike appears to be the result of Terra’s investors jumping into Maker as the LUNA price drops below $1.
UST and DAIare known as two stablecoins that are always in an inverse correlation. MKR has gained popularity during the current market downturn as DAI currently has safer investments than its other two competitors. The fact that MakerDAO has a more effective risk framework for managing stability has also proven to the community that it is more committed than Terra.
You can check the price movements here.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, KoinFinans and the author of this content cannot be held responsible for personal investment decisions.