Why Maker (MKR) Is Up 6% Today
KEY POINTS
- MKR's surge most likely has to do with the fall of UST and LUNA, the coin's biggest competitors.
- In the absence of competition, MKR and DAI have proved themselves as the safer bet, and could continue to see many investors jumping on board with them.
MKR sees gains in the defeat of LUNA and UST. Is the rivalry over?
After the catastrophic de-pegging of the Terra-based LUNA and UST cryptocurrencies, MKR, the backing cryptocurrency of DAI, is seeing decent gains. Because of the competition between UST and DAI, the collapse of UST's value stands to propel both MKR and DAI forward as reliable coins that proved themselves capable of holding their value when the competition could not. Will another dollar-pegged coin emerge to fill the void left by UST or will DAI stay top dog?
Competition in retrospect
Despite bold statements by Terra blockchain founder Do Kwon, who claimed that DAI would be defeated by his own hand, UST did not outlast its competitor. For a long time, the two coins both vied for supremacy, with UST generally being considered the riskier option of the two. These projections were clearly accurate as DAI now persists, while UST sits well below its desired dollar peg. The two digital currencies that backed these competitors, MKR and LUNA, are both heavily affected by this competition and its outcome. In the wake of UST's major fall, LUNA dropped below a value of $0.01, while MKR continues to rise unhindered by any adversary. Investors who favored the safe bet in this rivalry were certainly given what they paid for.
MKR and DAI in the future
Where UST falls, DAI keeps its dollar peg, proving itself as the more stable option of the two in the long run. MKR and DAI are closely connected, meaning that a change for one could have big impacts for the other. If no other dollar-pegged coins emerge to compete with MKR and DAI as UST and LUNA did before, these two coins could see a major boost in desire as more and more people begin investing in cryptocurrency. These coins may have just proven themselves to be able to withstand the constantly shifting landscape of the crypto market. As it stands, MKR is in a league of its own, standing on the top pedestal as its biggest competitor falls off the stage. The possibilities for these tokens could be limitless.
The bottom line
MKR is rising in a turbulent time for cryptocurrencies around the world. This is most likely in response to the major fall of the UST and LUNA cryptocurrencies, which were MKR and DAI's most prominent competition in the market. MKR and DAI have proven themselves to be a safe bet compared to the competition, and many investors who have been burned by their UST or LUNA investments could opt for a more stable option in MKR and DAI. In the absence of UST and a lack of competition, MKR and DAI could be experiencing the beginning of a whole new wave of investment.
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Our Research Expert
Katie Clinebell is a freelance content creator and digital marketing strategist for FinTech, blockchain, and crypto brands. She has created award-winning campaigns for Snapple and Tai Pei Frozen Asian Food and received an Adobe Academic Achievement Award for content about Olympic athletes.
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