MakerDAO’s [MKR] progress stuck in the mud months after Lido’s [LDO] rise

• As demand for DAI falls, Maker’s TVL has seen no significant growth since March.
• MKR has seen increased distribution than accumulation in the last month.

Following its replacement by Lido Finance [LDO] as the decentralized finance (DeFi) protocol with the largest total value locked (TVL) at the beginning of the year, MakerDAO’s [MKR] TVL continues to plummet, data from DefiLlama showed. 

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According to information from the DeFi data analytics platform, Maker’s TVL declined by 9% in the last month. Lido, on the other hand, registered a 4% TVL growth during the same period.

In addition, Lido’s TVL crossed the $10 billion mark in March and has since remained on an uptrend. At press time, Lido’s TVL was $11.99 billion, while Maker’s was $7.11 billion, growing by a mere 17% in the past five months. 

Shapella helped Lido, while DAI-depeg caused Maker to suffer

As the much-anticipated Ethereum’s Shanghai Upgrade went live on 12 April, Lido experienced a surge in liquid staking activity, causing its TVL to climb.

While other staking platforms immediately enabled withdrawals upon Shapella’s implementation, Lido did not, driving in more ETH deposits to the liquid staking platform.

Per data from Dune Analytics, since Shapella, Lido-staked ETH has grown by 9%. Likewise, its TVL has since increased by 5%. 

Source: Dune Analytics

On the other hand, Maker’s TVL suffered a decline and consequently stagnated due to the momentary depeg its DAI stablecoin suffered in March due to the unexpected collapse of Silicon Valley Bank, which cascaded into USDC temporarily losing its parity to the dollar.

Even though DAI regained its peg, its supply trended downward since then. Since then, DAI’s supply fell by 25%, per data from Maker Burn.

When DAI supply drops, there are fewer DAI tokens in circulation, which could result from a decline in demand.

Source: Maker Burn

A decline in DAI demand means that there is less demand for borrowing the stablecoin, which in turn affects Maker’s TVL. This means that there has been a decrease in the amount of collateral locked in Maker’s smart contracts, causing its TVL to experience stunted growth. 

MKR’s story of decline in the past month

Trading at $653.16 at press time, MKR’s price posted a double-digit decline in the last 30 days, according to data from CoinMarketCap.

Source: CoinMarketCap

On-chain data from Santiment revealed that the altcoin also suffered a blow to its network activity during that period.

The count of daily active addresses that traded MKR in the last month fell by 43%. Likewise, new demand for the alt dropped as the count of new addresses created daily to trade MKR fell by 32%.

Source: Santiment

How much are 1,10,100 MKRs worth today?

A look at the token’s exchange activity revealed a surge in sell-offs in the last month. According to data from Santiment, MKR’s supply on exchanges grew steadily in the last 30 days, while its supply outside exchanges fell.

This meant more investors sent their MKR holdings to exchanges to sell them, causing a decline in the alt’s value. 

Source: Santiment