Why Is Maker Cryptocurrency Skyrocketing?

Maker (MKR), the governance token of the MakerDAO and the Maker Protocol, has shot up 64.76% to emerge as the third best-performing cryptocurrency on weekly basis on CoinMarketCap’s list.

What Happened: MKR traded 32.03% higher at $3,660.78 at press time. The cryptocurrency trailed XRP (XRP) and Dogecoin (DOGE) which have rallied 67.31% and 353.77% respectively in a seven-day trailing period.

At press time, XRP traded 3.48% lower at $1.72. DOGE traded 112.46% higher at $0.27.

Earlier in the month, Maker announced a drive to make its community completely decentralized and announced key components to achieve that goal.

The three key components revolve around elected paid contributors and domain teams, maker improvement proposals, and vote delegates, according to Maker’s statement.

Why It Matters: It is noteworthy that Maker Protocol and MakerDAO manage the development of Ethereum-based stable coin DAI (DAI). 

There is increasing demand for DAI due to its use in multiple Decentralized Finance protocols like AAVE (AAVE), Compound (COMP) and Cream Finance (CREAM), Cointelegraph reported.

DAI is created by locking collateral like ETH and ChainLink (LINK) into a MakerDAO vault and generating DAI against the locked coins.

See Also: What's Going On With Chainlink Cryptocurrency?

This has, in turn, resulted in an increase in the total value locked of the Maker protocol which has a TVL of $9.31 billion at press time, according to DeFi pulse. Compound had the most TVL of $11.28 billion.

Read Next: Ethereum Classic Is No Dogecoin But It Is Getting Its Fair Share Of Love