Maker (MKR), the governance token of decentralized finance (DeFi) lender MakerDAO, jumped more than 10% Thursday, defying slumping cryptocurrency prices as the platform has returned to profitability after adjusting its lending rates. According to CoinDesk price data, MKR is the best performing digital asset above $100 million market capitalization, vastly outperforming the broader crypto market proxy CoinDesk Market Index’s (CMI) 3.5% decline.
Kunal Goel, senior research analyst at Messari, explained in an interview that MakerDAO’s fundamentals have improved recently due to the platform’s increased revenues from investing its vast stablecoin reserves in real-world assets such as U.S. government bonds and lending to banks to capture higher yields in traditional finance as part of a major overhaul called “Endgame.” The platform had earlier this month temporarily hiked rewards for DAI holders to as much as 8%, but the payouts erased Maker’s profit expectations. After lowering rewards and raising borrowing rates, MakerDAO has been profitable again.
MKR holders are benefiting from the platform’s profits via Maker’s token buyback scheme introduced last month, which reduces outstanding supply on the market using surplus revenues of the platform’s treasury. Additionally, the Maker-adjacent lending platform Spark has seen growth, nearing an all-time high $700 million of total value locked (TVL) on the protocol, DefiLlama data shows. Maker founder Rune Christensen recently unveiled a proposal to roll out Spark’s SPK tokens via airdrop.