MakerDAO, a decentralized autonomous platform within the Ethereum blockchain, has continued to see its dominance in the decentralized finance (DeFi) space drop.
Maker’s Fall in DeFi Dominance
According to data supplied by DeFi Pulse, MakerDAO is sliding towards a 50% market share in decentralized finance, compared to the 90% dominance it held in the space at the beginning of 2019. Of the total value locked into DeFi, only 56% of it belongs to crypto deposited into MakerDAO.
According to the report, MakerDAO interest rates for ether-backed Dai loans have risen from 9.2% at the start of the year to 20.5% . The effect has been to “incentivize users to close out loans and diminish Dai supply to keep the 1-to-1 peg with the dollar.” Given the falling capital deposited in Maker, it appears that the interest rate adjustment is working.
The Defiant also cites rising competition from lending platforms impacting Maker’s market share. Compound, in particular, has been beating Maker in new loan creation since the start of July. The report also indicates that Maker is trending towards third place in new loan creation for the month of August, behind Compound and dYdX.
— DeFi Pulse 🍇 (@defipulse) August 21, 2019
Defiant’s report speculates that the implementation of multi-collateral Dai could boost MakerDAO’s market share once again, if the platform decides to allow for the use of multiple tokens as collateral instead of just ETH.