Crypto Price Today: Maker (MKR) and AAE surge 9%: What’s behind the rally?

Crypto Price Today: Maker (MKR) and AAE surge 9%: What's behind the rally?

Today, July 4, 2023, two of the most popular decentralized finance (DeFi) tokens, Maker (MKR) and AAE, have surged by 9 % in the past 24 hours, according to CoinMarketCap. Considering the overall bearish sentiment in the crypto market, this is a remarkable performance. What are the reasons behind this rally, and what are the implications for the DeFi sector?

MKR was trading at $986.3 up 9.60% in 24 hours, while AAE was trading at $75.03

Maker (MKR): The leader of DeFi

Maker (MKR) is the governance token of the MakerDAO platform, which allows users to borrow stablecoins (DAI) by locking up their crypto assets as collateral. MakerDAO is the largest DeFi platform in terms of total value locked (TVL), with over $8 billion worth of assets as of today. Maker (MKR) holders have the power to vote on various parameters of the platform, such as interest rates, collateral types, and risk management.

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Maker (MKR) has been on a strong uptrend since June 28, when it broke out of a descending triangle pattern that had been forming since May. The breakout was accompanied by a significant increase in trading volume and social media activity. Some of the factors that contributed to this bullish momentum include:

  • The launch of Optimism Dai Bridge, a layer-2 scaling solution that enables fast and cheap transfers of DAI between Ethereum and Optimism.
  • The announcement of MakerDAO’s partnership with dYdX, a leading decentralized derivatives exchange, to integrate DAI as a collateral option for margin trading.
  • The integration of MakerDAO’s DAI Savings Rate (DSR) with Compound, a major DeFi lending platform, allowing users to earn interest on their DAI deposits.

AAE: The rising star of DeFi

AAE is the native token of Aave, a DeFi protocol that enables users to lend and borrow various crypto assets with variable or fixed interest rates. Aave is the second-largest DeFi platform in terms of TVL, with over $7 billion worth of assets as of today. AAE holders can stake their tokens to earn rewards and participate in the governance of the protocol.

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AAE has also been on a strong uptrend since June 28, when it bounced off a key support level at $200. The rebound was driven by a high demand for AAE tokens, as evidenced by the rising number of active addresses and transactions. Some of the factors that boosted this demand include:

  • The launch of Aave Pro, a permissioned pool for institutional investors, which is expected to bring more liquidity and adoption to the protocol.
  • The announcement of Aave’s collaboration with Polygon, a layer-2 scaling solution, to offer lower gas fees and faster transactions for DeFi users.
  • The introduction of Aave’s liquidity mining program, which rewards users with AAE tokens for providing liquidity to the protocol.

Conclusion

Maker (MKR) and AAE are two of the most prominent DeFi tokens that have outperformed the crypto market in the past week. Both tokens have benefited from positive developments in their respective platforms, as well as from the growing interest and adoption of DeFi among users and investors. As DeFi continues to innovate and expand its use cases, Maker (MKR) and AAE may have more room to grow in the future.