Paxos, the company that issues Stablecoins, has come forward with a new proposal in which it suggests the payout of monthly marketing fees to MakerDAO, the top decentralized finance (DeFi) protocol, to boost the use of its Pax dollar (USDP) inside the Maker ecosphere and raise the USDP ceiling to 1.5 billion USDP.
Paxos wanted the USDP Peg Stability Module (PSM) on MakerDao to be increased from its present value of $450 million to $1.5 billion, as stated in the proposal. The PSM is an element of the MakerDAO system that assists in keeping the price of the DAI stablecoin, which is tied to the value of the U.S. dollar.
The proposal (1) said that if this debt cap was raised,
"the complete USDP PSM will be able to produce up to $29M in yearly income for MakerDAO."
Boosting the debt cap for DAI's USDP would assist in lowering the company's exposure to USDC and increasing the amount of income that may be generated. At the time, USDC produced around 40% of new DAI and collateralized approximately 30% of existing DAI. As a result, the plan characterized this step as an efficient and risk-free strategy to lessen DAI's reliance on USDC.
MKR Token Sees a Steady Rise
As of the time of writing, the MakerDAO native token MKR has a market value of $709.90. According to statistics provided by CoinMarketCap (2), the value of the alternative currency has increased by 41% since the beginning of the year.
The market capitalization has been on a steady increase as well. It was $ 694 Million when we saw the data at CoinMarketCap. (2)
Since the beginning of the year, MKR has observed an increase in the accumulation. When the performance of the alt was analyzed using a daily chart, it was shown that buyers had been in control of the market since the 7th of January.
After taking a look at the Directional Movement Index (DMI), it was established that this was the point in time when the Positive Directional Indicator and the Negative Directional Indicator intersected in an uptrend.
A price increase is shown when an asset's positive DMI (indicated in green) climbs higher than the negative DMI (marked in red). This suggests that the crypto asset's value is trending upward and that there has been more movement in the positive direction than in the negative one.
A check at the Average Directional Index (ADX) showed that the strength of the buyers was one that MKR sellers would find difficult to reverse in the short run. This is especially true given the current market environment. This (yellow) was sitting at 50 at the time of the press.
Lastly, important indicators like the Relative Strength Index (RSI) and Money Flow Index (MFI) were placed above their neutral zones, with respective values of 68.51 and 77.39. At the time of publication, this indicated that the purchasing momentum was picking up, and MKR was getting dangerously close to being overvalued.