Following Ether and Wrapped BTC woes, the governing body of the Maker Protocol MakerDAO has experienced a significant 86% drop in its revenue according to the latest report.
Its net income loss is the first since 2020 consequent upon the drastic fall in loan demand and liquidations. The woes of the DAO project is compounded by the high cost of expenses.
The information disclosed by Jonny, the Messari analyst and co-author of ”The State of Maker Q3 2022,” reveals that the decentralized autonomous organization had its revenue reduced by almost $4 million in just quarter 3.
He further pointed that some of the major causes include drastic reduction in loan demand and incessant liquidations. The situation was exacerbated by the poor performance of its two biggest earners, Ether (ETH) and Wrapped Bitcoin (wBTC). While Ether-based assets have fallen by 74%, BTC-based assets have reduced by 66%.
Usually, borrowers often use the two cryptocurrencies as collateral for loans of the Dai (DAI) stablecoin, which helps to stand in for security against volatility often prevalent within cryptocurrency markets.
In the same vein, MakerDAO also experienced a fall in its collateral ratio from 1.9 to 1.1 percent within the period under review.
Meanwhile, the decentralized project is not letting loose its relevance. It recently declared the intent of investing $500 million in treasuries and bonds so as to provide the protocol with low-risk additional yield while increasing the return on assets.
On a positive note, it recorded growth in Real World Asset (RWA) backed loans after successfully offering its biggest RWA-backed loan to Huntingdon Valley Bank (HVB) in the third quarter of 2022.
Support for Blockchain Projects
In a bid to address the plight of developers especially in the distressed mining industry due to crypto winter, Binance has announced a lending facility for bitcoin (BTC) miners.
The world’s leading cryptocurrency exchange is set to devote $500 million for the private and public miners. This sort of support should be extended to struggling DeFi protocol projects.
There is no mincing word that crypto winter has taken a toll on several cryptocurrencies and projects.
