Maker has gained 53.5% over the past month, and the cryptocurrency witnessed a remarkable 28.1% surge between July 15 and July 22, achieving its highest daily close in nearly a year. While the gains are impressive, the real question is: Can the cryptocurrency sustain its current trajectory, or were short-term factors behind the price pump?
MakerDAO, the decentralized autonomous organization (DAO) responsible for the Dai (DAI) stablecoin and the governance token Maker (MKR), unveiled a five-phase roadmap in mid-May. Dubbed “Endgame,” the upgrade plan includes a new blockchain, a rebrand and the introduction of two tokens featuring updated functionalities.
Rune Christensen, co-founder of MarkerDAO, revealed that the primary component of “Endgame” entails developing incentive programs for interactions and governance participation based on a new chain bridged to the Ethereum network. Essentially, users will have the capacity to initiate hard forks in response to power attacks or abuse.
Ascribing the recent rally solely to these proposed changes seems simplistic, given that Maker’s price remained stable for 30 days after the announcement. Consequently, investors seeking to understand MKR’s movement must delve deeper to identify the precise triggers behind the price surge.
Venture capital funds unload MKR
According to crypto markets and decentralized finance analyst Nay, Paradigm Capital likely divested a significant portion of its MKR investments in March. Furthermore, A16z, another major venture capital firm that previously invested in Maker, has been reducing its position over recent weeks.
2/ The last two US-based VCs have capitulated.
Paradigm unloaded their bags 4 months ago, and a16z is in the process of liquidating right now. Interestingly, they’re even using the same desk to execute. Total disbelief.
Polychain and Dragonfly offloaded all their $MKR years ago pic.twitter.com/DdsHs6gxzd
— Nay (@nay_gmy) July 15, 2023
While determining whether their sell pressure is abating proves challenging, one of the most significant risks for Maker has always been secondary token sales to venture capitalists from April 2019, at an average price below $250, amounting to 170,000 MKR.
According to Nay, Polychain and Dragonfly had also previously divested their positions, lending credibility to the rally based on the anticipation of other venture capitalists following suit.
Simultaneously,…
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