Effects of MakerDAO’s Decision Against Aave on the DeFi Network

The cryptocurrency market continues to see massive blows as bears control price actions. The ongoing market-wide distress has DeFi’s TVL slumping by 55% since April ended. Moreover, the total value locked recorded a significant fall this month. While publishing this content, it hovered at $75 billion, losing 10% within the past day. However, one platform seems to have suffered the most.

Drowning Ship

Aave Protocol saw the most hit within the previous day among the top five decentralized finance networks in TVL. The platform suffered a 41% decline within a month, with current TVL standing at $5.64 billion, ranking 2nd in the DeFi networks.

Bitcoin Revolution is a crypto trading tool for investing in the crypto market with an %88 average win rate on trades and is the #1 trading software for crypto traders from all around the globe in 2022. Try it For FREE Today. 

That meant struggles in Aave prices, with a new retracement taking the altcoin below the $58 level. June 6 sessions saw the altcoin breaking past the critical resistance mark at $104 before proceeding towards the $11 high amidst intraday trading. Nevertheless, a price fall followed within no time, driving AAVE 21% lower from the acquired gains.

Surprisingly, AAVE investors knew about the slump as they indulged in profit-booking when the altcoin completed its 52% upswing on June 11, selling AAVE worth around $17 million. Such development opened a downside journey for the alternative coin. The graph confirms such narratives. Meanwhile, volume transactions remained low without excitement on the platform, thus deteriorating investor sentiment.

What Happened

Meanwhile, the protocol could not present anything to record a recovery. Furthermore, MakerDAO suspended the ability of Aave to generate DAI without collateral. That saw risks of Celsius liquidity catastrophe looming larger within the crypto world, making this worse.

MakerDAO suspending the module means Aave failing to generate DAI freely. That would allow it to pay existing debts only. The platform will execute the change on June 17. Furthermore, the more exposed Aave to further risks because of its deployments in several chains.

On the other side, bears flourish in the broad crypto spectrum. While publishing this blog, the overall crypto market capitalization stood at $845.15 billion, following a 6.92% decline over the past day. Also, Bitcoin remains weak at $20K and might slide below the level today.

start trading

Best Forex World is not responsible for the content, accuracy, quality, advertising, products or any other content posted on the site. Some of the content on this site (not all) is paid content that is not written by our authors and the views expressed do not reflect the views of this website. Any disputes you may have with brands or companies mentioned in our content will need to be taken care of directly with the specific brands and companies. The responsibility of our readers who may click links in our content and ultimately sign up for that product or service is their own. Cryptocurrencies, NFTs and Crypto Tokens are all a high-risk asset, investing in them can lead to losses. Readers should do their own research before taking any action.

Tesla Previous post Tesla Investors Get Ready as Its Stocks Are About to Dip in Value
stocks Next post Stocks Record their Biggest Weekly Loss since 2020