Meteoric Rise of Liquid-Staking Token-Backed Stablecoin MKUSD
In a remarkable turn of events, the cryptocurrency sector witnessed a meteoric rise as MKUSD, a novel liquid-staking token-backed stablecoin, skyrocketed an astonishing 27,000% in 30 days, captivating the attention of crypto enthusiasts worldwide.
Prisma Finance's MKUSD Emerges as a Game-Changer
Since the dawn of 2023, the stablecoin market has experienced a series of contractions due to widespread redemptions. However, enterprising ventures such as Aave's GHO, First Digital's FDUSD, and Paypal's PYUSD stepped into the arena, revitalizing the space with fresh stablecoin assets.
On September 1, the crypto community welcomed the launch of Prisma Finance, allowing users to deposit liquid staking derivative tokens in exchange for the MKUSD stablecoin. Since its inception, Prisma Finance has securely locked in an impressive USD 55 million in assets.
MKUSD Joins the USD 123 Billion Stablecoin Economy
MKUSD has emerged as a formidable player, adding its weight to the ever-expanding fiat-pegged stablecoin economy, now valued at a whopping USD 123 billion as of September 23. MKUSD, the stablecoin from the decentralized finance (DeFi) protocol Prisma Finance, officially stepped into the limelight on September 1, 2023. It is described as a "non-custodial and decentralized Ethereum liquid-staking-token (LST)-backed stablecoin."
Prisma's ingenious system allows users to deposit supported liquid staking tokens into a secure vault, and in return, borrow MKUSD. The vault maintains a collateral ratio above 120% to ensure stability, and if it falls below, liquidation becomes a possibility. In such cases, a stability pool takes over the debt, distributing collateral to providers. Supported collateral types include WSTETH, CBETH, RETH, and SFRXETH. The minted MKUSD can be seamlessly utilized on various DeFi platforms or redeemed for the coveted liquid-staking tokens (LSTs).
Spectacular Growth of Liquid-Staking Tokens
The rise of LSTs in the past two years has been spectacular, with 11.96 million Ether locked into LST platforms. At its inception, the Prisma project introduced borrowing limits in stages, and by September 15, it had successfully secured USD 30 million. As of now, data from defillama.com reveals that Prisma’s total value locked (TVL) is USD 55.16 million.
A closer look at the numbers reveals that MKUSD has a circulating supply of 29.99 million tokens, with a relatively modest 129 holders. The "Stability Pool" address commands a commanding 71.39% of the total supply, embodying the DeFi practice of maintaining stablecoin backing. The second-largest holder of MKUSD is Curve Finance, possessing 14.30% of the circulating supply.
Concentration of Ownership
In comparison to heavyweight stablecoins like USDT and USDC, MKUSD may appear smaller in scale. It trails behind newcomers FDUSD and PYUSD but stands tall above GHO, with a supply of 22,706,149. To put it in perspective, there are approximately 368,787,867 FDUSD and 44,376,440 PYUSD in circulation. Remarkably, all four stablecoins- MKUSD, FDUSD, GHO, and PYUSD- are characterized by a concentration of ownership, with the top 100 holders in each project holding sway over the majority of the supply.
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