MakerDAO has a new proposal to make some parameter changes. The protocol has displaced Lido to regain its position as the leading DeFi protocol.

In a new proposal, the Open Market Committee of the MakerDAO governance team is seeking community approval to make some parameter changes to the operation of the decentralized finance protocol (DeFi) in light of recent events in the lending vertical of the DeFi ecosystem.

Read MakerDAOs [MKR] Price forecast 2023-2024

Under the proposal, due to the general decline in liquidity for smaller assets and Avi Eisenberg’s market manipulations that led to the siphoning of $114 million from decentralized crypto exchange (DEX) Mango Markets, fewer long-term assets are now accepted as collateral in the crypto lending world.

Long-tail assets are cryptocurrencies that have been in circulation for several months or years but have low or no trading volume. Instead of throwing away these crypto assets, DeFi protocols use pools to use them, generating liquidity in this asset class.

Under the new proposal, it is proposed to reactivate MakerDAO’s Aave-DAI Direct Deposit Module (Aave D3M) with a limited debt ceiling, and Compound v2 D3M’s debt ceiling would be increased.

Stability costs for the protocol’s WSTETH-B vault type would also be normalized. In addition, fees on the USDP PSM would be increased to avoid an increase in exposure.

According to the Open Market Committee, these changes, if implemented, are expected to result in an annual revenue increase of approximately DAI 525,000 and an increase in COMP rewards for the Compound D3M’s Maker Treasury.

MakerDAO regains position as the DeFi king

Lido Finance, a top liquid ETH staking platform, briefly overtook MakerDAO as the highest total value locked (TVL) DeFi protocol at the start of the year. Over the past week, this caused a significant increase in the value of Lido’s governance token LDO.

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However, as of this writing, per data from DeFiLlamaMaker has regained its position as the leading DeFi protocol with a TVL of $6.27 billion. So far this year, MakerDAO’s TVL has grown 4%.

Source: DeFiLlama

The protocol’s governance token MKR has also shown some price appreciation. At press time at $558.98, the value is up 10% since the start of the year, data from CoinMarketCap shows.

The price growth is due to a steady increase in MKR accumulation since the beginning of the year. An assessment of MKR’s price movements on a daily chart revealed that the alt’s Relative Strength Index (RSI) and Money Flow Index (MFI) have been in an upward trend since January 3.

At the time of writing, they were spotted above their neutral lines at 53.29 and 61.15 respectively.

Source: TradingView

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