Analyzing MakerDAO's chances of growth amid these factors

Fees generated on the MakerDAO protocol have surged over the last few months.
The Spark Protocol generated high interest from users.

Despite conceding the top position in the DeFi sector in terms of TVL to Lido [LDO], the growth on the MakerDAO [MKR] protocol was not hindered at the time of writing.

Realistic or not, here’s MKR’s market cap in BTC’s terms

Is growth Fee-asible?

According to data analyst Patrick, the fees generated on the MakerDao protocol surged materially since April. Over the last 24 hours alone, the fees generated on the protocol amounted to $302,068.

MakerDAO weekly fees have had quite the run-up since April 👀 pic.twitter.com/mTGRkFym70
— Patrick | Dynamo DeFi (@Dynamo_Patrick) July 24, 2023

The surge in fees collected on the MakerDAO protocol could be partly attributed to the surge in interest in MakerDAO’s stablecoin, DAI. MakerDAO’s recent data indicated that Spark Protocol’s DAI borrowing has achieved a new all-time high, surpassing 10 million DAI and standing at 14.4 million DAI at press time.

Source: MakerDAO

MakerDAO refuses to lose the Spark

New updates on the Spark protocol could further increase interest in both DAI and Spark Protocol.

Maker Governance votes to approve or reject the new Spark Protocol changes.
To enhance the user experience of Spark Protocol, @phoenixlabsdev has presented key adjustments to Spark Protocol’s parameters.
The Maker community’s votes will decide on the following changes.
↓ pic.twitter.com/KK0MnI55tl
— Maker (@MakerDAO) July 24, 2023

The suggestions put forward for Spark Protocol involved making specific adjustments to enhance its functionality. One proposal was to increase the current D3M Debt Ceiling to 200 million DAI.

By raising the ceiling to 200 million DAI, Spark would allow for an additional 180 million DAI to be borrowed at a predictable rate. This change aims to streamline the onboarding process for new users, making it easier for them to access credit through the platform.

Another proposed change was to set the DAI market Loan to Value (LTV) and Liquidation Threshold (LT) to 0.01%. The LTV ratio represents the percentage of the asset’s value that can be borrowed against its collateral.

On the other hand, LT indicates the point at which the asset’s position becomes eligible for liquidation. By adjusting both values to 0.01%, DAI would no longer serve as collateral within the protocol.

Additionally, the proposal involved setting the WETH market Reserve Factor to 5%. The Reserve Factor represents the percentage of interest earned by suppliers in the asset market. By reducing the Reserve Factor to 5%, the protocol fee taken on the ETH market would fall.

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This would result in higher Annual Percentage Yields (APYs) for suppliers. This change was aimed at incentivizing users to provide more WETH to the market. It would also help in increasing liquidity and participation within the ecosystem.