Chainlink MakerDAO integration can solve DAI liquidity crisis


A potential Chainlink MakerDAO integration can work wonders for embattled Dai. Its appeal increases manifold in the investor’s eyes. The recent decline in DAI liquidity can bring Chainlink in the MakerDAO environment as collateral. Such collaboration can boost the Dai supply and subsequently increase its stability credentials as well.

Chainlink MakerDAO integration can also lead to an increased demand for LINK token. As more recommendations pour in to integrate Chainlink with MakerDAO, LINK’s price will certainly make a leap upwards.

Chainlink MakerDAO integration can rain liquidity

DAI is experiencing a crisis of sorts. It is trading dangerously above its peg ratio, and the current price levels pose a threat to MakerDAO. As MakerDAO stability concerns arise, the entire DeFi is gradually shifting towards other stablecoins, including Ampleforth and Terra. If this continues, Dai liquidity can take a severe hit across prominent exchanges.

To put things in perspective, the last ten days are a grim reminder of how DAI stability has been undermined. CDP holders are paying more than the peg to sell and exit. This is a massive negative for Dai in general. If this trend accelerates, the whole of the DeFi can destabilize in no time. Large scale collateral liquidation can cause widespread closures.

On March 12, the crypto market experienced the carnage of unprecedented scale. Collaterals worth millions were going under the hammer for zero dollars. Additionally, MKR price saw a 58%  drop in a single day, and the MakerDAO balance sheet was looking at a wide hole.

LINK liquidity can shore up DAI prospects

The Chainlink MakerDAO integration is, therefore, in everyone’s interest. Given the market cap of Chainlink, speculative trading can push the prices reasonably quickly. This can change the liquidity scenario overnight. LINK can further contribute more liquidity to the platform and improve its stability credentials.

Maker community will, of course, have the final say in Chainlink MakerDAO integration. Considering the experience with Aave, the prospects are looking great for this stability-boosting integration.

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Gurpreet Thind

Gurpreet Thind is pursuing Masters in Electrical Engineering at University of Ottawa. His scholarly interests include IT, computer languages and cryptocurrencies. With a special interest in blockchain powered architectures, he seeks to explore the societal impact of digital currencies as finance of the future. He is passionate about learning new languages, cultures and social media.

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