A cryptocurrency trader has managed to make around $300,000 in a single month shorting MakerDAO’s MKR token, having borrowed 500 MKR from popular decentralized finance (DeFi) protocol Aave on July 19, to then sell the tokens for $1.37 million.
The trader, according to on-chain analysis service Lookonchain, then spent little over $1.07 million in the popular stablecoin USDC to buy back the MKR they needed to repay their debt at a lower price, effectively closing their short position on the cryptocurrency.
The trader notably closed their position as Grayscale Investments, the world’s largest cryptoasset manager and a whole-owned subsidiary of Digital Currency Group (DCG), unveiled the Grayscale MakerDAO Trust, which is designed to provide investors with direct exposure to MKR.
MKR is the utility and governance token of MakerDAO, a decentralized autonomous organization (DAO) that governs the Maker Protocol, a decentralized finance platform built on the Ethereum blockchain.
The MakerDAO ecosystem plays a crucial role in DeFi, offering an on-chain credit protocol, stablecoins, and real-world asset integration. MKR token holders participate in governance decisions for the protocol, with their influence on the protocol being proportional to their holdings.
The protocol has been seeing its annualized revenue growth partly thanks to the collateral used to back its DAI stablecoin. The protocol’s collateral now includes real-world assets (RWAs), including U.S. Treasury bills which are paying investors a 5% annual percentage yield.
Featured image via Unsplash.
