VC giants like Paradigm, Dragonfly, and a16z are selling massive amounts of MKR out of goodwill. These sales will help the altcoin project become more decentralized. So, is it bad news for MKR investors?
VC giants start sales of MKR for support purposes
VC giants are dumping MakerDAO’s MKR token balances this week. This scenario will put downward pressure on the altcoin price. But on the other hand, it is a big plus for the protocol to be more decentralized and for future price movements.
On August 1, Analysts from Menya Research reported that a16z has finally sold all of its MakerDAO balance. In addition, VC firms such as Paradigm and Dragonfly also depleted their MKR reserves.
The three venture giants collectively held about 11.5% of the MKR supply at one point, according to Menya analysts. A16z purchased $15 million, or 6% of the MKR supply, at an average price of $250 in September 2018. Paradigm and Dragonfly raised $27.5 million, or 5.5% of the supply, at an average price of $500 in December 2019.
Companies made high profits from their altcoin positions
The A16z has been selling for an average of $1,800 since March 2021. Earned 7.2x on its initial investment. Last month, he “sent his remaining 32,000 MKR to exchanges to aggressively sell.”
Paradigm and Dragonfly also sell in batches and have profited greatly from their purchases.
3/ dragonfly was the first to start selling its clip in Jan'21, but the bulk of the sales came in Apr'21, as MKR approached its $6k top
results: avg sale price of $3.8k / $MKR, 7.6x its initial investment, stellar performance and good discipline selling on pumps pic.twitter.com/PfT5SKsVHC
— 0xRamen (@0xRamenUmai) August 1, 2023
Huge altcoin purchases by companies have always been a concern over the market. The management voting systems of many projects, such as Uniswap, have been completely taken over by the big VC whales. Also, VCs often buy their altcoins at huge discounts in private sales and sometimes sell their bags to individual investors. So how will the sales of these companies affect altcoin investors?
MKR price and game plan: what awaits altcoin investors?
MakerDAO is now aggressively investing in traditional financial assets as part of its Endgame Plan. Specifically, he focused on US government bonds and treasuries this year.
Meanwhile, MKR price is up 8% on the day to trade at $1,318 at the time of this writing. The DeFi altcoin had a solid month, gaining 45% over the past 30 days. However, it continues to trade at a discount of around 80% from the ATH level of $6,292 in May 2021. However, now that venture capitalists have emptied their bags, the project is more decentralized and price action has bounced back with the bulls.
As Kriptokoin.com, we reported that a16z deposited a large amount of MKR on the exchanges over the weekend. The transfers came at a time when the MKR price was on the rise. In this article, we have included details about the Endgame vision that drives companies to sell.
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