The rapidly evolving realm of decentralized finance (DeFi) has brought a new level of utility and value to the cryptocurrency ecosystem in 2021 but has also provided nefarious actors with numerous exploits in siphoning profits and tokens away from unsuspecting investors.
In the past few days, KeeperDAO (ROOK), a DeFi protocol that allows participants to trade, borrow and stake assets with protection from miner value extracted (MEV) bots that front-run transactions, has rallied 118%.
Data from TradingView shows that since trading at a low of $124.70 on Oct. 12, the price of ROOK has rallied 118% to a daily high at $298 as its 24-hour trading volume spiked from an average of $7 to $24 million.
The reasons for the surging price of ROOK include the roll-out of community governance features, an increasing total value locked on the protocol and the possibility of a new token buyback mechanism that could help to reduce the circulating supply of ROOK.
Governance features back the current rally
Governance features have been growing in prominence across the cryptocurrency ecosystem over time as community control is seen as one of the main features of a truly decentralized network that is not under the control of one small group or entity.
As part of its evolution toward a fully functioning DeFi protocol, KeeperDAO introduced its new governance voting structure on Oct. 4 with the release of two KeeperDAO improvement proposals (KIPs), which established the simple format for writing KIP’s and chose the first group of community Sophons to contribute to the community's growth.
Both proposals passed without objection on Oct. 11, which allowed the KeeperDAO community to begin putting its treasury to work earning a yield for the ecosystem.
ROOK's treasury and total value locked surge
Another reason for ROOK's increasing momentum is the protocol's growing treasury, which is now back near its all-time highs established during the market run-up in May.
According to data from Dune Analytics, the total value of the KeeperDAO treasury currently sits at $122.2 million, while the total value of assets locked on the protocol now stands at $390 million.
Investors bought the bottom and the community showed up
Another reason for the building strength of ROOK is the ongoing governance votes, which are focused on reducing the circulating supply of ROOK, cutting back emissions to stakers and funding development through the end of 2021.
KPI-2 aims to decrease the emission rate of ROOK, which would effectively lower the number of tokens minted in each cycle. KPI-4 is a proposal to use some of the protocol’s ‘Ninja’ profits to buy back ROOK from the open market and burn them.
At the current rate, this would translate into $800,000 worth of ROOK tokens being burned monthly, which would help lower the circulating supply and theoretically increase the price of the remaining tokens.
KPI-3 proposes additional funding for individual contributors who help with the development and growth of KeeperDAO.
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