On March 11 at 4:56 p.m. UTC, Tedros Adhanom Ghebreyesus, the director of the World Health Organization, stated that COVID-19 can be characterized as a pandemic. Industry experts consider the global uncertainty around this respiratory disease — from travel bans imposed by governments across the globe to the continuing global market turmoil — to be a trigger of the cryptocurrency market’s painful crash.
Most cryptocurrencies saw their biggest 24-hour price drops in a single 24-hour period. The strong downward trend started off around 6:00 a.m. UTC on March 12 and continued until the morning of March 13. Ether (ETH) took a huge 33% hit of roughly $60 by 1:30 p.m., plunging 46.6% overall within these two days. EOS (EOS) covered almost the same numbers, losing 42.42% of its value. The charts of both cryptocurrencies’ price movements are remarkably similar.
The continued market fall had an obvious impact on the decentralized finance sector, which commonly relies on overcollateralized digital assets to back the value of new currency. The ensuing barrage of liquidated undercollateralized assets embraced DeFi protocols and even touched its risk-averse investors. These circumstances became a proper stress test for the biggest industry’s projects, revealing their weaknesses as well as their strengths.
Related: DeFi Can Now Choose to Run Trustless Zero-Knowledge Proofs
Here is an analysis of what happened to MakerDAO (MKR), the biggest DeFi project on Ethereum, and how it compares with Equilibrium EOSDT, the biggest DeFi project on EOS.
How did these two different projects weather the same storm?The perfect storm
As soon as the crypto market entered panic selloffs, the number of transactions in blockchain networks predictably increased. The Bitcoin (BTC) blockchain normally hovers around less than 0.7 transactions per second, but it was handling 5.76 transactions per second at its peak on March 13. These circumstances easily cau...