Mark is the crypto of Benchmark Protocol: it is a token on Ethereum, and not an actual cryptocurrency.
The price trend of the crypto Mark
It was launched in the crypto markets in November 2020, which is just before the great bullrun of 2021 was triggered. In fact, within just two months its price went from $0.2 in December to $4.2 in February, a gain of 2,000%.
Then, however, the price stabilized for a while around $1.5, until in March 2022 it began to fall to $0.4 in June.
However, it is now back around $1.6, which is in line with the 2021 price.
Right now compared to the anomalous peak in February 2021 it is down 62%, but precisely this was only a brief anomalous peak that lasted a couple of weeks in early February.
It is very interesting that after the annual low in June, when the crypto markets were in deep crisis, it has already managed to recover the average price of 2021.
This is not to be confused with another token, also called MARK, which belonged to the Plato Farm project and practically failed. In fact, this eponymous token, born in March this year, after peaking in late March has since lost 99% of its value.
The market capitalization of the crypto Mark
Returning to Benchmark Protocol’s MARK token, it is a DeFi protocol created to mitigate liquidation events in decentralized crypto markets. The token itself serves to hedge risk through elastic bidding. In fact, it is meant to be an alternative stablecoin that links traditional capital markets to DeFi.
This is precisely why its value over the medium to long term seems quite stable, and it has quickly returned to 2021 levels.
This is best understood by analyzing its market cap.
In November 2020 it was about $400,000, while now it is about $600,000. But in the intervening months, it had risen a great deal, only to fall back to its initial levels.
As early as December 2020 it had risen to $2 million, and then exploded in early 2021 thanks to the explosion of circulating supply, combined with the price increase.
By February 2021 it had risen to 28 million, and then hit 45 million in May. The curious thing is that while from February to May 2021 the price fell, its market capitalization increased, thanks precisely to the flexible supply.
By June 2021, the capitalization had fallen to 14 million, and then dropped to 3 million at the end of the year.
Over the course of 2022, despite a relatively stable price, it fell again to $200,000 in June, before returning just above its starting levels.
These dynamics give a good idea of how variable its supply can be, and how that variability serves precisely to try to keep the MARK token price close to $1.
Benchmark Protocol also uses another token, xMark, which is minted by those staking MARK tokens within the platform. These xMARK tokens are not subject to rebase, whereas the share of MARK tokens they represent is.
In other words, the number of MARK tokens represented by each xMARK token is variable, and consists of a ratio that changes daily with each rebase.
xMARK was created to allow MARK to be exposed on different blockchains, and for platforms that do not support rebase mechanisms. xMARK tokens can be converted back to MARK tokens at any time.
Benchmark Protocol in detail
Benchmark Protocol is a rebase protocol built on the Chainlink Keeper network. Its MARK token provides an elastic, non-dilutive alternative to stablecoins, and connects users to DeFi.
The protocol dynamically adjusts the MARK supply based on deviations from the target metric of 1 unit of special drawing rights (SDR). The use of SDRs as a benchmark serves to create broader use cases rather than a single fiat currency exposure.
SDRs (Special Drawing Rights) are foreign currency reserve assets maintained by the International Monetary Fund (IMF). Their value is variable, so much so that during 2022 it hit an all-time low, partly due to the significant strength of the US dollar.
All this serves to give the MARK token a stable value, but one that is different from that of US dollar-based stablecoins. This allows it to have a global currency risk profile, as opposed to the single currency risk profile of stablecoins pegged to individual fiat currencies.
Therefore, it is no coincidence that from 2021 to 2022 its market value went from an average of $1.5 to $1.6, that is, with a percentage increase similar to that of inflation in the US.
However, it is worth mentioning that this is still a very young project, which has not yet had time to prove that it is stable and solid in the long run.