Recently, Bitcoin.com News reported how the market valuation of stablecoin tethers and encrypted assets jumped by more than 1,500% in just over 500 days. In addition to this exponential growth, the market value of the decentralized stablecoin DAI has also expanded significantly, as the market valuation of DAI has jumped by more than 800% in the past 12 months, from US$696 million to US$6.3 billion today .
Since September 2020, Makerdao’s stablecoin has risen by 800%
As of Saturday, September 18, 2021, the value of stablecoins is approximately 127.29 billion U.S. dollars, and their current trading volume accounts for today’s 62 billion U.S. dollars. There is no doubt that stablecoins have become huge in the past three years. News media and research reports often mention the massive growth of Tether (USDT).
The thing about Tether (USDT) is that when it comes to the operation of stablecoin projects, someone is giving orders. On the other hand, the stablecoin DAI is operated by the Makerdao project, which is a decentralized autonomous organization (DAO). The minting of the DAI stablecoin is certainly supported, but it is based on participants adding value to the service and over-collateralizing.
According to the Makerdao website, DAI helps financial freedom “without volatility” by providing “a price-stable currency that you can control”. The website stated that users can read the white paper to understand its working principle and generate DAI according to their own conditions.
In the past 12 months, the overall DAI supply has increased significantly, with a jump of 808.90% since September 18, 2020. At that time, the market value of DAI was only US$696 million, but today it exceeds US$6.3 billion.
Coingecko’s stable currency by market value shows that DAI is the fourth largest stable currency by market value today. DAI lags behind Tether ($69.5B), USDC ($29.4B) and BUSD ($12.8B). The circulating supply of BUSD accounts for more than half of the total supply of DAI.
Monthly data shows that the market value of decentralized stablecoins has increased by more than 10%
On Saturday, DAI saw approximately US$279 million in 24-hour global swap transactions. Records show that today there are more than 400 decentralized applications (dapps) and centralized exchanges using the DAI stablecoin. DAI is heavily used in decentralized finance (defi) in liquidity pools, swaps, and crypto lending applications.
The DAI and Makerdao agreement is not without controversy. In April 2019, the stablecoin tried to maintain its $1 peg. The Dai token itself is very dependent on too much collateral. If the price of Ether suddenly plummets, then DAI holders may not have collateral within a certain price range.
However, after the Black Swan event occurred on March 12, 2020 (also known as “Black Thursday”), Makerdao developers had to develop new ideas, such as using tokens other than Ethereum as collateral to offset the risk . Unfortunately, for those users who want to be compensated for their under-collateralized investments, the management voted not to repay these users.
This decision eventually led to a class action lawsuit against the creators of the Makerdao project. At the same time, the Makerdao community continues to grow, and the issuance of the DAI stablecoin continues to grow. In the past 30 days, the valuation of the DAI stablecoin has increased by 10.3%.
What do you think of the DAI stablecoin growing by more than 800% in one year? Please tell us your thoughts on this project in the comments section below.
Image Source: Shutterstock, Pixabay, Wiki Commons, Coingecko
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