If you are a follower of the stablecoin market, you may have noticed a significant increase in DAI activity on Ethereum over the past few days.
On April 17 and April 18, DAI conducted on-chain transfers of over $50 billion, with the $86 billion volume on April 17 being the highest ever for a stablecoin.
This was a sharp rise from the less than $10 billion in activity seen earlier this month.
But we’ve talked about DAI before in the context of growing on-chain volume. From December 2022 to October 2023, it was more common to see DAI activity of up to $5 billion per day, but as stablecoins are increasingly used in complex MEV transactions, DAI trading volume is starting to increase.
Chart courtesy of The Block Pro
MEV activity appears to be the main driver of the surge here as well. Let’s take a transaction as an example. 0x447. In this transaction, just under $200 million worth of DAI was minted, transferred to Aave, taken out of Aave, transferred to a Maker Flash contract, and then burned, resulting in nearly $1 billion worth of DAI volume in a single transaction.
that much flash mint Maker’s module allows users to mint DAI (up to a certain limit) on the condition that they repay it all within the same transaction and provide a small fee. This module has become very popular because it allows arbitrageurs and MEV bots to access a lot of money without spending a lot of money.
Here’s another example of one of these transactions: 0x160, this was done by the same MEV bot, 0x5ed…a9f. While watching activity From these addresses, we can see that they actually participated in 254 and 256 transactions respectively between April 17th and 18th, up from the daily transaction high of 63 set in early April.
According to EigenPhi, a MEV data tracking tool, the bot made Both days were under $20,000, but despite the bot’s activity slowing down, it actually made over $20,000 on April 19th.
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