- DAI supply has steadily increased since the beginning of the year.
- MakerDAO saw a decline in fees and revenue in December.
The supply of MakerDAO’s (MKR) stablecoin DAI hit a four-month low on December 31, 2023, before making a surprising rebound in the first week of 2024. Maker Bun showed it
The supply of DAI was found to have plummeted to a low of 5.22 billion DAI on December 31, 2023. The last time it fell to that low was in September.
This decline is due to a sideways movement in the price of Ethereum (ETH) as 2023 draws to a close due to expectations of the approval of a spot ETF at the time.
The decrease in DAI supply was caused by the Collateralized Debt Position (CDP) model of DeFi protocols. MakerDAO CDP allows users to generate DAI using cryptocurrencies such as ETH as collateral. Users deposit cryptocurrency assets as collateral and receive DAI in return.
The MakerDAO CDP model maintains the value of the DAI stablecoin at $1 through interest rate incentives. An automated system will raise or lower the interest rate to encourage DAI creation or burning.
This mechanism effectively manages DAI supply reduction due to cryptocurrency price declines, keeping it close to the target price.
Anticipation of the recent ETF approval has increased the supply of DAI during a year that has seen the value of ETH rise so far. At $5.29 billion at press time, DAI’s supply is up nearly 2% from its December 31 low.
Source: MakerBurn
User activity soared, but fees and revenue fell.
Despite a decrease in DAI supply in December, MakerDAO saw an increase in user activity.
Source of data token terminal The protocol recorded 2,775 monthly users over 31 days, a 55% increase over the 1,837 monthly users recorded in November.
However, despite the surge in user numbers, fees totaled $15 million, down 48% from $28 million last November. Likewise, protocol revenue also fell 48% over the same period, AMBCrypto found.
Source: Token Terminal
Realistic or not, the market cap of MKR in BTC terms is:
Among these, MakerDAO recorded a 3.24% gain in total value locked (TVL).
According to data from DefiLlama, the protocol’s TVL was $8.83 billion at press time, making it the second-largest DeFi protocol in terms of TVL, with TVL ranking behind Lido Finance (LDO) at $24.33 billion.