Bitcoin.com News recently covered the stablecoin tether and how its market value increased by more than 1,500% in less than 500 days. In addition to this exponential increase, the market capitalization of the decentralized stablecoin DAI has swollen dramatically, with DAI’s market valuation expanding by more than 800 percent in the last 12 months, from $696 million to $6.3 billion today.
All about Stablecoin
Stablecoins were worth roughly $127.29 billion on Saturday, September 18, 2021. They now command $62 billion in today’s transaction volume. Stablecoins have exploded in popularity in the last three years. The news outlets and academic research routinely cites the tether’s (USDT) spectacular rise.
When it comes to the stablecoin project’s operations, the issue with tether (USDT) is that humans are in charge. On the other hand, the MakerDAO project is a decentralized autonomous organization that manages the DAI stablecoin (DAO). Of course, there are people behind the creation of the DAI stablecoin. However, it depends on the participants who value service and oversupply.
What is DAI?
According to the MakerDAO website, DAI enables users to achieve financial freedom “without volatility” by providing a “price-stable currency that you control.” Users can read the whitepaper to learn more about how DAI works. And also how they can generate DAI on their own terms.
The overall DAI supply has increased by 808.90% in the last 12 months, since September 18, 2020.The DAI market cap was only $696 million at the time, but it is now over $6.3 billion.
DAI is currently the 4th largest stablecoin when it comes to market cap. These statistics were according to Coingecko’s stablecoin market cap. In terms of market capitalization, Tether ($69.5 billion), USDC ($29.4 billion). BUSD ($12.8 billion) are all ahead of DAI. The circulating supply of BUSD is somewhat more than half that of DAI.
According to data, DAI saw nearly $279 million in 24-hour global swaps on Saturday, according to data. The DAI stablecoin is currently used by over 400 decentralized applications (dApps) and controlled exchanges. DAI is frequently utilized in decentralized finance (defi) in liquidity pools, swaps, and cryptographic lending apps.
MakerDAO vs. DAI
The MakerDAO system and DAI have sparked debate, with the stablecoin failing to hold its $1 peg in April 2019. Dai tokens are very dependent on excess collateral. If the price of ether dropped dramatically, DAI holders are collateral-free in a particular price range.
MakerDAO developers had to come up with new strategies to limit risk after a black swan occurrence on March 12, 2020, also known as “Black Thursday.” This included using other coins as collateral instead of ether. Unfortunately, the controlling body opted not to refund users who demanded reimbursement for the under-collateralized investments.
This judgment resulted in a class-action lawsuit being filed against the MakerDAO project’s creators. In the meantime, the MakerDAO community has progressed, and DAI stablecoin issuance has surged. The DAI stablecoin’s value has climbed by 10.3 percent in the last 30 days.
“The views and opinions on this Crypto News Website are solely those of the authors and contributors. These views and opinions do not necessarily represent those of iBaseTrading or its partners.”