Recently, Bitcoin.com News reported on the stablecoin tether and how its market cap increased by more than 1,500 percent in less than 500 days. Along with this exponential growth, the market capitalization of the decentralized stablecoin DAI has increased dramatically. It jumped more than 800 percent in the last year, from $696 million to $6.3 billion today.
The increase in stablecoins
On Saturday, September 18, 2021, stable coins will be worth around $127.29 billion, and they now account for $62 billion of today’s transaction volume. There is little doubt that stablecoins have grown in popularity over the previous three years. With news outlets and academic studies frequently referencing tether’s (USDT) meteoric rise.
According to the Makerdao website, DAI enables financial independence without volatility by providing a price-stable currency that you control. According to the website, people can read the whitepaper to learn how the system works and generate DAI on their terms.
Tether (USDT) is that humans are in charge of stable coin operations. On the other side, the Makerdao project, a decentralized autonomous organization, operates the stablecoin DAI (DAO). While individuals are responsible for minting DAI stablecoins, the process is predicated on participants adding value and overcollateralizing the service.
The expansion of DAI supply
The global supply of DAI has expanded significantly during the last 12 months, climbing 808.90 percent since September 18, 2020. At the time, DAI’s market capitalization was barely $696 million, but it has since grown to approximately $6.3 billion.
Stable coins by market capitalization, according to Coingecko’s stablecoins, DAI is now the fourth largest stable coin by market capitalization. DAI is the company behind tether ($69.5 billion), USDC ($29.4 billion), and BUSD ($12.8 billion). The circulating supply of BUSD is somewhat more than half of the total supply of DAI.
On Saturday, DAI saw about $279 million in 24-hour global swaps, and statistics indicate that over 400 decentralized applications (dapps) and controlled exchanges apparently use DAI. DAI is heavily used in decentralized finance (defi) applications like liquidity pools, swaps, and cryptographic lending.
The Makerdao protocol and DAI have not been without controversy, and the stable coin struggled to maintain its $1 peg in April 2019. Dai tokens are highly reliant on excess collateral. If the price of ether crashes, it may leave DAI holders uncollateralized at a specific price range.
The lawsuit against the MakerDAO’s creators
However, after a black swan event occurred on March 12, 2020, often known as Black Thursday, Makerdao developers forced to explore additional strategies such as leveraging other coins as collateral in addition to ether to mitigate risk. Regrettably, users seeking compensation for their uncollateralized investments were denied reimbursement by a government majority.
This judgment finally resulted in filing a class-action lawsuit against the Makerdao project’s creators. Meanwhile, the Makerdao community has continued, and DAI stable coin issuance continues to expand. The DAI stablecoin’s value has climbed by 10.3 percent during 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.”