DAI Supply Hits Record Lows: What’s Behind the Decline?
MakerDAO‘s decentralized stablecoin, DAI, has reached its lowest supply level since the beginning of the year. This drop in supply can be attributed to the protocol’s Collateralized Debt Position (CDP) model, which acts as a self-regulating market. When the prices of assets backing DAI decrease, the interest rate for borrowing automatically increases, making it more expensive for borrowers and discouraging new DAI creation.
MakerDAO User Activity: A Mixed Bag
Although the number of active monthly users on MakerDAO has declined by 40% compared to December, transaction fees generated from these users have surpassed the total recorded in December. In the past 20 days, transaction fees on MakerDAO have totaled $16.5 million, marking a 9% uptick from the $15.1 million registered during December.
MKR Holders Rejoice as Token Value Surges
MakerDAO’s native token, MKR, has seen a significant increase in value, rising by 53% in the last month. This price surge has resulted in predominantly profitable MKR transactions, with a ratio of daily transaction volume in profit to loss returning a value of 2.21. Additionally, the Market Value to Realized Value (MVRV) ratio of 40.94% indicates that the token’s market value is 40.94% higher than the average price at which holders acquired the asset, meaning they are holding at a profit.
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