Bitcoin

Maker’s Stored Value exceeds the $ 1 billion limit, but there is a limitation

MakerDAO (MKR), the founding protocol of decentralized funding in Ethereum, reached a new historical record of the total value in its vaults.

According to Defipulse data The value of the collateral held in MakerDAO safes is now slightly over $ 1 billionafter a sharp surge that started on July 22nd.

Total Value Locked (USD) in Maker

Maker’s Stored Value exceeds the $ 1 billion limit, but there is a limitation
Maker’s Stored Value exceeds the $ 1 billion limit, but there is a limitation

Source: Defipulse.com

Most of this growth is due to the sharp rise in prices at Ether (ETH), which remains the most used security for Mint Dai (DAI). Since July 22, the amount of ETH stored in Maker has increased by around 13%, while the value in USD has increased by almost 60%.

The growth of the supplied ether is no accidentWhen the maker community voted on July 17th and 20th for two separate proposals to increase the “debt ceiling” for ETH. Combined, They increased the DAI amount that could be minted with ETH from 160 million to 220 million.

According to Daistats.com, the new roof is almost fully utilized. now 213 million DAIs are minted with ether.

Where does the demand come from?

Since July 2, DAI has been the preferred asset for the growth of the COMP token. As Cointelegraph previously reported, more than $ 800 million was lent to DAI at all times, even if the total DAI offering was only $ 200 million.

The discrepancy between the two numbers is due to recursive loans. COMP-Minters deliver DAIs to compound, then borrow 75% of the tokens they deliver and deliver them again. If you repeat this process several times, the leverage is increased three times, which increases the total value of the connection by this amount in the process..

Once the leverage process is complete, the only way to get more DAI without affecting the market price is to shape it. With a loan interest rate of 0% ETH is currently the most efficient capital for this. Although it is unlikely that all new DAIs will be minted only for the compound, it is by far the biggest target for the stable coin.

The amount of DAI actually stored in compound is currently USD 139.6 million.s that can be obtained with the “foot” function of the connection, which represents the DAI saving rate for the token address of the connection in Etherscan. Liquidity for other major DAI projects is $ 23 million.

The Difficulties of the Total Stored Value Metric

While the TVL measurement is widespread in the DeFi community, it does not largely reflect its exact use. With liquidity mining incentives, stocks that would otherwise make no sense if they included the same asset as collateral suddenly become lucrative. In fact, this is not possible through the Compound standard interface.

In a report published by DappRadar Ilya Abugov shows that only 30 wallets make up 65% of the offer volume and 73% of the loan volume:

“While the industry is focused on TVL metrics, we can see that some whale users can create the illusion of activity.”

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