It is a well-known fact that stablecoins play an increasing role of importance in the cryptocurrency world. DAI, One of the primary stablecoins issued on the Ethereum blockchain, has surpassed the $400 million market cap. Remarkable growth for this project, which is primarily fueled by DeFi popularity.
The Amount of DAI Keeps Rising
Whenever a new stablecoin launches, there are many questions waiting to be answered. First and foremost, the new currency needs to be adopted by a lot of people to generate any real demand. Second, it needs to have ample use cases, as these currencies can never gain in value. In the case of DAI, both of these questions can be answered in a fairly positive manner.
Looking back at the total supply of DAI, it has been fairly stable near the $100 million mark for several months. Unlike Tether’s USDT, or even USDC, DAI has never seen much growth out of the blue. That situation came to change in recent months, however. A very prominent development, as it goes to show that there is room for competition among stablecoins.
As the DAi supply increased from $129.26 million in June to $413.633 million in recent weeks, an interesting shift has taken place. Such a sudden rise in overall liquidity is fairly unprecedented, even in the world of stablecoins.
Most of the growth can be attributed from people converting ETH to DAI through DeFi platforms, as that represents nearly 70% of the entire supply for this stablecoin. Other sources of liquidity include BAT, USDC, and WBTC.
It is also interesting to note how the supply of ERC-20 DAI is much lower. More specifically, according to Daistats, there are just 162,244,261.19 ERC-20 variants of this token. That means that under 40% of the supply exists as a token directly. That isn’t holding the momentum back, but it remains interesting regardless.
DeFi Value Locked Nears $5 Billion
Not that long ago, we mentioned how the DeFi total value locked has been increasing rapidly as of late. That trend is still ongoing, as over $4.73 billion is locked up in value right now. At this rate, it will not take that long to reach $5 billion.
Given the rise in DeFi TVL, it is likely to assume the DAI supply will keep increasing accordingly. For most platforms – especially those providing yield farming – DAI remains one of the most popular options to explore. It is also designed to retain its value, making it preferable to the likes of Basic Attention Token, or even Ethereum itself.