DAI Bounties: DAI Volume

    For this bounty, Ethereum data has been used.

    Loading...

    DAI VOLUME

    DAI differs from other leading stablecoins in a very important way: Unlike other stablecoins which are backed by a single fiat currency, DAI is a multi collateral-backed cryptocurrency. Anyone who has collateral -some Ethereum assets- can leverage them to generate Dai on the Maker Platform (Source: The Dai Stablecoin System Whitepaper, 2017). This asset will be frozen and be considered as the backing of stable DAI. Therefore, we can expect that DAI has a different daily transaction pattern from other stablecoins. To investigate this difference, I will, first, look into DAI transactions on the Ethereum blockchain. Then, I will go on to comparison between DAI and three leading stable coins: USDt, USDC, and USD.

    DAI Descriptives

    Graph below shows volume of DAI transactions on daily basis. As can be seen from the graph, DAI transactions has an upward trend. Time series regression analysis also supports this significant growth (R2 = .1654, F(1, 745) = 147.673, p < .000)).

    Loading...
    Loading...
    Loading...
    Loading...
    Loading...
    Loading...
    Loading...
    Loading...
    Loading...
    Loading...
    Loading...

    Type of transfers

    Here, I will present findings regarding types of transfers. The donut chart below shows the percentage of the total transfer of DAI on the Ethereum blockchain since 01-01-2020. As can be seen from the graph, DAI has been used most for Defi, DEX, chain administration, and CEX, respectively.

    It is interesting to see whether this proportion of use has been changed over time or not. the graph below reveals that the dominance of using DAI in DeFi is persistent over time.

    Two donut charts below also compare the use of DAI for Defi in 2020 and 2021. As can be seen, the use of DAI in DeFI has been increased from 2020 to 2021 whereas the transfer of DAI to DEX has been decreased.

    Type of transfers comparison

    The graphs below show how stable coins differed in terms of usage in 2021. While other stable coins are mainly used for CEX (for instance USDT), dapp (for instance UST) and dex (USDC), DAI is mainly used for defi.

    Comparison between DAI and the leading stablecoins

    The graph below demonstrates the daily transfer of DAI and three other stablecoins on the Ethereum blockchain.

    The steady growth can be seen in all four stablecoins particularly for UST. The dominance of USDt is notable. However, in December 2021 there is a remarkable jump in the volume of UST. This overview cannot show a considerable difference in the daily transfer of DAI with other stablecoins.

    In the following paragraphs, to zoom in on the differences in daily volume, I will, first, do one-to-one comparison, then I will break down the data into categories.

    One difference in DAI trend with the other is shown in December 2021 where the volume remained constant for a couple of weeks. I do not have a clear explanation for this, but this may result from a restriction on exceeding of generation of DAIs. In this period UST volume is also at an upper level.

    Main Findings

    How does the daily volume of DAI transactions compare to other stablecoins?

    The daily volume of DAI is growing. There is no difference in fluctuation of daily transfer between DAI and other stablecoins regardless of type of transfers.

    What is DAI most used for?

    When we take into account the type of transfers. the difference between DAI and the other stablecoind is significant. DAI is mainly used for DeFI unlike other stablecoins.

    Absolute volume of DAI use for DeFI is also more than the other stablecoins.