DAI Supply Skyrockets: Possible Explanations

The supply of leading stablecoin DAI has seen a remarkable growth spree since early March, with a 24% increase in just over two months, rising from 4.42 billion to 5.48 billion on May 12, 2024. For a while, the circulating supply of DAI was on a downward trend, but the surge since March has been […]

The post DAI Supply Continues to Surge: 24% Increase in Over Two Months appeared first on Coin Edition.

DAI Supply Skyrockets: Possible Explanations

  • DAI supply surged 24% in two months, from 4.42 billion to 5.48 billion on May 12.
  • The surge is primarily fueled by the popularity of the Dai Savings Rate (DSR).
  • MakerDAO had raised the DSR multiple times to attract more users.

The supply of leading stablecoin DAI has seen a remarkable growth spree since early March, with a 24% increase in just over two months, rising from 4.42 billion to 5.48 billion on May 12, 2024.

For a while, the circulating supply of DAI was on a downward trend, but the surge since March has been primarily fueled by the popularity of the Dai Savings Rate (DSR). The DSR allows users to earn interest on their DAI deposits, resulting in increased demand for DAI.

As per The Block Data, the circulating supply of DAI has been declining as users burn DAI to deposit into the DSR, resulting in the creation of SavingsDAI (sDAI), which effectively reduces the circulating supply of DAI while increasing the supply of sDAI.

MakerDAO, the protocol behind DAI, has raised the DSR multiple times to attract more users. Initially set at 1%, the rate was increased to 3.3% and then to 8% to remain competitive. The 8% hike in August 2023 significantly bo…

The post DAI Supply Continues to Surge: 24% Increase in Over Two Months appeared first on Coin Edition.