Flipside Daily Mover: DAI

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DAI Price Stabilizes as Development Heats Up

May 10, 2019

DAI Developer Behavior has climbed 23.87% over the last 30 days. FCAS has responded with an 87-point (10.67%) uptick despite downward trends in both User Activity (-0.95%) and Market Maturity (-0.75%). Price has remained markedly close to its dollar peg for the last 3 days.

DeFi-nitely Stabilizing

As the darling of the DeFi movement, MakerDAO’s Dai stablecoin has received increasing levels of attention as the asset struggles to maintain its dollar peg. This week, Dai price has began to stabilize with contributing factors coming from both internal MakerDAO efforts and external market forces.

Internal Factors

The MakerDAO community has responded to Dai price troughs by voting for 8 consecutive stability fee hikes in the last 4 months to try and control the supply. By making the asset more costly to create through collateralizing ETH in the project’s CDPs (Collateralized Debt Positions), they hope to pull the asset up closer to its peg.

Development within the MakerDAO ecosystem has also increased significantly since the end of March, when Dai was trading as low as $0.93. Efforts on the development end are most likely tied to release efforts around Multi-Collateralized Dai as well as infrastructure enhancements to support price stabilization.

External Factors

Recent events in the Tether-Bitfinex scandal have played into the hands of the MakerDAO team, as Dai demand increases with investors moving out of USDT. Additionally, as highlighted by Alex Svanevik in a CoinDesk article today, enticing interest rates for Dai on crypto lending platforms have contributed to increases in demand for the asset.

🌶️ Hot Take

The DeFi movement is one of the most intriguing areas of growth in the crypto industry. 2019 has been a particularly fruitful year with platforms maturing and adoption increasing. The inherent potential of DeFi to enhance global access to financial systems, give individuals increased custody and protection over their assets, all while avoiding costly intermediaries is an exciting reality already taking shape.

At the heart of this movement is Dai, the leading crypto-collateralized stablecoin underpinning a financial system that can rely solely on decentralized mechanisms. With other popular stablecoins such as TrueUSD based upon centralized systems of collateralized fiat held in escrow accounts, Dai is a beacon representing freedom from these existing structures; hence the massive support it has in the space as well as the massive level of scrutiny it must endure. With only a few days of recent near-peg price performance under its belt, MakerDAO and Dai will continue grabbing headlines as the situation evolves. Exciting times for DeFi.

Announcing our partnership with Messari

We are excited to announce FCAS ratings have been integrated into Messari’s OnChainFX dashboard. Our partnership will bring increased transparency to the growing crypto markets.

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