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Examining the Supply of Dai

An Analysis into CDP Demand

Jack Purdy
Jan 11, 2019 · 4 min read

Sensitivity Analysis 1: Fluctuations in Ether and Bitcoin Price

The first analysis I ran is looking at how the supply of Dai changes given increases in the price of the underlying collateral. The rationale behind this is as the price increases more users will want to take out CDPs denominated in larger USD amounts. If you have $10,000 in ether which is later worth $50,000 you will take advantage of the increased access to liquidity. Instead of using a fixed percent of ether locked up, I used the Dai outstanding as a percent of the total ether market cap to account for this. (Currently ~0.5% according to Makerscan)

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Total Dai Debt (millions)

Sensitivity Analysis 2: Fluctuation in the Debt/Market Cap %

In this analysis I kept price fixed and looked at how changing the debt taken out as a percentage of market cap effects the Dai supply. Rather than use approximate current prices, I used bitcoin and ether prices around half of prior all-time highs of $500 and $10,000 respectively. (If you’re reading this you probably believe we’ll see those levels inevitably).

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Total Dai Debt (millions)

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