TL;DR
- DAI reached a historic record of $240 billion in on-chain transaction volume last week, surpassing the combined volume of other stablecoins.
- The surge occurred in a market characterized by losses and volatility, where stablecoins offer stability compared to more unstable cryptocurrencies.
- A significant portion of the transactions took place on the Ethereum and Polygon networks. Highlighting their importance in the DeFi ecosystem and their use in activities such as lending and leveraged lending.
Last week, the stablecoin DAI achieved a historic milestone by recording a record $240 billion in on-chain transaction volume. This figure surpassed the combined volume of all other stablecoins available in the market.
The unprecedented increase in DAI transaction volume occurred in a market marked by losses and overall volatility. In times of prevailing uncertainty, stablecoins often serve as a refuge for investors. As they offer stability compared to more volatile cryptocurrencies like Bitcoin and Ethereum.
$DAI saw $240B in on-chain transaction volume last week.
Not only is this a new weekly high for $DAI, it's also more than all other stablecoins combined! pic.twitter.com/pgm3pv7M5M
— IntoTheBlock (@intotheblock) April 23, 2024
Another significant aspect of DAI’s volume record is that a large portion of the transactions occurred on the Ethereum (ETH) and Polygon (MATIC) networks. The focus on layer 1 and layer 2 networks underscores the importance of the stablecoin in the DeFi ecosystem. Where it is widely used in activities such as lending and leveraged lending.
Additionally, during the peak of volatility, a significant amount of DAI was withdrawn from exchanges. This could be interpreted as a sign that investors were moving their funds to personal wallets or participating in DeFi activities to seek higher yields during turbulent times.
Controversy Following DAI Record
A key factor contributing to the volume increase was MakerDAO’s partnership with Ethena. Which involved a massive allocation of $1 billion DAI to the USDe pool. Although it sparked controversy in the market, with some considering it risky and aggressive. Its impact on the stablecoin’s volume growth cannot be denied.
Despite the controversy. DAI has maintained its position as one of the top stablecoins by market capitalization, competing with Tether (USDT) and USD Coin (USDC). Currently, it has a market capitalization of over $5 billion.
The record on-chain transaction volume reflects its growing adoption and utility in the market, especially in the DeFi space. DAI is likely to continue playing a key role in facilitating transactions and financial stability in the crypto space.
