The stablecoin dai (DAI) broke a market capitalization of $1 billion on Wednesday, according to CoinGecko.
“One billion dai in circulation is a huge milestone and a powerful validation that people around the world want more access, more transparency and more opportunity to maximize their economic potential,” Rune Christensen, MakerDAO’s founder, told CoinDesk through a spokesperson.
Supply actually increased by $30 million at one point today, the MakerDAO Foundation confirmed, though it provided no additional details.
DAI is created when Ethereum users deposit one of many assets into the Maker Protocol and borrow against that asset in the form of DAI. The smart contracts enforce a value of $1 per DAI, which helps the stablecoin generally maintain a $1 peg, though it varies from time to time.
All of the relevant data about the MakerDAO system can be monitored at the Dai Stats website. As of this writing, the total supply is at around 993 million DAI. (The $1 billion market cap is explained by DAI being slightly above its peg at $1.01, as of press time.)
“Dai is a pioneer of protocol-created financial instruments – and reaching the milestone of one billion dai proves that it works, is here to stay and is the honey badger of Ethereum,” Robert Leshner, founder of DeFi money market Compound, told CoinDesk.
On Compound, there’s actually $1.6 billion in DAI locked up right now. As we’ve previously noted, this is because users deposit, borrow and deposit again, in loops (as much as collateralization rates will allow).
While most DAI that’s used in the world takes the form of an ERC-20 token, not all of it does, and that is by design. DAI doesn’t go into the ERC-20 smart contract until users withdraw it from MakerDAO, and in the future users could do so in other token standards, if better ones arise, Nik Kunkel, a developer at the Maker Foundation, explained.
“In the Maker system, dai is not an ERC-20 token. Dai is just dai,” Kunkel said.
About a third of the total supply is in the DAI Savings Rate (DSR) smart contract, despite the fact that it currently offers no return. Most dai, over 620 million, are currently in the ERC-20 smart contract, as viewable on Etherscan.
“DSR is part of the protocol itself, so it’s not opinionated about what form dai should be in,” Kunkel explained.
Maker currently has $2.3 billion in assets locked according to DeFi Pulse, making it the second biggest DeFi application on Ethereum, after Uniswap.
“MakerDAO was built to help people find a better, less biased and more transparent way to participate in the global financial system,” Christensen said.