DeFi Series Report | Measuring DeFi Trends with DAI Eco Data

This article provides comprehensive statistics on DAI stable currency supply growth, liquidity, borrowing demand, and price volatility. In the form of data and charts, we observe the behavior patterns of DeFi users inspired by the financial system.

The original author is Christian Seberino and Danning Sui from alethio.

The following is the translation:

First, DAI supply growth

The chart below shows the growth in supply since the launch of the DAI token (since December 2017). At present, the daily supply of DAI tokens in circulation has increased to nearly 100 million pieces (the highest record in history is 95,451,247 on March 19, 2019, and the recent data is maintained at around 84 million).

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Figure 1: Supply of DAI

As of now, the most DeFi application for lock bin DAI is Compound , which controls about 17.11% of DAI supply, the second largest DAI lock app is dYdX , which controls 3.74% of DAI supply, while Maker's Eth2Dai ranks tenth. .

Figure: Share distribution map for all DAI lock bin applications

Below are the top 10 DAI "whale" addresses and their lock positions:

Figure: 10 big DAI lock position

Second, the performance of DeFi lending platform

The chart below shows the daily borrowings of several major DeFi lending platforms over the past six months:

Chart: Big borrowings of major lending platforms in the past six months

Please note that the area map above is not stacked. We can see that MakerDAO (blue area) has always dominated, reaching a peak of 4.3 million DAI per day in late June and mid-September.

Compound migrated their protocol to version 2 (V2) in early May, where we only reference data from the compound v2 protocol. The results show that the orange area (Compound v2) and the pink area (dYdX) are always in the second echelon (shared) state, which reaches 3 million DAI per day at the peak.

We also noticed that the NUO network (green area) and bZx (red area) played a role in the market. In the first quarter, the NUO network launched a new platform and quickly gained a lot of traffic. bZx has been steadily rising since June.

The chart below compares the monthly lending activities of the above DeFi project. The growth of dYdX's DAI lending percentage over the past six months is encouraging: as of October 17, we have collected data showing that dYdX's monthly total DAI borrowings have exceeded MakerDAO since August, and In October (until 17th), dYdX users accounted for almost half of all major lending platforms' DAI loan demand (about 49.37%).

Chart: Market share of DAI loans for each lending platform in the past 6 months

Third, the liquidity of major DEX (decentralized exchanges)

The chart below shows the daily trading activities of several major decentralized exchanges (DEX). OasisDEX is a DEX platform derived from the MakerDAO system, which has a large advantage, followed by Uniswap, followed by Kyber and RadarRelay.

Figure: Market share of major DEX DAI trading volumes (2019)

Note that we did not include the 0x project here because it is the underlying protocol of many relay class DEX (such as RadarRelay, Paradex), so the transaction volume may be calculated repeatedly. In fact, most of the traffic on 0x comes from RadarRelay, and their transaction volume is basically similar.

Similarly, for dYdX exchanged with the OasisDex Eth2Dai market, in order to avoid duplication of total trading volume, we display all of its trading volume under OasisDex. The actual trading volume of DAI on the dYdX platform is between Uniswap and Kyber, which peaked in June, with a total monthly trading volume of approximately 17.9 million.

In general, according to the above-mentioned DEX trading situation, since the beginning of this year, the trading volume of DAI has steadily increased. The total trading volume of DAI in July was 90 million, and then it dropped by nearly 50%.

Based on the above statistics, we observed the autonomous life cycle of the DAI financial ecosystem. Based on the trends and correlations of the following time series, DAI tells how its price is stable from the user's incentive behavior:

“Dai manages supply and demand through economic incentives. When the price is higher than 1 US dollar, anyone can create Dai and sell it at a price higher than its value. This increases the supply, causing the Dai price to fall back to 1 US dollar. Similarly, when Dai When the price is less than 1 US dollar, the user can repay the debt in the system at a lower interest rate, because they can purchase Dai at a price lower than 1 US dollar at this time, but pay the debt at a fixed interest rate of 1 US dollar. The Dai used to pay the debt is When it burns, the supply is reduced and its price rises."

Figure: 2019 DAI price, supply, volume and amount of borrowing (price data from coinmarketcap.com)

In early February, DAI prices fluctuated slightly (1 and 2), which may lead to an increase in borrowings (5 figures) in the next few days (February 24, DeFi users borrowed 4.33 million DAI a day, resulting in supply The figure (3) turns blue, and the cumulative supply for the day is 88.1 million DAI).

Subsequently, the increase in DAI supply in April led to a depreciation of the price of DAI, when we saw a price change of -6.54%, which may lead to an increase in trading volume (4 figures) and borrowings (5 figures) (when prices fall) Borrowers and traders can pay less dollars to hold DAI.)

It is difficult to infer the causal relationship between variables here because in an economic system they always interact and guide each other. However, one conclusion we can draw is that they are in-phase and highly correlated.

Fourth, the price of DAI is volatile. Is the stable currency really stable?

Therefore, when we see that the price of DAI is largely affected by user behavior, the above problems may be paralyzed in people's minds. We will apply the beta analysis method and compare the DAI with multiple stable currencies to measure the risk.

Back to the definition, a stable currency (such as DAI) refers to a cryptocurrency that attempts to anchor the value of an asset, while examples of stable coins that attempt to anchor $1 include DAI, TrueUSD, USDCoin, Tether, Gemini Dollar. The following is the price performance of these stable coins in the past 12 months (data from CoinMarketCap).

Chart: The price and percentage change of major US dollar stable currencies over the past 12 months (data from coinmarketcap.com)

As can be seen from the table below, their prices are maintained near $1, and the DAI is the closest to $1. In addition, their magnitude of change is also small, the minimum is USDC:

Table – Mean and change in price of each stable currency (365-day window period)

In addition, we also attached statistics on Ethereum and Bitcoin as a comparison currency.

Unlike other cryptocurrency markets, stable currencies should not be affected by price volatility. One measure of the volatility of a stable currency is its beta relative to the main cryptocurrency, such as Bitcoin and Ethereum. Below, there are several major stable coins relative to the beta values ​​of Bitcoin and Ethereum:

Table: Beta Coefficients for Major Stabilized Coins vs. Bitcoin and Ethereum (365 Day Window Period)

The token itself has a beta coefficient of 1, which is a threshold for risk metrics in stock market analysis practice:

1. When the beta value is > 1, it means that the volatility of the stock is greater than the market benchmark index (usually the sp500 index of the stock market). It can also be interpreted as sensitivity to market changes. For example, when the market fluctuates, stocks are greatly affected, resulting in higher yields and higher risks;
2. When the beta value = 1, they have the same level of volatility;
3. When 0<beta value <1, stocks are less affected by market trends;

Usually stocks are positively correlated with the market, ie the beta coefficient is usually positive. However, there is also a negative value. When the market falls, some stock prices will rise.

For the above five stable coins, we see that their absolute values ​​are less than 0.1, which means that they are much more stable than eth and btc, and are unlikely to be affected by cryptocurrency market trends. In the appendix, we also attached a table of beta values ​​for other mainstream currencies for comparison.

In the stable currency, usdc and tusd have the smallest market value and are negatively correlated with eth and btc, indicating that they are “storage” tokens that avoid risk when the market is unstable: when eth/btc market rises, users may sell Tusd/usdc, when the eth/btc market falls, users can swap their holdings for tusd/usdc.

appendix

The beta coefficient of the mainstream currency based on the 2017 60-day window period:

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