Introduction

DAI is a decentralized stablecoin that is backed by multi-cryptocurrency as collateral. When a user adds collateral through the authorized Maker Protocol, a new Dai will be minted.

DAI initially only supported Ethereum as collateral. However, by adding more types of tokens in gradual it turned from single collateral to a multi-collateral (Source: The Dai Stablecoin System Whitepaper, 2017). It is worth investigating which of these additional coins had the most impact on the volume of minting DAI.

DAI Descriptives

The graph below shows the volume of DAI minted over two years on daily basis. It is notable that the DAI minter created in 2018, however, the available data begins from 2020.

We can see a surge in using DAI (minting DAI)in past few months.

The cumulative data is presented in the below graph as well.

Collaterals' impact comparison

As I mentioned above, DAI in early stages was a single collateral, later other coins were supported. Graph below shows the cumulative volume of collateral minted through Maker protocol overtime per type. As can be seen from the graph, USDC is most influential collateral.

Graph below compares the growth of USDC and ETH as DAI collateral. USDC started to be supported by Maker protocol in August 2020 as data show. It has a steady upward trend till May 2021, when it has a dramatic increase. Another surge can be seen in November 2021.

BAT was one the first collaterals, but it still has a tiny share of minted DAI.

DATA

Any DAI minting involves token transfers like below:

To create the dataset for the analysis, my starting point was extracting all transactions consisting transfer of DAI from the Genesis account. Then, I traced back these transfers to find out what token is used as collateral from the Genesis account for each DAI generation.