In the field of decentralized finance, MakerDAO has always been a remarkable presence.
As a leader in DeFi, MakerDAO has developed rapidly in recent years. According to data from Token Terminal, MakerDAO's revenue in the second quarter of 2023 reached a record high of US$85 million, reflecting its huge market appeal and the effectiveness of its business model.
More notably, MakerDAO’s DAI supply has grown by nearly $1 billion in just two months, jumping from $4.4 billion to $5.4 billion. Behind this growth is its decision to adjust the stability fee, DAI borrowing annual percentage rate (APY) and increase the DAI savings rate (DSR) on the SparkLend platform. This not only boosted the circulation and usage of DAI, but also made DAI the largest stablecoin in terms of monthly transaction volume on the chain, with a new record of $636.72 billion in April.
In addition, the tokenization trend of real-world assets (RWAs) is also gradually heating up.
The following content will take a deep dive into how MakerDAO can use its core technology and strategic deployment to maintain and expand its leadership in the DeFi field, and what all this means for the cryptocurrency market.
01
The weight of DeFi’s crown
Since its inception, MakerDAO has always been a pioneer in decentralized financial (DeFi) innovation.
Since its launch in 2021, MakerDAO has continued to evolve its protocol, focusing on enhancing the usability of the DAI stablecoin and its integration with real-world assets (RWAs). MakerDAO's infrastructure updates place a special emphasis on transparency and user control, leveraging advanced blockchain technology to ensure data integrity and secure access.
In 2022, MakerDAO launched an updated version of its Multi-Collateral DAI (MCD) system, which expanded its functionality through a hybrid architecture (EVM compatible with other blockchain technologies), allowing DAI to be managed and issued more efficiently on the chain.
In addition, this version also introduces a series of RWA protocols, through which users can use non-digital assets as collateral, thereby increasing the backup support and liquidity of DAI.
Entering 2023, MakerDAO announced its further upgrade plan, and it is expected to complete the deployment of multiple EVM-compatible networks in the next few months. The core of the plan is to transform the MakerDAO platform into a full-chain financing protocol. The core components include: a more advanced DAI stable module, a censorship-resistant database that records user transactions and financial activities, and a new multi-chain bridging solution, which allows DAI to circulate more freely in various blockchain networks.
It is particularly noteworthy that MakerDAO's smart contract framework is also being continuously optimized, aiming to lower the user's operating threshold so that non-professional users can easily participate in DeFi activities. Among them, the increase in the DAI Savings Rate (DSR) allows users to obtain deposit interest, further enhancing the attractiveness of DAI.
In addition, MakerDAO is also strengthening its support for the creator economy by improving support for the ERC-1155 standard through version v3 to reduce transaction costs and provide users with more flexibility and efficiency.
Overall, these technological upgrades and market expansion strategies of the MakerDAO team not only strengthen its leadership in the DeFi field, but also provide new impetus for the development of the entire cryptocurrency market.
02
Strong profitability
MakerDAO continues to take a leading position in the decentralized finance space, and its latest financial data and market performance further demonstrate its solid and growing potential. 2023 was a record-breaking year for MakerDAO, with revenue reaching $85 million in the second quarter, demonstrating strong profitability.
From the perspective of asset allocation, MakerDAO's strategy focuses on enhancing its asset diversity and growth strength. In 2023, its real world assets (RWA) performed particularly well, with assets increasing from approximately US$198 million at the beginning of the year to US$244 million at the end of the year. In addition, MakerDAO's performance in the stablecoin and crypto loan markets also showed a trend of continued growth.
For liabilities, MakerDAO has shown sound management and optimization. DAI stablecoin, as its main form of liabilities, has slightly decreased from $922 million to $846 million over the past year, reflecting market volatility and adjustments to capital management strategies.
In addition, in terms of MKR burning and buyback, MakerDAO has adopted an active strategy to reduce the circulating supply and enhance the value of the token. From the dynamics of burning, MKR continues to decrease in the market, reflecting its commitment to enhancing intrinsic value and rewarding shareholders.
A price comparison of MKR and ETH shows that while MKR has experienced volatility over the past few years, it has consistently maintained a strong performance compared to ETH, indicating that investors’ confidence in MakerDAO remains firm.
03
Opening DeFi entry for traditional assets
As the DeFi sector rapidly expands, MakerDAO continues to explore new multi-chain strategies to increase the popularity and application of the DAI stablecoin.
MakerDAO’s multi-chain integration plan focuses on enabling seamless transactions and management of DAI on different blockchain platforms, ensuring that users can easily access its services around the world.
In a recent major update, MakerDAO launched a series of tools and protocols that make it not only limited to Ethereum, but also able to support other EVM-compatible chains such as Binance Smart Chain and Polygon. These new deployment strategies are designed to provide lower transaction fees and faster processing speeds, thereby attracting a wider user base.
In addition, MakerDAO is also actively exploring integration with the real economy, especially by connecting with real-world assets (RWAs). By linking with traditional financial assets such as treasury bonds and real estate, MakerDAO not only enhances the security of DAI funds, but also provides users with diversified investment options. This strategy not only promotes the liquidity of tokenized assets, but also provides a bridge for traditional assets to enter the DeFi world.
In terms of technical implementation, MakerDAO uses advanced smart contracts and automation strategies to ensure that all assets and transactions are carried out in a decentralized and secure environment. For example, its latest smart contract platform includes automated risk assessment tools and liquidation mechanisms that can effectively prevent system overload and potential financial risks.
summary
As a leader in the field of decentralized finance, MakerDAO’s continuously iterative protocols and robust financial management strategies highlight its competitive advantages in the DeFi market. By expanding its asset portfolio, optimizing its liability structure, and actively repurchasing and burning MKR, MakerDAO not only strengthens its market position, but also provides significant value to investors and protocol users.
However, despite its outstanding performance and strategy, MakerDAO and the entire DeFi industry still face a number of challenges, including regulatory uncertainty, market volatility and its integration into the broader financial ecosystem.
At the same time, the current MakerDAO threshold actually rejects a large number of retail investors, which is a systemic problem that is difficult to break through in the short term. MakerDAO must continue to explore product iterations and try to minimize the user threshold while ensuring safety and compliance, so as to truly realize the inclusiveness of financial services. This is related to the long-term development prospects of the entire token system.
