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Decentralized finance (DeFi) is receiving a boost from various factors, including US treasuries, stablecoin yields, and real-world assets, according to market intelligence firm IntoTheBlock. The recent move by MakerDAO, the first lending protocol, has sparked interest in the DeFi space. MakerDAO’s stablecoin Dai (DAI) has introduced an 8% yield, resulting in over $1 billion in deposits in less than a week.
This new development has caused a significant impact on MakerDAO and is expected to extend beyond the protocol. The yield is funded by Maker’s revenues, primarily generated from supplying a part of its collateral into US treasuries. The exposure to real-world assets, such as treasuries, has renewed interest in DeFi. The amount of DAI earning the DAI savings rate (DSR) has increased by nearly $1 billion in a week, and the DAI supply has also increased by $800 million, reaching a three-month high.
The increment of the DSR solidifies the trend of real-world assets in DeFi, with other protocols like Ondo Finance already making progress with $164 million in deposits in their tokenized treasuries.
Additionally, IntoTheBlock notes that Maker’s governance token, MKR, has experienced a 35% increase in the last month, ignited by the accumulation of large holders. While the recent price movement in MKR may be considered overheated, the implications of having a competitive rate for the DSR are just beginning. Even if the DSR drops to match treasuries at 5%, it opens up opportunities for other lending protocols and decentralized exchanges (DEXs) to use a stablecoin with sustainable yield generation as a building block.
This development also makes it easier for individuals who would not have otherwise purchased treasuries to access their yields. Overall, the DAI savings rate is expected to play a crucial role in DeFi and the broader cryptocurrency industry by attracting capital and bringing in new users.
At the time of writing, MKR is trading at $1,248, experiencing a 1.66% increase in the last 24 hours.
In conclusion, the recent introduction of an 8% yield on stablecoin Dai by MakerDAO has reignited interest in DeFi. The use of US treasuries as collateral and the exposure to real-world assets has given DeFi a fresh narrative, leading to increased deposits and the growth of the DAI supply. The price of Maker’s governance token, MKR, has also witnessed a significant increase due to the accumulation of large holders. The competitive DAI savings rate creates opportunities for other lending protocols and DEXs and attracts new users to the DeFi space. Overall, the DAI savings rate is expected to play an increasingly important role in the future of DeFi and the cryptocurrency industry as a whole.
