The explosive third quarter of decentralized finance (DeFi) brought significant growth in stablecoins compatible with Ethereum (ETH).
According to crypto market data aggregator Messari, MakerDAO’s supply of DAI stablecoin increased 623% in the third quarter of 2020, bringing the value of the token to over $ 1 for four consecutive months.
Since the beginning of July, with a market capitalization of nearly $ 130 million, DAI’s offering has grown to more than $ 940 million today.
DAI is created when Ether holders deposit their ETH in the MakerDAO protocol so that they can create the stablecoin using Ether as collateral. DAI is an ERC-20 token and can then be used on the Ethereum network to generate interest or return using DeFi protocols.
Messari attributes much of DAI’s recent growth to the launch of four major liquidity reduction programs in the DeFi sector, including a change in Compound (COMP) revenue distribution, which will increase DAI rewards on June 30, the launch of Yearn Finance (YFI ) Farming in July, Strengthened 18, Start of Curve (CRV) on August 13 and Start of Profitable Agriculture for Uniswap’s UNI token on September 16
Messari estimates that 65% of the total DAI supply is currently supplied to DeFi protocols for high-yield farming.
Demand for Circle’s USD coin (USDC) also exploded in the third quarter. USDC’s market capitalization tripled from $ 928 million on July 1 to $ 2.79 billion today. USDC is the second stable coin after Tether (USDT), growing more than $ 1 billion in a quarter.
Data released by Flipside Crypto suggests an increase in demand for USDC among DeFi users after Curve launched. USDC’s market capitalization has increased 150% since the platform was launched.
Messari estimates that the capitalization of the combined stablecoin sector increased by $ 8.2 billion in the third quarter – more than the last four quarters combined. Of the sector’s $ 20 billion capitalization, the company estimates that 75% was spent on Ethereum
USDC has also partnered with the blockchain networks Solana (SOL), Stellar (XLM), Algorand (ALGO) and Flow (FLOW).