2 Million Ether Held in Maker’s Smart Contract, Numbers Growing by 28% Since November
Amidst the bear market, Maker Dao has been growing steadily over the past few months. As Maker continues to grow as its collateralized debt position (CDP) is now holding $77 million in DAO in debt that means more than 2 million, in Ethereum as collateral. Meanwhile, the price of Ethereum has tanked 90 percent from its all-time high.
Maker Dao is one of the most valuable Dapp on the Ethereum network. While it has a complicated smart contract system, it allows users to borrow Dai tokens that are dollar pegged with ETH as collateral.
At the time of writing, 2,039,118.63 Ethereum tokens to be exact, valued at $245 million is held as collateral to issue $76,976,401.73 amount of debt in Dai. This means for every $1 of Dai about $3.2 worth of Eth is locked.
A Steady Rise In Ether Collateralization
January saw the highest rise in ETH collateralization and it has been on a rise since October 2018. Crypto enthusiast Kevin Rook shared, that the numbers are growing about 28 percent since November and with the current growth, it will be able to store about 59 million of Eth in a year while there is only 104 million ETH in circulation today.
Just last month, MakerDao developer, Mariano Conti took to Twitter to share the achievement,
“2,000,021.056 ETH locked in the Dai Credit System. That's 92.79% of all Wrapped ETH. That's 1.91% of the ENTIRE ETH SUPPLY in existence. That's about $218,000,000 Dollars worth of ETH backing more than $75,440,000 worth of Dai.”
Collateralized Debt Position (CDP) is basically a smart contract that helps in generating a specific amount of DAI stable coin which is USD pegged tokens against the ETH collateral that is locked up in the CDP in order to secure the loan ie. DIA generated.
It further states on the website,
“the value of ETH locked up is always more than 150% of the DAI stablecoins that you’ve generated. Which means you can only take DAI loan up to 66% of the total ETH collateral value in USD.”
Despite the ongoing prolonged bear market, the numbers have grown from 371 in October to 1867 in January.
Maker (MKR) ecosystem is comprised of a stablecoin, collateral loans, and decentralized governance. With Dai, an asset-backed stablecoin it offers “freedom from volatility,” and its open platform offers financial services and allows to gain additional liquidity.
Currently, it is at 17th position with a market cap of $465 million, as per the data provided by the Coinmarketcap. At press time, it has been trading at $465 with 24-hours gains of over 2 percent, down 74 percent from its all-time high. In the BTC market as well, it is in the green by 2 percent while in the ETH market, it is in the red by 0.31 percent.