DAI tops it off as the strongest stablecoin to date despite Terra’s plunge. USDT and UST may have plummeted – but not DAI.
It’s been a brutal two weeks in the crypto space especially with the devastating collapse of Terra’s stablecoin UST, which is currently trading at a little below 6 cents.
DAI: Peak Performance
A flicker of hope is evident with the DAI or USDC performing with excellent streaks. It appears to have emerged as a clear winner among the roster of stablecoins.
DAI’s market cap had jumped to roughly $53 billion today from just $48 billion on May 11. USDC has held on firmly despite the shakiness and volatility of the crypto market.
Maker's stablecoin market cap had climbed to around $53 billion today from just $48 billion on May 11 (Cryptonomist).
USDT Suffers Slight Loss
Tether’s USDT though sings a slightly different tune. The market cap of USDT has plunged from $83 billion to just $73.19 billion. USDT also suffered slight loss with the dollar peg which has dropped to $0.95.
This may be due to the confusion when pitted with Terra’s USDT which also resulted to redemptions that is tantamount to billions of dollars. Evidently, the token’s market cap has also dipped due to this.
Redemptions have increased as investors were in a panic mode due to the increased volatility with Terra. In fact, Paolo Ardoino, Tether CTO, has redeemed over $7 billion on May 17.
The Stablecoin To Beat
DAI is considerably the stablecoin to beat since the beginning. Even before the surge or popularity of UST, it was considerably the leading and the biggest decentralized stablecoin.
The stablecoin is pegged to multiple cryptocurrencies including USDC, Bitcoin, Ethereum, and other cryptocurrencies. On the other hand, USDC and USDT are both manned by centralized institutions and are pegged on fiat money.
DAI total market cap at $6.55 billion on the weekend chart | Source: TradingView.com
Maker Protocol manages DAI and at the same time uses smart contracts that enable steady liquidation of debts that go below its loan-to-value ratio.
For instance, the ratio goes like this: you will need to deposit $1.70 ETH to mint $1 of DAI. Considering price drops in ETH, you will then need to top up to avoid liquidation.
The Maker protocol and its stablecoin are algorithmic in nature pretty much like UST but at the same time, just like USDC and USDT, they are also collateralized.
However, despite its steady mechanism and its aptitude to thrive all throughout the volatility period, it still didn’t come out as a top choice for many investors.
Do Or DAI – The Strongest Stablecoin
Still, some investors were found to be hoarding on DAI, which is the most profitable stablecoin that emerged despite the fall or Terra’s UST.
Both DAI and BUSD has reaped 1% to 2% premiums as a result of the heightened demand for these stablecoins.
DAI remains as the strongest stablecoin and became the anchor for many investors who are losing out because of Terra’s demise.
Featured image from Edge Wallet, chart from TradingView.com