$234 million worth of Ethereum tokens held in MakerDAO smart contract as collateral

The Ethereum tokens held as collateral on MakerDAO smart contract has been on a constant rise over the past few months. Kevin Rooke, a Twitterati has pointed out that the number of tokens on the smart contract currently accounts to over 2 million Ethereum, worth around $234 million.

MakerDAO is a decentralized autonomous organization, which has a stable coin, provides collateral loans and is known for its decentralized governance. DAI, the platform’s stablecoin, is pegged against the US Dollar. It was created with the intention of solving the high volatility of the cryptocurrency market in terms of price.

The token is used on the platform as a part of its collateral system. In this system, investors can leverage their Ethereum tokens in order to generate DAI. Following this, users can use this token for other purposes. Here, the leveraged Ethereum tokens are considered as collateral and users will gain control over this token only when they pay back the DAI tokens they had taken.

He said on Twitter:

“2 million ETH ($234M) is held in Maker’s smart contract. That figure is growing 28% per month since Nov 2018. If this continues, they’ll have: 4.1 million ETH in 3 months 9 million ETH in 6 months 40.8 million ETH in 1 year There are only 104 million ETH in circulation today.”

MakerDAO and Ethereum | Source: Twitter

MakerDAO and Ethereum | Source: Twitter

MakerDAO data | Source: MKR Tools

MakerDAO data | Source: MKR Tools

Chelsea Palmar, a Twitterati said:

“I’m slightly confused re: the distinction between this milestone, & yr earlier report on the dearth of dApp activity. It’s mainly a terminology thing – are we considering DeFi smart contracts like @MakerDAO “dApps”, or something else?”

She further added:

“I consider this an important distinction to highlight & parse because I’m very rooted in the maximalist scene, & my bitcoiner peers use the “no dApp activity” headline to mock $ETH. Yet MakerDAO has successfully captured a huge amount of active ETH, and is growing steadily…”

AlsoMahler, a Redditor said:

“I’m conflicted between “yay, a good use case for ETH” and “Uhoh that’s too much ETH in one contract”.”

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