In a noteworthy development, DAI, the stablecoin offered by MakerDAO, has climbed to the third spot in terms of market capitalization, overtaking Binance USD (BUSD). BUSD’s market capitalization has officially declined to $4.304 billion, while DAI’s market valuation on June 16, 2023, stands at approximately $4.394 billion. However, the circulating supply of DAI has decreased by 5.7% since the previous month.
Shuffling the Rankings: DAI Secures Third Place Among Stablecoins
In May 2022, terra usd (UST), now referred to as terra usd classic (USTC), deviated from its pegged value of $1, resulting in a drastic drop of over 98% in its value. This led to BUSD emerging as the third-largest stablecoin. Additionally, the stablecoin issued by Paxos, another prominent player, held a spot among the top ten largest crypto assets by market capitalization until February 13, 2023, when the New York Department of Financial Services (NYDFS) instructed the company to halt the issuance of BUSD.
DAI’s Rise in Market Capitalization
Following the NYDFS order, a significant amount of BUSD has been redeemed, with data indicating the burning of approximately 11.8 billion BUSD. However, until recently, around June 15, 2023, BUSD maintained its position as the third-largest stablecoin. Today, the scenario has changed, as DAI has officially claimed the third spot among dollar-pegged tokens, boasting a market valuation of $4.394 billion.
Presently, BUSD’s market capitalization stands at approximately $4.304 billion, which is approximately $89,993,165 lower than DAI’s market valuation. DAI differentiates itself from the two leading stablecoins, USDT and USDC, as it requires collateral to be locked up in order to generate new DAI tokens.
The DAI project implements an over-collateralization mechanism, mandating additional collateral for minting DAI, and redeeming DAI involves returning DAI tokens to receive the underlying collateral. In contrast, Tether and Circle serve as central issuers for USDT and USDC, respectively, backing the tokens with collateral held by the issuers.
Recent trends have seen a higher volume of DAI redemption compared to minting, resulting in a significant decrease in the stablecoin’s circulating supply since February 2022. During that period, DAI’s market valuation reached approximately $9.8 billion, but it has since experienced a decline of 55.16%. In the past month, BUSD has seen a reduction of 22.5%, while the circulating supply of DAI has decreased by 5.7%.
We welcome your thoughts on the rise of DAI as the third-largest stablecoin and the decline of BUSD. Feel free to share your opinions and comments on this matter below.
Frequently Asked Questions (FAQs) about Stablecoin market rankings
What is DAI’s current position in the stablecoin market rankings?
DAI is currently the third-largest stablecoin by market capitalization, surpassing BUSD and claiming the third spot.
How did DAI overtake BUSD in market capitalization?
BUSD’s decline in market capitalization, coupled with DAI’s steady growth, led to DAI surpassing BUSD in the stablecoin rankings.
What factors contributed to DAI’s rise in market capitalization?
DAI’s unique mechanism of requiring collateral to generate new tokens, along with its over-collateralization approach, has attracted users and contributed to its market capitalization growth.
Has BUSD experienced a decline in recent times?
Yes, BUSD has experienced a decline in market capitalization, partially due to a significant amount of BUSD being redeemed following regulatory instructions.
How does DAI differ from other leading stablecoins like USDT and USDC?
Unlike USDT and USDC, DAI requires collateral to be locked up and implements an over-collateralization mechanism. Minting DAI necessitates additional collateral, and redeeming DAI involves returning tokens to receive the underlying collateral.
What has been the trend in the circulating supply of DAI and BUSD?
In recent times, the circulating supply of DAI has experienced a 5.7% decrease, while BUSD has seen a reduction of 22.5%.
Can you provide insights on the historical market valuation of DAI?
Since February 2022, DAI’s market valuation has declined by 55.16%, dropping from approximately $9.8 billion to its current valuation of around $4.394 billion.
More about Stablecoin market rankings
- MakerDAO – Official website of MakerDAO, the platform behind DAI stablecoin.
- Binance USD (BUSD) – Official website of Binance USD, the stablecoin that was surpassed by DAI.
- Terra USD (UST) – Official website of Terra USD, which underwent a significant value drop in 2022.
- New York Department of Financial Services (NYDFS) – Official website of the NYDFS, the regulatory body that instructed the halt of BUSD minting.
- USDT – Official website of Tether, one of the leading stablecoins in the market.
- USDC – Official website of USD Coin (USDC), another popular stablecoin.
- Cryptocurrency Market Capitalizations – A platform providing information on the market capitalization and rankings of various cryptocurrencies, including stablecoins.