Try Quests to earn cryptoDAI on the Market (May 13)
Analyze large shifts in the amount of DAI on the market over the past year. What might have caused these shifts? Are these events related to Maker directly? Are they related to the crypto ecosystem as a whole? Provide metrics to support your analysis.
The use of stablecoins has increased a lot in recent months.
Due to the decline in prices in the crypto market and the continuous downward trend of bitcoin prices in recent months.
In this analysis, we want to consider the large volumes of DAI Transfers in the Ethereum network. We want to know if the volume of these transactions is related to the crypto market conditions. Do users use more DAI when the market falls?
Methods
We can use the BTC price to determine the crypto market conditions.
First of all, we must separate the volume of transactions with high values from other transactions. In this analysis, I categorized large-volume transactions into three categories.
1.Between $100k and $500k
2.Between $500k and $1m
3.Equal or above $1m
Lets see What is the number of transactions in each of these categories.
Chart below Shows number of large shifts in the amount of DAI transactions , We can see the days when the number of transactions was more. In the next chart, we compare these days with the price of Bitcoin on that day.
The chart below shows the number of transfer transactions over $1m in DAI tokens with bitcoin price over time.
If we look closely at the chart, we see that after each BTC price peak, when the price drops to lower value, we see number of large volumes of DAI transfers increase.
For example look at this date, May 19th 2021 , on this date BTC price falls to $39k from last price peak that was $63k. and on Jan 22th 2022, price falls to $35.5k from $67k again we can see large amount of DAI transfers. and in recent days on when price dropped below $30k.
as you can see in Cumclutive chart below ,In total number of Transfer transactions and volume of transfers which is Equal or more than $1m increased over time.
In this analysis, we observed that whenever the price of bitcoin fell sharply and fell below expected prices, more users tend to use stablecoins for fear of losing funds.
DAI is one of the most widely used stablcoins in the ethereum network. We read together and saw how the volume of large transfers of DAI tokens has greatly increased with the fall in the price of bitcoin.