My dashboard clarifies the following points:

• 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?

First, let try to understand what is DAI and what is Maker.

What is DAI - Stablecoin issued by MakerDAO?

MakerDAO & DAI is a project about DeFi decentralized finance. The platform of the project is built on the Ethereum Blockchain. 2 main and essential components of the project that DAI Stablecoin and Maker (MRK Token).

Thanks to the smart contract of Ethereum, this system is able to regulate and stabilize the price of DAI Stablecoin.

How DAI works?

The fluctuations in the price of cryptocurrencies require a stable currency, whose price does not change despite market forces.

With DAI, anyone with a qualifying asset could collateralize it and receive the DAI Stablecoin.

In more detail, the smart contracts we refer to here are Collateralized Debt Position Smart Contracts - CDPs (temporarily referred to as Smart Contracts for Collateral).

It would work like this: CDPs would hold users' collateral, then return DAI to them. The user pays back the borrowed debt, plus the fee, and gets back the collateral.

The transaction which creates DAI comes from null address and the transaction which burns DAI comes to the null address.

In order to analyze the relation between the whole cryptocurrency market and changes of DAI on the market, we can compare the changes of DAI with the price of BTC, which has a domination influence over the market.

As can be seen from the chart, more and more DAI tokens are minted since the price of BTC has taken off and this has been happening from July 2020. In Oct 2021, around $1.6B DAI has been minted. The largest amount since July 2020 and the price of BTC also marked its highest level since July 2020. This can confirm a close relation between the amount of DAI on the market and the situation of the market.

However, 2022 is not a good year for BTC price as well as the whole market. Therefore, from Jan 2022, the amount of minted DAI started to decrease and continue to decrease till May 2022 when there are $2.3 billion DAI have been paid back to re-claim the collateral.