Latest news with #MakerDAO
Straits Times
7 hours ago
- Business
- Straits Times
The promise and the perils of stablecoins
They have the potential to meet real financial needs. But they can do this only if regulations are robust enough to protect users and ring-fence issuers. The list of potential stablecoin issuers is expanding beyond the incumbents such as Tether Holdings, Circle and MakerDAO. These days, millions of overseas Filipino workers send money home using stablecoins – digital currencies pegged one for one to major fiat currencies like the US dollar, which gives them a stable value – through fintech apps such as and PDAX. The recipients instantly convert these funds into Philippine pesos via local e-wallets, at a fraction of the cost of traditional remittance services. In Nigeria, platforms like Chipper Cash and Flutterwave enable users to bypass unreliable local banks, receive stablecoin remittances and access US dollar equivalent funds, despite currency instability at home. From Asia to Africa to Latin America, stablecoins are no longer a tech curiosity. They are emerging as a lifeline, a disruptor and the new gold standard for global money transfers.
Yahoo
4 days ago
- Business
- Yahoo
3 Reasons to Buy Dai, One of the Largest Stablecoins in 2025
Key Points Unlike other top stablecoins, Dai has no central governing body that could freeze assets. A decentralized autonomous organization (DAO) regulates Dai, and smart contracts manage the stablecoin itself. You can earn yield on it through rewards programs or crypto lending. 10 stocks we like better than Dai › Most cryptocurrencies are extremely volatile. Prices can change dramatically over a month, a week, or even a day. Stablecoins are the exception, as they're intended to stay tied to the value of a fiat currency. Dai (CRYPTO: DAI) is one of the older U.S. dollar stablecoins, as it was launched in 2017. What makes it unique is that DAI tokens aren't backed by fiat reserves -- they're backed by overcollateralized crypto loans. Smart contracts govern Dai and handle the issuance of new tokens. Dai and other stablecoins aren't cryptocurrency investments, like Bitcoin, Ethereum, and other coins are. Despite that, there are other reasons to buy Dai. 1. Support decentralization We'll start with the biggest difference between Dai and many of the other largest stablecoins. A decentralized, autonomous organization (DAO), Sky (formerly known as MakerDAO), regulates Dai. Anyone who holds the organization's governance token can make proposals and vote on changes for the stablecoin. Dai is entirely decentralized, meaning no regulating body or government could theoretically freeze assets or accounts. The two largest stablecoins, Tether and USDC (CRYPTO: USDC), both have companies that manage them and issue new tokens. Tether Limited is the issuer for Tether, and it has a controversial reputation for not being fully transparent about its fiat reserves. The Commodity Futures Trading Organization fined Tether Limited $41 million in 2021 for claiming that Tether was fully backed by U.S. dollars. Circle, which just completed its initial public offering (IPO) in June 2025, is the issuer for USDC. It doesn't have the same reputational concerns as Tether -- Circle has provided monthly attestations to USDC's reserve since the stablecoin's launch in 2018, with assurances from a Big Four accounting firm. Still, decentralization was the original ethos of cryptocurrency. If the idea of a digital currency with no central governing body is important to you, then Dai is likely the most appropriate stablecoin to buy. There are now more stablecoins that work similarly, but Dai is also second only to Tether in trading volume, so it's easy to buy, sell, and swap for other cryptocurrencies. 2. Earn passive income through savings and lending programs One of the financial benefits of holding stablecoins is that you can earn rewards on them. Just like you could put your cash in a savings account or a certificate of deposit (CD) to earn interest, you can do the same with cryptocurrency -- and more. Some crypto exchanges pay interest on stablecoin balances. Lending platforms also exist that let you deposit stablecoins (or other types of cryptocurrency) and earn interest. It's worth mentioning that USDC and Tether are generally better choices for earning rewards. There are more crypto exchanges that pay interest on those two stablecoins than on Dai. Sky (the DAO behind Dai) offers Sky Protocol, which pays a variable rate on stablecoin savings that you deposit. The rate is 4.5% at the time of this writing (July 22). But to earn that rate, you need the upgraded version of Dai that was launched last year, USDS (CRYPTO: USDS). You can convert DAI tokens to USDS tokens at a 1:1 ratio, and you can also convert USDS back to Dai if you want. The value and functionality are the same. It's not quite as straightforward as earning a return on USDC or Tether, though. 3. Use with DeFi apps and services Decentralized finance, or DeFi for short, refers to financial systems built on blockchain technology. We already covered one example of a DeFi service with crypto lending platforms, which run on a blockchain and are governed by smart contracts. They allow users to fund and borrow crypto loans without any sort of financial institution involved. Decentralized crypto exchanges are another example, where you can swap cryptocurrencies with no registration process required. There's currently $140 billion in total value locked (TVL) in DeFi protocols across different blockchains, according to DeFiLlama, up about $45 billion in the past year. The popularity of DeFi has been instrumental to the success of the biggest smart contract blockchains, including Ethereum and Solana. To use DeFi, you need a crypto wallet, and you may also want to have some stablecoins in that wallet. They give you a stable digital asset to swap, lend out, and use with any other DeFi apps and services that interest you. Dai is far from your only option, but it's a good choice because it's widely used. Ultimately, Dai isn't for everyone. Some may feel more comfortable with a stablecoin that has fiat reserves, in which case USDC is probably a better fit. But if you value decentralization, you may want to go with Dai for your wallet. Should you invest $1,000 in Dai right now? Before you buy stock in Dai, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Dai wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,774!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,942!* Now, it's worth noting Stock Advisor's total average return is 1,040% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Lyle Daly has positions in Bitcoin, Ethereum, Solana, Tether, and USDC. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy. 3 Reasons to Buy Dai, One of the Largest Stablecoins in 2025 was originally published by The Motley Fool
Business Insider
03-07-2025
- Business
- Business Insider
DWF Ventures Releases Deep Analysis of DeFi Lending Markets
DWF Ventures, the venture arm of web3 investor and market maker DWF Labs, has published a detailed analysis of decentralized finance lending markets. The report examines key players, market dynamics, and emerging trends shaping the lending landscape, with a focus on protocols driving innovation across the omnichain landscape. The analysis explores the competitive lending market, where protocols like Aave, Compound, and Sky (formerly MakerDAO) are vying for dominance. Lending markets have grown significantly, with total value locked in DeFi lending protocols surpassing $65B across major chains. The report highlights the critical role of lending in DeFi, enabling users to borrow against collateralized assets while providing lenders with yield opportunities. DWF Ventures identifies several strengths in the current lending market, including robust protocol revenues, high capital efficiency, and increasing adoption of cross-chain lending solutions. It notes that Aave's market share has increased to around 60% and examines its forthcoming v4, which introduces a Hub and Spoke architecture that enhances modularity, liquidity, and developer flexibility. The report also highlights innovative features like flash loans and dynamic interest rate models, which enhance user flexibility and improve market resilience. However, the analysis pinpoints concerns about potential risks, including liquidation cascades during market volatility and regulatory uncertainties impacting DeFi's growth. DWF Ventures notes that while lending protocols have shown resilience, the sustainability of high yields and the impact of declining crypto prices remain challenges to monitor. The report points to promising developments, such as the integration of real-world assets (RWAs) into lending protocols and the rise of undercollateralized lending models, which could unlock new use cases. DWF Ventures also emphasizes the growing importance of Solana-based lending platforms, which benefit from low transaction costs and high throughput, positioning them as strong competitors to Ethereum-based protocols. The report concludes by touching upon positive tailwinds such as a more favorable regulatory climate and the rapid growth of stablecoins that are accelerating growth, noting: 'These tailwinds not only reinforce lending markets as the backbone of DeFi but also position them to become the fastest-growing sector in the DeFi ecosystem.' The full DWF Ventures lending markets analysis can be read here. DWF Labs is the new generation Web3 investor and market maker, one of the world's largest high-frequency cryptocurrency trading entities, which trades spot and derivatives markets on over 60 top exchanges. Contact Lynn Chia
Yahoo
26-06-2025
- Business
- Yahoo
Newest 'Star' in Sky Ecosystem Launches With $1B Tokenized Credit Strategy
Grove, a new decentralized finance (DeFi) protocol focused on institutional-grade credit infrastructure, emerged from stealth on Wednesday with a $1 billion commitment to a tokenized asset strategy. The protocol aims to bridge DeFi with traditional financial assets by routing on-chain capital into regulated credit investments, focusing on collateralized loan obligations (CLOs). Through its infrastructure, Grove gives crypto-native protocols and asset managers access to real-world asset (RWA) investments, helping them put idle reserves to work and a yield that's independent from crypto markets. The launch also marks Grove's debut as the latest "Star" within the Sky Ecosystem, one of the largest and longest running DeFi lender formerly known as MakerDAO. Sky is undergoing an overhaul called Endgame that breaks the protocol into autonomous units called "stars," each responsible for its own governance and innovation at the edge of the ecosystem. The first such entity was Spark, a yield-earning and borrowing protocol. Sky also issues the $3.7 billion DAI and $3.4 billion USDS stablecoins, and has been increasingly shifting reserves to real-world assets such as tokenized Treasuries. Grove starts out with a $1 billion allocation from Sky that will put into the Janus Henderson Anemoy AAA CLO Strategy (JAAA), a tokenized fund of managed by Janus Henderson and built on Centrifuge, a blockchain platform that specializes in real-world asset tokenization. The core contributor team behind Grove — Mark Phillips, Kevin Chan and Sam Paderewski — had previous experiences at Deloitte, Hildene Capital Management, BlockTower Capital and Citibank before transitioning to DeFi. The protocol was incubated by DeFi specialist Steakhouse Financial, a firm that played a key role in bringing real-world assets into the Sky system. "While tokenized treasuries have paved the way, there's a growing demand for more diversified, high-quality assets on-chain," said Anil Sood, chief strategy and growth officer of Centrifuge. 'With the launch of Grove, for the first time, protocols can access liquid, institutional-grade CLOs while maintaining the flexibility to pivot between DeFi and TradFi yield environments," said Sam Paderewski.
Yahoo
13-05-2025
- Business
- Yahoo
DeFi Savings Protocol Sky Slumps to $5M Loss as USDS Interest Payments Wipe Out Profit
DeFi savings protocol Sky posted a first-quarter loss of $5 million after interest payments to token holders more than doubled, according to a report created by Sky contributors from Steakhouse Financial. The loss is a stark turnaround from the previous quarter, when Sky, formerly known as MakerDAO, registered a $31 million profit. The reason for the 102% increase in interest payments is the decision to incentivize use of the protocol's newer Sky dollar stablecoin (USDS) over the existing DAI. "The Sky Savings Rate was kept very high at 12.5% relative to the rest of the market, driving massive inflows" Rune Christensen, co-founder of Sky, told CoinDesk over Telegram. When Sky began lowering interest rates to 4.5% in February, a lot of investors stuck around, he said. The situation is a double-edged sword for the protocol, which was among the first cohort of decentralized finance apps to spring up on Ethereum in 2017. Sky operates similar to a traditional bank. It needs to lend to others at a rate higher than it pays its savers. However, offering higher rates on USDS without a corresponding increase in demand for the stablecoin is hurting the protocol's profitability, PaperImperium, governance liaison at blockchain research and development company GFX Labs, told CoinDesk over Telegram. "USDS is a major drag on earnings," he said. "DAI makes money. USDS, not so much." The push toward USDS is part of Sky's so-called Endgame plan, an initiative led by Christensen aimed at transforming the protocol into a more decentralized and resilient system. When Sky rebranded from MakerDAO and launched USDS in August as part of Endgame, the plan was that the new stablecoin would appeal to a different set of users than DAI. USDS was designed to better comply with regulations and financial reporting requirements. It was targeted toward sophisticated investors like hedge funds, family offices and other institutions looking to dip their toes into decentralized finance. But it's unclear if USDS has been able to attract a substantial number of new users. The returns investors can earn on USDS comapred to DAI is different: USDS pays out 4.5%, while DAI yields 2.75%. Many investors swapped their DAI for USDS, meaning Sky had pay out more to people who previously were happy to earn a lower yield or, in many cases, no yield at all, PaperImperium said. To be sure, the report said the combined supply of USDS and DAI has increased 57% since the start of the quarter. But a large part of this increase is from Ethena, the synthetic dollar protocol. It has piled over $450 million into staked USDS, and passes the yield on to those who stake its own stablecoin, USDe. Over the past week, Ethena has switched some of its reserves from USDS to USDtb — a stablecoin backed by BlackRock's USD Institutional Digital Liquidity Fund, or BUIDL. The move means there's less USDS in circulation. But it may also benefit Sky by reducing the amount of interest the protocol must pay out. Read more: Sign in to access your portfolio
