DAI Tops $70 Million, ~2 Million ETH Collateralized

22w
5m read
Summary

Some ethereans say people just lock eth, get dai, buy more eth with it, lock that eth, in a loop. That would explain why dai’s market cap hasn’t really moved despite eth’s price fall in what appears to be the very first instance of such behavior. The algorithmically dollar pegged token usually sees a decrease in its market cap (pictured above) in line with a decrease in eth’s price, but not this time. If eth’s price increases, instead, then you have $400 plus whatever % increase. On the other hand, an eth substitute is as easy as changing a comma somewhere and walla, eth classic squared.

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While ethereum’s price recently dropped by 25% from $160 to $120, dai didn’t move much for the first time since it launched a year ago.

The algorithmically dollar pegged token usually sees a decrease in its market cap (pictured above) in line with a decrease in eth’s price, but not this time.

That perhaps suggests the collateralizers – who perhaps can better be called the eth depositors – are becoming more sophisticated.

As a very new thing launched at the height of the December 2017 euphoria, ethereans necessarily needed some time to get their head around this unique collateralization system.

Is it just a margin, is it a loan, is it a hedging tool, is it a bank? Where are the arbitrage points? Can I profit from just the peth/weth difference? Is it safe? What is its real use?

Some ethereans say people just lock eth, get dai, buy more eth with it, lock that eth, in a loop. The stats, however, show...

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