The amount of DAI on-chain has been eclipsed by the amount of DAI locked in the Compound Finance (COMP) protocol. Dan Yanev, COO of the DeversiFi exchange, pointed out the interesting development on Twitter on July 3, which can be confirmed by taking a look at the DAI stablecoin metrics on Daistats and Compound Finance’s reported DAI supply.
In fact, the amount of DAI on Ethereum is roughly $174 million, while the amount of DAI on the Compound protocol is over 5 times as much at approximately $593 million. This is an unusual development, as the total supply of DAI is only 175.69 million. In other words, the amount of DAI on Compound exceeds the total amount of DAI in existence.
One explanation for this aberration is that users are simply re-depositing borrowed DAI, repeating this process, with each addition adding to the total number of DAI locked in.
Investors have quickly taken to protocols like that of Compound to take advantage of profit opportunities, and Compound has reworked its system to ensure that no one can “game the system.” Compound approved a change to alter the market rules for the Basic Attention Token (BAT) as it quickly held interest rates much higher than any of the other assets.
Compound’s arrival on the market has upended the defi space, setting off a number of yield farming programs while also becoming the largest token, even surpassing Maker (MKR) in total locked in value.