Maker Protocol, a leading stablecoin issuer on the Ethereum platform, reported a record annualized revenue of $203 million on October 19. This significant milestone has been influenced, in part, by the rise in U.S. treasury yields this year. Besides, Maker’s stablecoin, DAI, saw its supply shoot to a new yearly high at $5.6 billion. However, another compelling factor is MakerDAO’s soaring real-world asset (RWA) deposits, which have now reached $3 billion.
Maker earns revenue primarily through fees. These fees are paid by users who borrow DAI or earn in case of liquidation of a borrowing position. Additionally, a surge in tokenized RWA deposits for minting DAI has contributed to this revenue upswing. According to data from DeFiLlama, these RWA deposits make up 42.7% of Maker Protocol’s total deposits, which stand at $7.54 billion.
Yield opportunities boost DAI supply
Yield opportunities have also played a pivotal role in the uptick of Maker’s stablecoin DAI. The DAI Savings Rate (DSR) mechanism via the Spark Protocol provides an annual yield rate of 5% for DAI holders. This mechanism has amplified the demand for DAI and has led to the sDAI supply increasing fivefold since August. Specifically, the sDAI accounts for 31.3% of DAI’s total supply at $1.7 billion.
Maker’s ex-real-world finance lead Sébastien Derivaux stated that MakerDAO is “reaping the benefits of years of work on RWA.” He added that the revenues would see further growth if Treasury bill yields continue to rise. Treasury bills are offering a robust 5% yield as the Federal Reserve hikes interest rates to combat inflation. Significantly, two vaults, Monetalis Clydesdale and BlockTower Andromeda, hold more than three-quarters of RWA deposits in Maker Protocol. These vaults mainly purchase short-dated U.S. Treasury notes.
Moreover, the launch of sDAI on Gnosis Chain last week has given another boost to DSR deposits. Since its deployment on October 9, the Spark Protocol’s supply has seen an increase from $20 million to nearly $50 million. Consequently, holders can now deposit sDAI into DeFi protocols on the Gnosis Chain for enhanced yields.
The record figures, aided by RWA and U.S. treasury yields, underscore Maker Protocol’s strong performance in an increasingly competitive market. These milestones reflect the protocol’s strategic moves in attracting more collateral and offering higher yields, which in turn enhances its overall financial health.