Evaluating why DAI is almost winning the Stablecoin replacement battle
- Large addresses have been looking to DAI as an alternative to other stablecoins.
- Although the supply increased, the coin still faces rivalry.
Since the broader crypto market experienced drawbacks in the last few weeks, many investors have been taking positions by accumulating stablecoins.
For some, the price correction presents a chance for potential gains in the future. For others, it was not yet the season to spot an opportunity.
How much are 1,10,100 DAIs worth today?
Usually, Tether [USDT] takes the biggest share of this action. And the same stablecoin tops the standing when profit-taking occurs. However, the decentralized stablecoin DAI could be capturing some ground based on the recent actions of whales and sharks.
DAI has the support of the sea kings
According to Santiment, a lot of deep-pocketed addresses have been exchanging Bitcoin [BTC], and Ethereum [ETH] for DAI since mid-March.
This activity has increased such that addresses holding 100,000 to 10 million DAI have increased supply by 6.4%.
?? Even with #crypto markets rollercoastering in April, top #stablecoins like $DAI are being accumulated by sharks & whales. Since $DAI was exchanged for pumping $BTC & $ETH in mid-March, $100k-$10m DAI addresses have added 6.4% of the supply back since. https://t.co/JfQREYLKpW pic.twitter.com/r6zqXb7zo1
— Santiment (@santimentfeed) April 24, 2023
Surely, this was an indication that investors were already looking for a Binance USD [BUSD] replacement which was in its phasing-out stage.
Although the centralized stablecoin still had a larger market cap than DAI, this development might increase DAI’s chances of becoming the major alternative to USDT and Circle [USDC].
Still, there are problems to tackle
But as it stands, it might seem that whales do not have the support of the retail market with the use of DAI. This was because on-chain data showed that the 30-day active addresses which reached 81,800 around the first week of April, had decreased.
Looking at the metric at press time, Santiment showed that it was down to 49,800. Active addresses act as an indicator of wallets involved with transacting an asset.
When the metric rises, it means that crypto traders are showing increased interest. But since the active addresses had reduced, it implies that the general transfers using the stablecoin were low.
As per the weighted sentiment, Santiment data showed that the metric had fallen into the negative zone. At –0.341, the metric suggests that the aura around the coin was more of pessimism than elation.
Realistic or not, here’s DAI’s market cap in USDC’s terms
Furthermore, the overall number of holders with DAI in their portfolio had increased. Since a decline to 479,000 on 13 March, many have accumulated with on-chain data putting the number at 503,000.
However, DAI’s multi-collateral supply had severely tanked. The metric, which measures how investors are borrowing and lending with the stablecoin on MakerDAO [MKR] was -657.95 million.
Nonetheless. DAI might still have more to fight for in the stablecoin war.