DYAD, a decentralized stablecoin protocol launched more than a year ago, saw its total value locked (TVL) explode over 950% over the past month. On August 5, it had $3.3 million locked in its pools. Today, its TVL has surged to a record $35 million.
DYAD is an Ethereum-based stablecoin platform using a Maker-like collateralized debt position (CDP) model. It enables users to deposit Wrapped Ethereum (WETH), Wrapped stETH (wstETH), and other tokens to mint DYAD, which tracks the value of the US dollar. As a rule, the collateral’s value should exceed the minted stablecoins based on a ratio of 150%. This ratio can be reduced to 100% by staking the native token, Kerosene (KERO).
Investor interest in the stablecoin has increased due to DYAD’s generous yields. After minting DYAD, users can provide liquidity to the USDC/DYAD pair on Uniswap v3, targeting an annual percentage rate (APR) of over 45%. Rewards are paid in KERO.
DYAD’s token inflows started to explode at the end of August, hitting a record $8.43 million on August 29.
WETH has become the most deposited token, with record daily inflows of $6.7 million on August 29. It surpassed wstETH at the end of August and currently accounts for over 53% of token value deposited on the platform.
Since Kerosene is needed to mint DYAD and reduce the collateral ratio, its price has been driven by the surge in DYAD liquidity. CoinGecko data shows that the price of KERO has increased by about 1,000% within a few weeks – from $0.019 on August 5 to a record $0.35 on August 30.
DYAD’s TVL increase has defied the broader decentralized finance (DeFi) market, which is struggling at the beginning of September. All of the top 40 DeFi protocols have experienced a decline in TVL, except for Binance staked ETH, which added 0.4%.
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