Four Top Resources for Analyzing Dai Markets
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Four Top Resources for Analyzing Dai Markets


This is part two of Maker’s three-part Informed Voting series covering the tools available to best assist MakerDAO governance community voting. Read part one here.

The health of Dai and the Maker Protocol depend, in part, on good governance by the global community of MKR token holders.

Maker voters look to a wide range of factual and data-driven resources to inform their decision-making. These resources include websites and documentation covering all major aspects of the Protocol and the DAO, from suggesting and approving new collateral assets to setting Stability Fees and debt ceilings. 

The first post in the Informed Voting series, 4 Key Tools for Assisting MakerDAO Governance Decision-Making, covered four resources that provide context for Maker voting, including a new tool, the MCD Voting Tracker, which enables users to browse the status of current Governance Polls and Executive Votes, as well as analyze the history of governance activities. This post explores four resources that aggregate exchange information and help Maker voters monitor Dai’s behavior. 

Four Tools to Help Visualize Dai Markets

Crypto exchange data is freely available. Anyone can easily find the price of Dai, for example, at any time. Since market mechanisms of supply and demand influence how the Maker Community acts to maintain the soft peg, it is critical for MKR holders to have access to easy-to-use tooling for observing and reviewing market movements. To aid in that understanding, members of the Maker community turn to websites that enable anyone to analyze Dai across different exchanges and time periods. 

1. Dai.stablecoin.science 

Dai.stablecoin.science filters a robust amount of data into information-rich charts that show the average price of Dai on major centralized and decentralized exchanges over four periods of time: 24 hours, one week, 30 days, and 90 days (dates are in European format, DD/MM). Users can download CSV files (of 30- and 90-day activity only) to get even more detailed info about every trade, including the timestamp, pair (ETH-DAI), exchange, amount (of ETH), and price of ETH in Dai.

The pink dots on each chart show the size of Dai trades against ETH, Dai’s largest market, at various Dai prices, over time. The dark dots signify trades that have been routed to exchanges from other platforms, such as aggregators. 

Dai.stablecoin.science is a tool to help Maker governance analyze Dai markets.
Dai aggregate movements over approximately one month.

In addition to providing Maker voters accurate information on Dai movement, dai.stablecoin.science has become a prime building block that enables developers to create additional resources, one of which is explored below.

2. Dai.descipher.io

Dai.descipher.io parses data from Dai.stablecoin.science to create a histogram displaying Dai’s VWAP (Volume-Weighted Average Price) by exchange for a chosen time period. Users opt for price data to be displayed to the nearest cent or tenth of a cent. 

Dai.descipher.io helps Maker voters analyze info on Dai market trading volumes.
A view of Dai trading volumes by exchange and to the nearest tenth of a cent on Dai.descipher.io.

VWAP captures all trading data for the given period in a single figure, instead of displaying the price as it changes over that time. By presenting aggregated data for each exchange in this way, users can see whether or not Dai has traded close to its peg for the chosen timeframe, and whether outlying prices are associated with particular platforms.

3. Curve Finance

Curve Finance is an automated market maker (AMM) designed primarily for the efficient exchange of stablecoins. The platform allows users to trade stablecoins with very low slippage (the difference between the expected price and actual execution price) compared to other DEXes. It achieves this by using an algorithm or price curve that differs from other AMMs.

While Curve isn’t a Maker community-created resource, it’s one of the largest DeFi platforms, with around 400 million Dai locked in its liquidity pools as of this writing. And thanks to DeFi composability, it’s linked to other DEXes, aggregators, and dapps behind the scenes. Curve is, therefore, an extremely useful indicator of how much Dai might deviate from its peg if larger volumes are bought or sold anywhere in the DeFi space. 

The screenshot below, taken on April 14, 2021, at 8:20 UTC, shows that 100 million Dai could be exchanged for USDC on Curve at an exchange rate of 0.9993 with slippage of 0.07%. 

Maker governance can use Curve Finance to gauge Dai liquidity when analyzing markets.

Maker holders can use Curve as a gauge of current liquidity for Dai, which can help determine how a sudden increase in supply or demand might affect Dai’s price.

4. Block Analitica

Block Analitica, a Maker community-created resource still in development, offers a visualization of Dai liquidity. The tool pulls data from 1inch, a popular aggregator linked to exchanges and liquidity pools across the DeFi space, to show how much slippage could occur if various amounts of Dai were sold for USDC on the current day compared to one week earlier.

The screenshot below shows that exchanging 200 million Dai for USDC on April 14, 2021, could result in nearly 0.05% slippage, meaning that almost $100,000 could be lost as a result of the transaction.

1618421734 260 Four Top Resources for Analyzing Dai Markets
Block Analitica provides a visualization of the efficiency of exchanging large amounts of Dai for USDC.

The resource also offers a calculator that shows the amount of Dai (and each collateral asset) that would need to be traded before a certain slippage point is reached, and other Maker-specific tools.

Voting Informed by Up-to-the-Minute Data 

The MakerDAO governance community can vote to change incentives that impact supply and demand of Dai in order to maintain price stability. Having access to accurate, up-to-date Dai market information is critical to informed decision-making. To learn more about Maker’s open governance process, join in the many conversations on the MakerDAO forum.

The final post in the Informed Voting series will explore a range of tools for understanding Maker Vault Liquidations, a key means by which the Protocol maintains adequate Dai collateralization.



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