Rolling the DAI-ce: MEV activity is leading the surge
Quick Take
- Last week, DAI did over $50 billion in transfers on-chain, with the $86 billion of volume on April 17 marking the highest day of volume for the stablecoin ever.
- This is an excerpt from The Block’s Data & Insights newsletter.
If you are a close follower of the stablecoin market, then you might have noticed a significant uptick in DAI activity on Ethereum over the last few days.
On both April 17 and April 18, DAI did over $50 billion in transfers on-chain, with the $86 billion of volume on April 17 marking the highest day of volume for the stablecoin ever.
It was a sharp jump compared to the often less than $10 billion of activity we had seen earlier in the month.
But we have talked about DAI before in the context of its on-chain volumes growing. From December 2022 through October 2023 it was more common to see at most $5 billion of DAI activity a day, but DAI volumes then began to pick up as the stablecoin was increasingly being used in complex MEV transactions.
Chart courtesy of The Block Pro
That MEV activity seems to be the main driver of the surge here, too. Take, for example, transaction 0x447. In this transaction, just under $200 million worth of DAI was minted, sent to Aave, taken out of Aave, sent to the Maker Flash contract, and then burned, resulting in almost $1 billion worth of DAI volume in a single transaction.
The flash mint module from Maker allows users to mint DAI (up to a certain limit) on the condition that they pay it all back within the same transaction and also provide a small fee. Usage of this module has become extremely popular since it allows arbitrageurs and MEV bots to gain access to large amounts of money without much cost.
Another example of one of these transactions is 0x160, which was also done by the same MEV bot, 0x5ed...a9f. Looking at the activity on this address, we can see that they really picked up in action April 17-18, engaging in 254 and 256 transactions on each of those days, respectively, compared to the previous high in daily transactions of 63 set earlier in April.
According to EigenPhi, a tool for tracking MEV data, the bot made just under $20,000 on both days but actually made over $20,000 on April 19, despite the bot’s activity slowing down.
This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry’s most thought-provoking trends.
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