Messari: Maker’s Profit Expectation Drops From $80M to Below $2M

• Maker’s profit expectations dropped from $80 million to under $2 million.
• Profit expectations dropped after introducing the Enhanced DAI Savings Rate (EDSR).
• The EDSR was introduced to boost DAI supply and increase DSR adoption.

Leading crypto market intelligence platform, Messari observed that Maker’s profit expectations dropped from $80 million to under $2 million after introducing the Enhanced DAI Savings Rate (EDSR). According to Kunal Goel, research specialist at Messari, Maker’s expected profits were on a run-rate of $80 million for the next 12 months but have reduced to below $2 million.

Goel explained the EDSR was introduced to boost DAI supply and increase DSR adoption. It has succeeded in that aspect with a $900 million growth in DAI supply and a $1 billion growth in DSR deposits. However, Goel noted that despite the evaporated profits, a new proposal would adjust the EDSR and bring back the profits.

According to Goel, the profits are likely to return, with DSR adoption remaining below 66% and a constant DAI supply. He explained this using a screenshot of the tabulated projection of Maker’s net income after upcoming changes to the EDSR.

Some respondents to Goel’s analysis expressed worries over the development. A Twitter user identified as BhramhandChain said he moved his DAI off EDSR to avoid falling victim to a similar scenario like the infamous Luna crash.

Rune, a co-founder of MakerDAO, responded to BhramhandChain by explaining that collateral backs all the DAI on Maker’s network. However, he noted that no collateral is completely risk-free, but there is a significant difference between having something with real, diversified collateral vs something with literally no collateral at all.

The co-founder also shared a summary of Maker’s collateralization, showing a collateralized ratio of 173%, with over $8.9 billion in Total Value Locked (TVL).

MakerDAO is a decentralized protocol that enables the generation of DAI, one of the leading stablecoins in the crypto industry.