Dai is a stablecoin pegged with the US dollar form the Maker Decentralized Autonomous Organization. Unlike other stablecoins such as Tether (USDT), Dai is not actually backed by dollars in a vault. It is backed by collateral that causes its supply to fluctuate. Tether has a lot trust issues, as the firm can mint the token with no proof of backing besides their word. The value of Dai only increases when the collateral staked on the network increases, and the majority of that collateral is Ethereum (ETH).
As decentralized finance grows, the amount of Ether locked in the system also surges. This is why a considerable increase in the price of Dai is also positive for Ethereum (ETH). According to data from Defipulse.com, there is presently more than $650 million locked in DeFi. The figure is also approaching its all-time high of $685 million, which happened in June this year.
About 2.42 million Ether, which makes 2.2 percent of the entire ETH supply, are locked in DeFi. According to Defipulse.com, Dai worth about $30 million is stored in DeFi, which is about 30 percent of its entire supply, now that it has hit the milestone of $100 million.
The lending platform of Maker is presently the market leader, with about 53 percent share. MKR is one of the top-performing altcoins this month, with an increase of more than 26 percent in just over a week.