DAI collateral ratio has been dropping a lot

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Collateral ratio was around 155% last time I checked, now it’s 124%

What is the risk of depegging if things move fast? What happens when it goes below 100%

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3 thoughts on “DAI collateral ratio has been dropping a lot”

  1. This is mostly a factor of USDC and USDP becoming a larger share of the collateral. The chart you included shows centralized stablecoins being 78.1% of all collateral.

    At this point DAI is pretty much wrapped USDC…

    The reason why the collateral ratio is lower is because stablecoins are collateralized at 100% (1 USDC mints 1 DAI) while ETH and BTC are over-collateralized ($2 worth of ETH mint 1 DAI)

    Some napkin math shows that the 22% non-stablecoin collateral must be overcollateralized by 200% in order to reach the 124% collateral ratio figure, which is pretty good.

    You can check the liquidation prices for all DAI vaults here: https://maker.blockanalitica.com/vaults/at-risk/

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  2. It was so much better when only eth was collateral. Instead of being confined just to Etherium, the whole thing depends on entire market now. Not too smart. In my opinion of course.

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