Maker community thanks yEarn for seemingly restoring DAI peg – Cointelegraph

A new vault launched on yearn.finance is being credited for finally restoring the peg of Dai (DAI), the algorithmic stablecoin of the MakerDAO (MKR) project.

As Cointelegraph previously reported, Maker had struggled with maintaining a strict $1 peg for DAI since the start of the yield farming wars in June. 

Though it’s had ups and downs, the price of DAI consistently hovered around $1.02 in the past 30 days. As of press time, the price came down to $1.

The community is crediting the yearn.finance project, which launched a new yield farming strategy that relies on minting DAI to farm the Curve token, CRV. The yETH vault, which executes this strategy, quickly rose in popularity and created 10% of DAI’s current circulating supply.

The reason for that appears to be the high yield of the strategy, amounting to 93% yearly interest rate as of press time. In essence, the vault takes Ether (ETH), uses it to mint DAI, then sends that DAI to the Curve yCRV pool, a mixed stablecoin pool composed of DAI, USD Coin (USDC), TrueUSD (TUSD) and Tether (USDT). 

That entitles the vault to both the trading fees obtained from other users swapping their stablecoins to one another, and any CRV tokens airdropped to this pool. Their combination is what produces the 93% yield — high by traditional standards but quite low compared to some other yield
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