MakerDao’s Short (and Long) Term Fixes for Dai’s Broken Peg – CoinDesk – Coindesk


  • As traders gobble up stablecoins for yield farming, demand for MakerDAO’s dai (DAI) has sent the stablecoin’s peg skyward.
  • The yield farming demand continues to put pressure on dai’s $1 peg, which has been under consistent stress since Black Thursday when market volatility sent dai’s price to $1.10.
  • MakerDAO’s community is debating some tweaks to its monetary policy to restore the peg, though Maker’s creator believes the only long-term solution is adding additional, varied collateral to the DAO.

Booming demand for stablecoins in DeFi’s yield farming landscape is breaking the peg for Ethereum’s only crypto-collateralized stablecoin. The Maker community is searching for a solution to drive the peg back down, but not everyone is sold that these solutions will work long-term.

MakerDAO’s dai, which uses ether, stablecoins and tokens as collateral to retain a $1 price point, is trading above its targeted peg. At time of publication, dai is trading at $1.04.

It’s not uncommon for dai to fluctuate above or below this price point. But the peg’s recent upwards drift, which continues a trend that began in March as market volatility led to a trading flight into stablecoins, is likely in response to growing demand for stablecoins in Ethereum’s blossoming yield farming market. 

“The whole yield farming craze – and explosion in DeFi in general – has really impacted the peg a lot in the short run. The community responded