The battle between Ether and USDC for dominance as the main reserve currency of the DAI stablecoin ended in victory for ETH. The level of DAI backing with USDC stablecoin decreased from 50% to 34.5%.
According to the analytical resource Dai Stats, at the time of publication, the share of support for DAI on air increased to 41.4%, while the share of USDC fell to 34.5%. This indicates a decrease in the dependence of stablecoin on centralized companies.
The USDC stablecoin is operated by the Center consortium formed by Circle and Coinbase. These companies maintain the value of the stablecoin by using a reserve in US dollars and other financial instruments pegged to the dollar. In July 2020, the consortium froze the Ethereum address containing $ 100,000 worth of stablecoins in cooperation with law enforcement agencies. Ether is not supported by fiat currency – it is a decentralized cryptocurrency, the value of which is determined by the market. It is almost impossible to stop transactions on the Ethereum blockchain.
Previously, the backing of the DAI stablecoin consisted of decentralized assets such as ether. In the aftermath of the pandemic crisis, the stablecoin protocol needed the backing of a stable asset. In March 2020, the MakerDAO community voted to partially support DAI with USDC. Over time, the share of collateral in USDC has grown and the decentralized stablecoin has effectively become centralized. By the end of the year, the DAI stablecoin regained its title of the most decentralized stablecoin.
By the end of 2020, MakerDAO added LINK, LRC and COMP to ensure DAI stabilization. In April 2021, MakerDAO voted to diversify the DAI stablecoin collateral.
