MakerDAO Revenue Drops 86% on Ether and Wrapped BTC Issues
Messari research shows MakerDAO suffered its first quarter of net income loss since 2020 following a sharp decline in loan demand and a few liquidations.
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MakerDAO, the governing body of Maker Protocol, saw its revenue plummet in Q3 2022, due to lower loan demand and some liquidations, while spending remained high.
According to an Oct. 13 tweet from Johnny_TVL, a Messari analyst and co-author of "The State of Maker Q3 2022," the decentralized autonomous organization saw its revenue dip to just over $4 million in third quarter, down 86% from the previous quarter.
One result of this has been MakerDAO's first quarter net revenue loss since 2020.
MakerDAO Statement of Value as of September 30, 2022. Source: MessariMessari's senior research analyst cited few liquidations and low demand for loans as the reasons for the decline in revenue.
Its two biggest earners, Ether (ETH) and Wrapped Bitcoin (wBTC), performed poorly in the last quarter, with ETH-based asset earnings falling 74% and asset-based earnings on BTC by 66%.
Borrowers use these cryptocurrencies as collateral for loans from the stablecoin Dai (DAI), providing some security against the volatility often seen in cryptocurrency markets at the cost of interest paid on the loans.
Quarterly creator earnings per collateral token. Source: MessariThe analyst also pointed to a drop in MakerDAO's collateral ratio, suggesting the ratio fell to 1.1 from 1.9 in the same time of year last.
However, "spending is not that elastic," the analyst said, with the report showing spending remained high in the quarter at $13.5 million, down just 16% from in the previous quarter.
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Messari research shows MakerDAO suffered its first quarter of net income loss since 2020 following a sharp decline in loan demand and a few liquidations.
New
MakerDAO, the governing body of Maker Protocol, saw its revenue plummet in Q3 2022, due to lower loan demand and some liquidations, while spending remained high.
According to an Oct. 13 tweet from Johnny_TVL, a Messari analyst and co-author of "The State of Maker Q3 2022," the decentralized autonomous organization saw its revenue dip to just over $4 million in third quarter, down 86% from the previous quarter.
One result of this has been MakerDAO's first quarter net revenue loss since 2020.
MakerDAO Statement of Value as of September 30, 2022. Source: MessariMessari's senior research analyst cited few liquidations and low demand for loans as the reasons for the decline in revenue.
Its two biggest earners, Ether (ETH) and Wrapped Bitcoin (wBTC), performed poorly in the last quarter, with ETH-based asset earnings falling 74% and asset-based earnings on BTC by 66%.
Borrowers use these cryptocurrencies as collateral for loans from the stablecoin Dai (DAI), providing some security against the volatility often seen in cryptocurrency markets at the cost of interest paid on the loans.
Quarterly creator earnings per collateral token. Source: MessariThe analyst also pointed to a drop in MakerDAO's collateral ratio, suggesting the ratio fell to 1.1 from 1.9 in the same time of year last.
However, "spending is not that elastic," the analyst said, with the report showing spending remained high in the quarter at $13.5 million, down just 16% from in the previous quarter.
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