Disclosures: This content is for informational purposes only. You should not purchase any tokens based solely on this information. This is not financial advice.

Key Takeaways:

  • The Peg Stability Module (PSM) is a specialized Maker vault designed to fix key flaws with DAI’s arbitrage process. The PSM has had a positive effect on DAI by dampening volatility. It holds over $130 million in assets and has generated $140,000 in fees for Maker since launching in Dec. 2020.
  • Maker’s revenues grow and contract alongside the ETH-A stability fee as ETH accounts for 60% of all DAI loans. Maker’s monthly revenues have grown from under $10,000 in August 2020 to nearly $5 million in February 2021 thanks to the increase in the ETH stability fee.
  • Compared to levels seen roughly 6 months ago, MKR is trading at an attractive price-to-sales ratio.
  • MakerDAO is able to use the bulk of its revenue to burn DAI. However, MakerDAO will soon take on the financial burden of operating expenses. This could deteriorate MKR’s value accrual in the short-term.
  • Maker’s burn rate is back in positive territory after turning negative in March 2020. Maker’s business model has shown resiliency after the events of March 2020. There’s always demand for leverage, and Maker will continue generating cash flows so long as stability fees remain positive and DAI is useful.

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