75% of MakerDAO’s TVL increase fueled by token price growth

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Total value locked in dollars delivers a distorted view of DeFi

Total value locked has been the most important metric in the DeFi space for some time but frequently receives criticism. It is argued by DappRadar that total value locked in dollars can deliver a distorted picture of the DeFi ecosystem.

Within this overview, we will analyze one of the biggest DeFi protocols right now, MakerDAO. Inflation-adjusted total value locked will be considered.

The inflation-adjusted TVL might uncover the real growth of the protocol excluding fluctuation in the token price.

Key takeaways

  • The total value locked on MakerDAO surpassed $1.5 billion.
  • ETH accounts for 73% of the total value locked on MakerDAO.
  • The top 3 tokens (ETH, MKR, and WBTC) hold 97% of TVL.
  • The total value locked in the top 3 tokens on MakerDAO increased by almost $800 million.
  • The inflation-adjusted value showed an increase of only $200 million.
  • 75% of the total value locked increase on MakerDAO was fueled by price increases in the top 3 tokens.


Two metrics are going to be analyzed. Total value locked and inflation-adjusted total value locked.

Within this article, the inflation-adjusted total value locked is calculated by locking the token price value at the same level as ninety days before 2020-08-17. The prices are collected from coinmarketcap.com.

MakerDAO TVL surpasses $1.5 billion

MakerDAO is responsible for 24% of the total value generated in the DeFi space right now according to DappRadar. Within the last month, the protocol reclaimed its leadership position surpassing $1 billion in total value locked.

We see value increasing steadily and reaching $1.5 billion at the time of writing, having grown by 110% within a thirty day period.

ETH accounts for 73% of TVL on MakerDAO

Although MakerDAO has already included 9 types of collateral, ETH is still the most used one. ETH accounts for around 73% of the total value locked in MakerDAO now.

MKR and wBTC tokens are the other two top tokens locked on MakerDAO. MKR holds 17% while wBTC 8% of total value locked.

Looking at the development of each of the top 3 tokens we witness a huge peak from mid-July 2020. Notably, the ETH value locked increased by 131% or more than $620 million in 30 days.

The other two tokens followed with similar surges but haven’t increased that considerably. WBTC increased by $94 million, while MKR around $78 million within a 30 days period.

While the figures look impressive, there are some doubts. All 3 tokens faced an increase in value within the 30 days period. It raises the question, how extensively token price affected the TVL metric.


Inflation-adjusted TVL – ETH

ETH is the number one collateral and oldest asset in MakerDAO. The asset makes a huge impact on TVL right now. 

As we already mentioned above, ETH increased its total value to more than $620 million in just 30 days. If looking at the inflation-adjusted total value locked the increase is six times lower. The inflation-adjusted value locked increase is only around $111 million. 

Apparently, ETH price has a way bigger impact on the value. ETH’s price increased from $232 to $434. Almost double what it was 30 days ago.


Inflation-adjusted TVL – MKR

MKR was one of the first governance tokens in the blockchain industry. The token helps to support the stability of the DAI token and make key decisions on the protocol. In order to possess voting rights, MKR should be locked.

As already stated, within a 30 day period the total value locked in dollars increased by $78 million. On the other hand, the inflation-adjusted TVL seems to be decreasing. The value decreased by $15 million dollars or 12% within 30 days.

Obviously, within the 30 days period, MKR TVL was impacted only by the price jump. The price of MKR 30 days ago was $449 and now it’s $689.


Inflation-adjusted TVL- wBTC

In early May 2020, wBTC was added as a fourth collateral asset in MakerDAO. This is used in addition to ETH, BAT, and USDC to open Maker Vaults in order to generate DAI. 

Different from the other top 2 tokens, wBTC adjusted value presents an increasing trend. Adjusted, the total value locked increased by 170%. Within a 30 day period, an additional 7,000 BTC was locked in MakerDAO.

Although the price has some effect on the value locked, the biggest impact came from additional assets added to the protocol.


Total value locked in dollars can deliver a distorted view of the development occurring within the DeFi category.

Using TVL alone we see an increase of around $800 million within the top 3 tokens (ETH, MKR, and WBTC) on MakerDAO.

Taking into account inflation-adjusted TVL. The increase was not more than $200 million. Which is 4 times lower than is being reported. 

75% of the total value locked increase on MakerDAO was fueled by increases in the top 3 token prices.


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