Bitrabo Editorial
MakerDAO, a decentralized money market on Ethereum that allows users to borrow and lend assets, including ETH, spends $27.66 million annually to keep the protocol running, as per DeFiLlama’s data on May 31.
The expenses are utilized to cover costs such as taking care of the 97 individuals responsible for maintaining the lending and borrowing protocol and ensuring that the code operates smoothly without any issues.
Big Expenses Incurred by MakerDAO
As of May 31, MakerDAO had spent slightly over $10.6 million in DAI to meet mounting expenses in 2023 alone.
Employing an algorithmic stablecoin, DAI is minted and managed by MakerDAO, tracking the value of the USD. It differs from other fiat-pegged stablecoins like the USDT or BUSD as it is minted by a decentralized entity.
Of the amount spent, 2,048,873 DAI was allocated for Protocol Engineering, and 15% of total expenses were used for Sustainable Ecosystem Scaling. Increasingly, software expenses have become higher than the forecasted amount. For instance, MakerDAO spent 8,635.78 DAI last month to keep their servers at Amazon Web Services in operation, exceeding the budget by 2,976.68 DAI.
MakerDAO employees receive remuneration and additional benefits from funds allocated to the Protocol Engineering Unit, approved monthly for employee compensation and benefits. LidoDAO, a staking liquidity protocol, on the other hand, requires $16.81 million annually, which is less than half of what MakerDAO consumes.
LidoDAO has the highest DeFi protocol Total Value Locked (TVL), which stood at $13.13 billion as of May 31. In comparison, the TVL of MakerDAO and Aave were $5.33 billion and $13.13 billion, respectively.
This article’s feature image is from Canva, and the chart is from TradingView.