Messari research shows that MakerDAO experienced its first quarter of net revenue loss since 2020 after a big drop in loan demand and few payoffs.

MakerDAO, the governing body of the Maker Protocol, saw its revenues fall in the third quarter of 2022, due to a drop in loan demand and few settlements, while expenses 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 (DAO) saw its revenue drop to just over $4 million in Q3, an 86 percent. % less than the previous quarter.

One result of this was MakerDAO’s loss of Q1 net income from 2020.

MakerDAO Statement of Values ​​as of September 30, 2022. Source: Messari
Messari’s senior research analyst pointed to poor settlements and weak loan demand as the reasons for the drop in revenue.

Your two biggest earners, Ether

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and Wrapped Bitcoin (wBTC), performed poorly last quarter, with revenue from ETH-based assets down 74% and revenue from BTC-based assets down 66%.

Borrowers use these cryptocurrencies as collateral for Dai loans

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stable currency, a bit of safety from the volatility often seen in cryptocurrency markets, at the expense of interest on loans.

Generate quarterly income through collateral tokens. Source: Mesari
The analyst also noted a drop in the MakerDAO collateral index, suggesting that the index fell to 1.1 from 1.9 in the same period last year.

However, “costs aren’t that elastic,” the analyst said, with the report showing spending in the quarter remained high at $13.5 million, falling just 16% from the previous quarter.

Related: Nexo Tagged Address Withdraws $153M In Wrapped BTC From MakerDAO

Meanwhile, MakerDAO recently took steps to boost returns on the assets it holds as collateral, after launching a proposal to invest $500 million in bonds and Treasuries. MakerDAO believes this will provide the protocol with additional low-risk performance.

Another positive for MakerDAO was the growth of Real World Asset (RWA)-backed loans, now accounting for 12% of its total revenue after it successfully launched its largest RWA-backed loan to Huntingdon Valley Bank (HVB). in the third trimester. as of 2022.

The loan, which involved the creation of a vault with 100 million DAI, represents a new collateral requirement in the Maker protocol, which can help generate additional revenue through vault stability fees associated with maintaining the vault. and the minting of DAI.

HVB can still benefit from this integration as it allows the bank to effectively increase its legal lending limit, and MakerDAO hopes that if all goes well, other banks will follow HVB.

Source: CoinTelegraph