Analyst Insight

By auditing the on-chain metrics for DAI on Aave V3, our risk model classifies this as a liquidity-constrained market. High utilisation (94.74%) suggests improved lender yields but potential withdrawal delays.

The current APY of 3.19% is supported by a Total Value Locked (TVL) of $1,291,330. This pool is currently trading 7.4% below the category average. This yield compression often occurs in under-utilised markets.

Risk Context: With a Safety Score of 72/100, this liquidity pool is positioned for active yield farmers monitoring daily volatility.

Yield Mechanics: How It Works

Understanding the underlying engine is vital for assessing sustainability. The 3.19% APY displayed for DAI is primarily derived from interest paid by borrowers on the Aave V3 protocol.

Supply & Demand

When you deposit DAI, you become a liquidity provider. Borrowers pledge collateral (like ETH or BTC) to take out loans. The interest rate fluctuates based on the Utilisation Rate (currently 94.74%). Since utilisation is high, interest rates have increased to encourage repayments and attract new deposits.

Risk Strategy & Management

While Aave V3 is a reputable protocol, no yield is without risk. Based on the current Safety Score of 72/100, the following approac may suit (DYOR):

• Smart Contract Risk: Ensure you are comfortable with the audit history of Aave V3.
• Liquidity Risk: With a TVL of $1,291,330, slippage is a potential concern for whales.
• Strategy: Monitor weekly. Consider diversifying across multiple chains to mitigate protocol-specific risks.

Frequently Asked Questions

Advanced Tools

Enhance your stablecoin yield data analysis with our suite of tools:

• Profit Calculator: Forecast compound interest earnings.
• Safety Audit: Deep dive into the risk factors.
• Liquidity Depth: Analyse market dominance and slippage.