MakerDAO Revenue Decreased By $4 Million In Q3

MakerDAO, the Maker Protocol’s governing body, had its revenue decrease in the third quarter of 2022 due to a drop in loan demand and few liquidations, while costs remained high.

According to Johnny TVL, a Messari analyst and co-author of The State of Maker Q3 2022, the decentralized autonomous organization (DAO) witnessed its income drop to a little over $4 million in Q3, down 86% from the previous quarter, in an October 13 tweet.

One of the consequences has been MakerDAO’s first net income loss since 2020.

The explanation for the income decline, according to the Messari senior research analyst, is a lack of liquidations and sluggish lending demand.

Its two major income generators, Ether and Wrapped Bitcoin (wBTC) have underperformed in the previous quarter, with revenue from ETH-based assets plummeting 74% and revenue from BTC-based assets declining 66%.

Borrowers utilize these cryptocurrencies as collateral for DAI stablecoin loans, offering some protection against the volatility found in cryptocurrency markets at the cost of interest paid on the loans.

The analyst also mentioned a decrease in MakerDAO’s collateral ratio, which dropped to 1.1 from 1.9 at the same time last year.

However, expenses are not so elastic, according to the analyst, with the report revealing that expenses were $13.5 million in the quarter, down just 16% from the previous quarter.

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