MakerDAO, a decentralized cash marketplace on Ethereum for users to borrow and lend assets, including ETH, spends $27.66 million annually to keep the protocol working, DeFiLlama data On May 31st offers.
This amount of money is used for expenses such as taking care of the 97 individuals who are responsible for maintaining the lending and borrowing protocol and ensuring that the code runs smoothly without any issues.
MakerDAO has a big expense
As of May 31, MakerDAO has spent just over $10.6 million in DAI to cover increased expenses in 2023 alone. DAI is the computational stablecoin minted and managed by MakerDAO, tracking the value of the US dollar.
It differs from other popular stablecoins such as USDT or BUSD, which are minted by a central entity that demands that each token in circulation be backed by an equal amount of fiat currencies, primarily the US dollar.
To date, $10.6 million has been spent in DAI. Of this amount, 2,048,873 DAI was allocated for protocol engineering, and 15% of the total expenditure was used for sustainable ecosystem scaling.
385,875 DAI was used for strategic financing, 537,448 DAI for growth, and 811,704 DAI for Oracles. Another 903459 DAI went to the development and improvement of the user interface.
Employees receive bonuses and other benefits from the funds allocated to the Protocol Engineering Unit. The current monthly budget is 624,165 DAI and is expected to decrease to 475,089.13 DAI.
Specifically, MakerDAO has approved 396,895.13 DAI per month for employee compensation and benefits. Only 2,072 DAI was consumed by travel and other entertainment.
However, besides spending on employee salaries and fringe benefits, the DAO authorized 75,250 DAI as payment for professional services.
The Protocol Engineering module does not work with an external validator. For the sake of transparency, they must submit an expense report to the MakerDAO community for evaluation and approval on a monthly basis.
Under “Development and User Interface,” software expenses are calculated noticeable increase, exceeding the expected amount. Last month, MakerDAO spent 8,635.78 DAI to keep its servers running Amazon Web Services, exceeding budget by 2,976.68 DAI.
LidoDAO requires $16.81 million each year
The money used to keep MakerDAO running is about $10 million more than the amount needed to keep Aave and Lido going. The data shows that Aave and Lido need $19.2 million and $16.81 million to run.
The difference could be due to the number of employees since MakerDAO has 97 recognized employees while Lido has 83. Aave’s employee number remains private.
However, Lido, a staking liquidity protocol, is the largest DeFi protocol by total value locked (TVL). As of May 31, LidoDAO had a TVL of $13.13 billion, double that of MakerDAO, and three times the TVL of Aave, which was $5.33 billion.
Featured image from Canva, chart from TradingView
