MakerDAO: DeFi’s Priciest Project

MakerDAO (MKR) spends $27.66 million annually on network operation maintenance.

DefiLlama recently opened an “Expenses” panel featuring decentralized finance (DeFi) projects. A lot of the data is still in closed access, but we can start drawing some initial conclusions.

More importantly, this data underscores the substantial financial resources required for the operations of DeFi projects.

Popular staking provider Lido (LDO) is in second place among annual expenses. The company spends $16.81 million. In third place is Maple (MPL) with $8.54 million.

DeFi project spending. Source: DefiLlama

What were MakerDAO’s expenses focused on in 2023

Cryptomode highlighted oracles as a potential top crypto narrative in 2024, citing their growing importance in DeFi development and other factors.

Smart contracts require assistance to gather and process external data. Decentralized platforms rely on oracles to update information about token rates, volume, liquidity, and more, as this data is dispersed across various platforms. Oracles play a crucial role in aggregating this information for smart contract functionality.

According to MakerDAO, most of the budget is allocated for these oracles. The company spends 4,119,933 DAI on it, which is 24%. Notably, a minor fraction of the budget, specifically 2%, is earmarked for development, totaling 537,448 DAI.

The most substantial category for expenses is compensation and benefits, likely designated for the company’s employees. MakerDAO spends 10,091 DAI on this.

MakerDAO’s budget in 2023. Source: expenses.makerdao.network

Professional services, ranking second in expenses, account for a significant portion, with MakerDAO allocating 2,986,307 DAI to this category.

MakerDAO’s total spending for 2023 is 16,591,329 DAI.

Lido to prioritize spending on marketing

Lido (LDO) spends $16.81 million annually, with most of the budget directed toward business development. During 2023, the company spent $795,000 for this purpose.

Lido expenses. Source: research.lido.fi

In second place is spending on node maintenance. Lido gives $646,520 for this segment. Interestingly, the third part of the budget is allocated for marketing – $546,000.

Despite Lido’s lower annual expenses than MakerDAO, the project’s native token holds a higher market cap ranking, securing the 34th position. In contrast, MakerDAO’s token is ranked 44th. 

Despite being the third-highest spender, Maple holds a considerably lower market capitalization rank, standing at 515th. As such, its overall expenses carry a very different weight in terms of long-term sustainability.