April witnessed an unprecedented surge in total monthly stablecoin volume on the Ethereum network, marking a notable departure from months of relatively stagnant activity. The cumulative volume of stablecoins experienced a remarkable uptick for the third consecutive month, culminating in a historic milestone for the ecosystem.

However, it's essential to acknowledge a crucial caveat in this data: the inclusion of flash loan activity, rather than its exclusion. Even without factoring in flash loan transactions, stablecoin volume demonstrated robust performance, with FDUSD achieving its highest monthly volume on record, albeit marginally below March's level when filtered for flash loan activity.

Yet, the inclusion of flash loan transactions reveals the true magnitude of Ethereum's stablecoin volume surge, driven primarily by one stablecoin: DAI. As reported previously by The Block, DAI has emerged as a pivotal player in complex Miner Extractable Value (MEV) transactions, frequently involving flash loans that enable the minting and swift return of large quantities of DAI within a single transaction. Notably, a single such transaction contributed nearly one billion dollars to DAI's volume alone.

In April, DAI's volume soared to $636 billion, constituting the lion's share of Ethereum's total on-chain stablecoin volume, which approached $1.2 trillion for the month. This surge in DAI volume represents a staggering threefold increase compared to March.

Concurrently, DAI's supply has experienced synchronous growth, adding approximately one billion dollars' worth of tokens since March 7, reaching a current supply of 5.44 billion, as per data from The Block. Despite incremental increases in volume among other stablecoins, DAI has marginally expanded its share of the total stablecoin supply during this period.

Looking ahead, May holds promise as another pivotal month for DAI. Since the outset of May, the supply of DAI has surged by an additional $220 million, according to MakerBurn data. Nonetheless, the landscape may become increasingly competitive for DAI, with potential challenges from emerging rivals such as Ethena's USDe and Ripple's forthcoming stablecoin.

Despite the surge in DAI volumes, the price of Maker, the native token of MakerDAO—the organization underpinning DAI—experienced a downturn through April, before witnessing a modest uptick at the onset of May. This divergence underscores the complex interplay between stablecoin performance and broader market dynamics, highlighting the multifaceted nature of Ethereum's decentralized finance ecosystem.