Multi-Collateral Dai: What You Need to Know
de LCX Team · January 11, 2022
Here’s a short guide to what is Multi-collateral DAI. …
The protocol behind Dai is MakerDAO. It is the world’s first decentralized stablecoin that is built on Ethereum blockchain technology. Dai’s debt ceiling of $120M makes it amongst the lowest stablecoins on the market concerning the overall market cap. With the launch of new collateral, the presumption is that the Dai supply will enhance considerably faster in the years to come. As such, Maker finally begins to perform as a decentralized bank where anyone can pull out a stable loan (in the form of Dai) utilizing an unrestricted number of currencies anywhere in the world.
Single Collateral DAI is SAI. With the introduction of Multi-Collateral DAI on 18th November 2019, the ticker symbol and name of Single Collateral DAI was changed to SAI (SAI). SAI is the non-migrated version of DAI.
The new DAI is DAI. Commonly stated to be Multi-Collateral DAI, it is an ERC20 token on the Ethereum blockchain targeted to have a stable value of approximately 1 USD. DAI has remained stable for numerous years with only small waivers from its price point of 1 USD.
Marked change in the terminology with the launch of MCD (Multi-Collateral Dai). Current Single-Collateral Dai will be stated as “Sai,” whereas Multi-Collateral Dai will be addressed as “Dai.” Users can seamlessly upgrade their Sai to Dai with the help of the Migration Portal (more on migration below). Upgrading offers users many advantages of MCD, consisting of more collateral options and the Dai Savings Rate.
Multi-Collateral Dai depicts the future of digital cash, with the latest Dai Savings Rate (DSR) feature and smart contract activation that sets the stage for new collateral assets to back Dai. Consequently, Maker Governance will aim to include new assets to MCD using debates and weekly votes in the future. Hence, anyone searching to take advantage of MCD’s several features must upgrade to Dai promptly.
Rune Christensen, CEO of the Maker Foundation, said, “The emergence of Multi-Collateral Dai is the subsequent step in the direction of the vision of developing a decentralized stage to assist level the economic playing field for people around the world.” The advancement in technology paves the way for more inventions from the DeFi community in the shape of partnerships, products, integrations, and services that may not have become possible, excluding the accessibility of DSR or the capability to gain leverage from various sorts of collateral, consisting of real-world assets.”
Dai has swiftly become the leader of decentralized finance, accounting for $256 billion in total value locked (TVL) into DeFi. Other points that illustrate the growth of the Maker ecosystem and the development of Dai include:
- Currently, there are around 940 million DAI in circulation.
- Stable development of addresses holding Dai is compounding on average by 27% per month.
- There are approximately 400 active partners, varying from universal payments and remittance systems to gaming and esports.
At LCX, we are always examining methods to make decentralized finance products more convenient for our users. The LCX DeFi Terminal 2.0, is fully decentralized and is an enhanced trading platform. Fire Salamander is an instant, smooth and faster method to trade across major decentralized exchanges.
Multi-Collateral Dai is a significant development in this space, and LCX is definitely forward to supporting the users on their DeFi journey!
