Decentralized Finance Protocol MakerDAO Shuts Down Single Collateral Lending System, Will Transfer to Multi-Collateral System

MakerDAO, a number one Ethereum-based lending system, is getting ready to maneuver to a multi-collateral DAI (MCD or Dai) system. The protocol’s group has closed down the single-collateral Dai (Sai) system, because the decentralized finance (DeFi) answer will get prepared for the transition.

MCD had been activated on MakerDAO in November of final 12 months. It was basically an replace to the Dai stablecoin protocol. Sai is backed solely by Ether collateral, in the meantime, MCD (multi-collateral Dai) is reportedly backed by ETH, Primary Consideration Token (BAT), and stablecoin USDC.

The improve goals to supply extra collateral choices and it additionally launched the Dai Financial savings Fee, which compensates traders with a variable and aggressive rate of interest that’s paid within the Dai stablecoin.

The MakerDAO group members had been already anticipating the eventual transition to a multi-collateral system, nonetheless, the transfer to the brand new system could have taken place sooner that beforehand deliberate due largely to the historic March 12-13, 2020 Bitcoin (BTC) and bigger crypto market crash (attributed to the financial uncertainty and challenges created by COVID-19).

The Coronavirus disaster appears to have made it clear that the Sai system has severe liquidity points.

In late March 2020, the Maker Basis, which helps the upkeep of MakerDAO, had launched a Governance Ballot so as to ask the group whether or not the shutdown of the only collateral system must be initiated.

After getting approval from the protocol’s group, it moved right into a grace interval between April 24 and Could 12, 2020. This time interval allowed MakerDAO customers to maneuver their Collateralized Debt Positions (CDP) to the MCD system.

Throughout this transition interval, Sai holders additionally had the prospect to maneuver their tokens to MCD on platforms corresponding to Uniswap.

MakerDAO’s Sai system was formally closed down on Could 11, 2020.

All Sai tokens have now been transformed to Ether on the market price. Those that would possibly nonetheless have Sai tokens can go to the migration portal to commerce their Sai for Ether.

Sai holders that haven’t migrated their CDP could use the portal to make withdrawals.