MakerDAO users can finally stake multiple cryptocurrencies to back the Dai stablecoin. Multi-Collateral Dai went live with support for Brave’s Basic Attention Token. Additionally, the upgrade continues support for Ethereum-based collateral. Other tokens, including Augur and 0x, may be on the way as well.
Multi-Collateral Dai also has a few secondary features. Most notably, it coincides with the Dai Savings Rate, which draws funds from the project’s stability fee in order to pay returns to users. Today’s upgrade also allows users to pay their stability fee with Dai rather than the less commonly held MKR governance token.
Unlike Tether and most other stablecoins, Dai is not backed by a central reserve of fiat currency. Instead, individual users lock up their crypto holdings in a blockchain smart contract, allowing them to issue their own Dai. It’s an original model, and with any luck, these new features will attract more users to the platform.
MakerDAO Gets a Makeover
To coincide with the upgrade, MakerDAO has undergone a rebranding. Dai has been given a new logo that resembles a standard currency sign, much like the dollar sign, the Euro sign, or Stellar’s updated logo. This change reflects MakerDAO’s ambitions of becoming a cryptocurrency with commercial uses — not just a stablecoin.
Maker’s new Dai logo
The upgrade also introduces a simpler naming scheme. Multi-Collateral Dai has done away with the term Collateralized Debt Positions in favor of “vaults.” Though the two features are more or less the same, the latter term is self-explanatory. “The Maker Vault in MCD is where a user deposits collateral and generates Dai,” MakerDAO elaborates.
Finally, Single Collateral Dai has been renamed “Sai,” while Multi-Collateral Dai has taken on the existing name “Dai.” This reflects the fact that Multi-Collateral Dai will render the old system obsolete when the community chooses to do so. “The opportunity to migrate is not open-ended,” MakerDAO states, urging users to migrate soon.
Operational Challenges Ahead
MakerDAO’s announcement indicates that the transition to Multi-Collateral Dai will introduce challenges. “Careful scaling remains crucial as Maker Governance becomes increasingly more sophisticated,” today’s announcement reads. Decisions on matters such as fees, features, and changes can be seen in real time on this page.
Historically, changes to MakerDAO’s stability fee have been a controversial issue. This fee incentivizes users to create and destroy Dai, ensuring that the coin maintains a $1.00 price peg. However, the fee has been trending upward, provoking plenty of debate — though more recent trends have brought the fee down slightly.
Stability fee chart by MKR.tools
Fortunately, these matters mainly concern users who issue their own Dai through the collateralization process. Investors who buy existing Dai on an exchange won’t notice much of a difference. In fact, Coinbase is planning to migrate on its users’ behalf, so the transition should go smoothly for many Dai holders.
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