Multi-Collateral Dai Is Live

Today MakerDAO ($MKR) is transitioning to the long-awaited Multi-Collateral Dai system that introduces support for different types of collateral besides ETH and makes some key structural changes. The first type of collateral to be available is Basic Attention Token ($BAT) which will have an initial debt ceiling of three million Dai compared to 50 million for Ether ($ETH).

The current single collateral Dai (“Sai”) will continue to exist while users are encouraged to migrate to the new Dai. Another major change is the introduction of the Dai Savings Rate (DSR) which acts as an interest-bearing savings account. Unlike traditional accounts, it does not lend the money out, but rather it pays interest to depositors using funds from the Stability fee.

Why It Matters:

• New collateral types should increase the addressable market of collateralized debt as well as the stability of the system by diversifying the debt pools.
• The Stability Fee has been changed significantly throughout the year jumping from 0.5% to over 20% back down to 5%. The DSR provides another lever to adjust in order to keep Dai around $1 which should lessen interest rate volatility.