Single Collateral DAI Collapse Is Great For Maker And DeFi

The Single collateral DAI was once known as the old DAI but after the migrating and updating, the stabelcoin from the Multi Collateral Dai MAKER, conducted the first major token upgrade and prove that the token migrations don’t have to be a problem as we are reading in the MAKER news today.

The introduction of the Multi Collateral DAI breathe life into a new concept of protocol and token innovation so rather getting an update on the tokens via code changes, Maker started a new smart contract platform with fresh code in order to improve DAI. So now, the old DAI is called SAI or Single Collateral DAI. There are some major changes from MACD that include the DAI savings rate, Basic Attention Token represents collateral for loans and a system for auction to erase the system debt.

Since 2019, the net total of about 56 million was migrated from the SAI to DAI using the migration facilities of Maker. Close to the 101 million DAI were out there before the MCD which indicated a migration rate of about 56 percent. The major reason for the MCD successes was the sustained support from the entire DeFi ecosystem.

From lending platforms such as dydx and Compound, and wallets such as MetaMask, DeFi protocols took it upon themselves to ease the problems of the users and to help facilitate migration from SAI to DAI without having to use the Maker migration tools. With support from the other DeFi projects, it is almost impossible to believe that MAKER could have done the entire migration alone. Compound allowed the users to keep their CToken balances intact while the process was ongoing which abstracted a lot of the additional processes. This helped the users to upgrade to the new DAI with only a click of a button.

The changes were made soon after serving the needed time lock for the administrator changes so the users could remove their funds if they don’t want to upgrade from SAI to DAI. Maker set a very important precedent for protocols that want to change their token economics model so the differences now between deploying a new smart contract rather than just updating the contract is akin to hard forks and soft forks only.