Transition to Multi-Collateral Dai
As of October 2019, only Ether could be used as collateral when issuing Dai.
This means that the price of Dai will be affected by the price of Ether.
Such a system where the price is backed by only one currency or asset is called Single-Collateral.
This type of Dai is called Single-Collateral Dai (SCD).
Single-Collateral Dai is positioned as a beta version, and the transition to Multi-Collateral with multiple assets as collateral was implemented in November 2019.
A Dai whose price is backed by multiple assets is called a Multi-Collateral Dai (MCD).
Until now, the price of Dai has been strongly influenced by the price fluctuations of Ether.
When the price of Ether plummeted, the price of Dai could also plummet in tandem.
However, now that Dai is Multi-Collateral, it is free from this risk.
In addition, since Dai is not limited to cryptocurrency, it can also use real world stocks and bonds as price backing assets.
This allows MakerDAO to expand the project beyond cryptocurrency and into existing financial markets.
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Governance at MakerDAO
During the transition from SCD to MCD, the governance mechanisms learned in Lesson 4 are actually being used.
First, a forum was held to discuss which cryptocurrencies would be suitable as collateral assets in MCD.
At that time, not only BAT, which was the final choice, but also REP (Augur) and ZRX (0x) were proposed.
As a result of the discussion, it was decided that BAT would be added as a backing asset based on a vote by MKR holders.
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Let's keep track of the future of MakerDAO
The move to Multi-Collateral was a very big move for MakerDAO.
The fact that this major event was realized in the form of a DAO, rather than a specific administrator, is an initiative that can be used as a reference not only for MakerDAO, but also for future forms of governance.
In addition, with this transition, the "Dai Savings Rate (DSR)," a system that allows users to earn a certain amount of interest by saving their own Dai, which we learned about in Lesson 3, has also started.
This is a system that can truly be described as a bank without a specific administrator, and will attract further attention as a representative example of DeFi enabled by blockchain.
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