In the past few hours, it has been possible to use the new cDAI on the Compound platform and thus take advantage of the new protocol to earn interest on DAI.
As is well known, the protocol of the DAI stablecoin has recently been updated and this has brought several new features, such as the name change for the previous asset, now called SAI, and the ability to generate DAI using other cryptocurrencies such as BAT.
Migration from the old protocol to the new is not carried out automatically, especially for users who have locked their tokens in third-party apps, whereas on some exchanges the transition from the old DAI to the new SAI is done automatically, an example is Kraken.
Most users take advantage of DAI to earn interest on cryptocurrencies, with one of the most widely used services being Compound, which offers significant percentages of over 5%.
For this reason, the team had to update the Compound platform to support the new DAI/SAI protocol and so, from now on, it will be possible to earn interest also on the new assets,
At the moment, the amount of the market that has converted the tokens reaches $100,000 against the $22 million of the old protocol that now uses SAI.
Currently, the cDAI smart contract contains just under 3 million tokens with 30 active addresses, so the conversion is in its early stages, but in the coming days it is expected to be populated by all those who want to earn interest on the new DAI.
Compound, DAI and DeFi
DAI is one of the projects of the DeFi, i.e. decentralised finance, which is currently gaining increasing popularity.
Federico Pecoraro of Chainblock commented on this:
“We strongly believe in the DeFi market and its future development. In fact, dApps are a natural evolution of the reason why Bitcoin was born: to eliminate intermediaries and facilitate the exchange of value between people. The idea of simplifying the lending of money between private individuals in a decentralised way, primarily, we believe it is a useful way to facilitate mass adoption, which does not necessarily have to go through the direct spending of tokens but through a wider use. The DeFi boom is also a response to the ever-increasing centralisation of the market, dominated by exchanges that are increasingly the custodians of the value of others and increasingly subject to regulation and potential theft. It will be interesting to see the regulatory developments in this area and the technical and security developments underlying the smart contracts of dApps”.