MakerDAO launches Multi-Collateral Dai as MKR holds steady 🚨 This article is 5 years old...
MakerDAO launches Multi-Collateral Dai as MKR holds steady
4 min read
Updated: Feb. 20, 2022 at 2:37 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
MakerDAO announced the release of Multi-Collateral Dai (MCD). The move is going to bring a wide range of new features to the Maker protocol, including Dai Savings Rate (DSR) and additional collateral asset types. Despite the major announcement, MKR’s price remains stagnant.
The new Multi-Collateral Dai
Over a month ago, MakerDAO disclosed a change in the terminology of its products and services. Collateralized Debt Position (CDP) was renamed Vault while Dai (Single-Collateral Dai) was replaced with Sai, and MCD-generated Dai was named Dai. The idea was to get users familiar with the new developments that were going to be released.
Now, anyone can upgrade their Sai to Dai using the Migration app developed by the firm. A number of cryptocurrency exchanges, including Coinbase, announced their support for the new Dai. And, have offered to make the upgrade from Sai to Dai automatically.
With the release of the new Multi-Collateral Dai, the decentralized autonomous organization will offer a range of new services to its users.
MCD brings with it the much-anticipated Dai Savings Rate (DSR) mechanism. This allows Dai holders to lock up their tokens in a smart contract and earn additional Dai in the meantime. Although MKR holders will decide the initial rate, the risk management lead at the Maker Foundation, Cyrus Younessi, believes that it would likely be around 2 percent.
According to Younessi:
“Given the absence of any empirical data, it is difficult to select a precise starting DSR value. However, a DSR of 2% is likely to be competitive with the broader DeFi ecosystem, which currently offers a ~6% (and dropping) savings rate on Sai.”
Additionally, the upgrade introduces a wider range of collateral assets, which were previously limited to Ethereum only. At the moment, the Maker community is evaluating seven cryptocurrencies, including Augur (REP), Basic Attention Token (BAT), DigixDAO (DGD), Ethereum (ETH), Golem (GNT), OmiseGo (OMG), and 0x (ZRX). Out of all of these tokens, the first two being considered for their low risk of integration are BAT and ETH.
Despite the positivism seen across the market regarding the Multi-Collateral Dai, Udi Wertheimer, a bitcoin developer, criticized the move to back Dai with “illiquid shitcoins.”
Wertheimer said:
“Imagine you’re not going through life constantly reading crypto twitter and smart contracts. You believe DAI is a stablecoin backed by ETH (fairly liquid and a bit less volatile than other shitcoins). You go to an exchange to buy some. Oops! Here’s a [Basic Attention Token]-backed shitcoin instead.”
As more people in the crypto community start to understand the impact of the recent announcement, MKR is holding steady without much volatility.
MKR technical analysis
Over the last few weeks, MKR saw its price rise over 67 percent from a low of $412 on Sept. 24 to a high of $690 on Nov. 11. The move was succeeded by a 19 percent correction that took this cryptocurrency down to $561, four days later.
Now, the 50 and 61.8 percent Fibonacci retracement levels appear to be containing the price of Maker as it awaits for a spike in volume that will determine where it would head next.
Based on its 12-hour chart, MKR is trading in a no-trade zone. The lower and upper Bollinger bands, sitting at $601 and $690, respectively, define this range. Trading within these support and resistance levels poses high-risk exposure. This is a result of the inability to determine in which direction the trend will result.
As the Bollinger Bands squeeze on MKR’s 12-hour chart, the odds for a breakout increase. Thus, it will be wiser to wait for a clear move outside of this range before entering a trade.
On the upside, if Maker closes above resistance it would signal a move up to the 78.6 percent Fibonacci retracement level, at $794. However, a spike in the selling pressure behind this crypto could take it to close below the support level. If this happens, MKR would likely plummet to the 38.2 percent Fibonacci retracement level, at $541.
Moving forward
The recent announcement by MakerDAO is generating significant buzz around the community. Even Reuters ran a story dedicated to how Dai is planning to “change the stablecoin game.” However, there are those who believe that the move to back Dai with a number of cryptocurrencies that present high levels of illiquidity could be extremely dangerous. As there are different sentiments about the Multi-Collateral Dai, MKR could be preparing to make a significant price move soon. On the upside, it could surge to nearly $800 while on the downside, it could plunge to $541.
Mentioned in this article
Maker 
Single Collateral DAI 
Ethereum 
Augur 
Basic Attention Token 
DigixDAO 
Golem 
0x 
Coinbase 
MakerDAO 
Featured Story
Advertise Here
In this article
Maker is a decentralized autonomous organization on the Ethereum blockchain seeking to minimize the price volatility of its own stable token — the Dai — against the IMF’s international currency basket SDR.
Single Collateral DAI
$1.28634
Dai is a cryptocurrency that automatically reacts to emergent market conditions in order to stabilize its value against the major world currencies.
Ethereum
$3,408.19
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Augur
$0.68141
Augur is a decentralized oracle and peer to peer protocol for prediction markets.
Basic Attention Token
$0.26927
Basic Attention Token (BAT) is an Ethereum-based token that improves the efficiency of digital advertising by creating a new unit of exchange between publishers, advertisers and users.
DigixDAO
$60.9562
DigixDAO tokenizes gold on Ethereum, leveraging the Distributed Ledger for its immutability, transparency and auditability by applying it to precious physical assets..
Golem
$0.40197
Golem enables users and applications (requestors) to rent out cycles of other users’ (providers) machines.
0x
$0.50228
0x is an open, permissionless protocol allowing for ERC20 tokens to be traded on the Ethereum blockchain..
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Maker is a Decentralized Autonomous Organization that creates and insures the dai stablecoin on the Ethereum blockchain.
