The expansion to StarkNet will make DAI a multi-chain decentralized stable coin and make it 100x cheaper to use than Ethereum.
MakerDAO, the pioneering Ethereum-based stable coin and cryptocurrency lending protocol, is mixing the costs and congestion of its native environment with an expansion to the second-layer scalability solution, StarkNet.
Best known for funding DAI, the second-largest decentralized stable coin on the market, MakerDAO revealed expansion intentions on Wednesday. According to an expansion schedule collected by Crypto Briefing, the integration might become fully active by the third quarter of this year or, at the latest, by early 2023.
The implementation would rely on four stages, beginning with a simple bridge between the two networks scheduled for April 28. The second phase, intended for the second quarter of 2022, will allow fast retirements from Layer 2 to Layer 1 after an update that includes a feature that will instantly move DAI between diverse Layer 2 networks.
Up to 200 Times More Affordable than Ethereum
As such, the integration with StarkNet will seek to enhance DAI’s multi-chain capabilities, and the associated Maker Vaults feature while persisting in reducing the cost of transactions and the speed of performance on the platform. Once the expansion to StarkNet reaches its completion, minting and borrowing costs for DAI will be cheaper than Ethereum.
StarkNet is an Ethereum layer 2 scaling solution that grasps Zero-Knowledge Rollups to assist Ethereum in its scale.
MakerDAO’s integration with StarkNet means users will be able to connect DAI from the Ethereum main net to the overlay network and operate the stable coin from there with faster settlement times and cheaper costs. According to StarkWare, their scaling solution should bring fees 100-200 times more affordable than Ethereum.
As Crypto Briefing recalls, Ethereum founder Vitalik Buterin has previously stated that rollups like StarkNet could help the network achieve up to 100,000 transactions per second, which would significantly increase the current average of around 15.
MakerDAO Wishes to Become a Multi-chain Feature
The expansion will also make DAI a fully multi-chain decentralized stable coin. Pegged to the US dollar, DAI is currently the second-largest decentralized stable coin after Terra’s USDT; according to CoinMarketCap, its market cap got registered at $9 billion.
MakerDAO’s latest move is part of the protocol’s broader strategy to set an extension for multiple chains, following DAI token bridges’ release on Optimism and Arbitrum One.
The fifth-largest decentralized finance (DeFi) protocol in terms of TVL, intends to make its product offering grow and gradually step towards a multi-chain future by linking with other platforms. According to data reported by DeFi Llama, MakerDAO has a total value locked (TVL) of $14.24 billion, behind only Curve, Lido, Balancer, and Anchor.
By: Jenson Nuñez
