Along with collaboration with a prominent cross-chain protocol Umee and the team of MakerDAO, decentralized stablecoin is to join the blockchain
When the Terra (LUNA) network collapsed, it resulted in a hard hit that the whole crypto market had experienced that resulted in multiple ways. On a negative note, the collapse of the network resulted in a huge loss for LUNA and UST stablecoin investors that also created a ripple effect that went throughout the crypto market resulting in huge losses that the crypto market faced. This also created a void where a significant stablecoin has lost its place in the crypto space and in the Cosmos ecosystem.
After losing one of the prominent stablecoin, Cosmos blockchain had been in constant search of a new decentralized stablecoin. The hunt of Cosmos for a stablecoin seems to come to an end after the announcement of the cross-chain protocol Umee’s team that DAI stablecoin will fill the gap.
CEO of Umee, Brent Xu said that the collapse of the UST stablecoin made it quite clear that now the Cosmos ecosystem would need a strong and safe stablecoin. While looking forward to it, the potential mission of Umee includes creating cross-chain stablecoins to add them as Cosmos assets on MakerDAO.
Now what’s special with DAI and why is it being considered to be a potential reviver of collapsed stablecoin’s image. Well, unlike UST stablecoin, DAI has quite a good reputation as it’s an overcollateralized stablecoin across the whole crypto market with a market capitalization of approx $6.9 billion. Although compared to the largest stablecoin and market leader Tether’s stablecoin USDT, DAI is smaller in magnitude but what makes it special and significant is its whole different build and design.
For instance, if someone wants to mint $1 of DAI stablecoin then he would need to deposit Ethereum worth upto $1.75. Along With Ethereum (ETH), there are a bunch of other cryptocurrencies that can also be used as collateral for DAI stablecoin that including Wrapped Bitcoin (WBTC), Polygon (MATIC), Uniswap (UNI), and several others. The required minimum collateral ratio that each collateral asset carries against DAI stablecoin figures out the number of assets that anyone needs to put in order to mint DAI.
ALSO READ: Mark Zuckerberg Shares His Long Term Vision Via Crayta Tools
Source: https://www.thecoinrepublic.com/2022/06/09/finally-the-decentralized-stablecoin-of-makerdao-is-coming-to-this-blockchain/