MakerDAO has announced that they will begin accepting select ERC-20 tokens as collateral when taking out Dai loans, unlike the current setup where Ethereum is the only accepted collateral. The first six ERC-20 tokens that could possibly be used as collateral are Augur (REP), Basic Attention Token (BAT), DigixDAO (DGD), Golem (GNT), OmiseGo (OMG), and 0x (ZRX). BAT is likely the first ERC-20 token to be approved.
MakerDAO is a decentralized borrowing and stable coin system, where borrowers deposit cryptocurrency as collateral and receive the Dai stable coin which is pegged 1:1 with the USD. MakerDAO adjusts interest rates, much like a central bank, in order to keep Dai’s value balanced. Dai and MakerDAO have seen growing popularity, with Dai having a circulating supply in excess of USD 100 million, and Maker (MKR) having a market cap near USD 670 million.
In the old system, MKR was used to pay stability fees, which is essentially the same as an interest rate, but now Dai will be used to pay the stability fee.
Users who hold the old single collateral version of Dai, now called Sai, will be able to upgrade to the multi-collateral version, which is called Dai, via the migration app. Users who hold Sai on Coinbase will have their coins automatically upgraded to the new multi-collateral Dai.
Finally, one of the most anticipated changes in the MakerDAO system is that users who hold Dai will be able to earn interest simply by holding their coins. The interest payments will be funded with the stability fee.
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