Category Archives: MakerDAO

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MakerDAO to Accept Select ERC-20 Tokens as Loan Collateral

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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Stablecoin Offers Way Out for Argentinians as Peso Struggles

Stablecoin Offers Way Out for Argentinians as Peso Struggles

After another economic crisis in Argentina, characterized by the peso’s falling to a record low against the US dollar, some financial analysts and commentators in the region see cryptocurrency as a potential solution.

After a history of inflation and debt defaults by the government, Argentina’s population see banks as a risk with some savers even keeping pesos in cash at home rather than deposit funds with a bank. Cryptocurrency has become more noticeable these days, particularly in the country’s capital Buenos Aires, where blockchain projects are thriving, unhindered by a government which is currently tolerant of the new technology.

It has been suggested that a cryptocurrency stablecoin may be a viable alternative to a struggling peso at some point if the current downturn in the economy kicks in with more vehemence. It could be that the mechanism already exists for creating a stablecoin with companies such as Ripio already adding its own to Dai coin to its exchange and wallet.

Developed by a foundation called MakerDAO, Dai is pegged to the dollar by using smart contracts on the Ethereum blockchain and is also currently being offered by another Argentinian exchange Beinbit. A few other exchanges in the region also offer Dai, the most notable of which is Buenbit. Ripio now has 300,000 users in Argentina, Brazil, and Mexico.

Nadia Alvarez MakerDAO’s business development associate for Latin America suggests that a change of perception by Argentinians needs to take place before a stablecoin could become an effective alternative to the national currency.

“One big problem that we have now is that all the crypto solutions have been for the crypto-nerds, for the techie people,” she said, adding that a stablecoin could offer the advantage of being “totally understandable” to users, rather than a cryptocurrency which fluctuates in value, as does country’s current fiat, the struggling peso.

 

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