Will DAI expand into the cosmos after the collapse of Terrausd?

Will DAI expand into the cosmos after the collapse of Terrausd?

After the collapse of Terrausd (VAT), the Cosmos ecosystem has increasingly searched for onboard alternatives to cover the demand for stablecoins, such as: B. Brided dai and USDC from Ethereum.

A new lending and rental protocol, umee- think according to connection for cosmos- relies on the upper floor of decentralized stable coins, makerdaos dai. For uninitiated, Cosmos is an ecosystem of sovereign application chains connected by the Cosmos hub.

The explosion of VAT met Cosmos hard, since it was de facto the stablecoin in Cosmos Dexes Osmosis, Junoswap and Crescent. In Osmosis, for example, many liquidity providers (LPS) were prevented from selling their VAT positions because the Dex (decentralized stock exchange) offered strong incentives to block liquidity for up to 14 days. These LPs could only watch the value of their pool token against zero, until an emergency-government proposal a.

When it became clear that VAT was dead, the market participants of Cosmos quickly tried to fill the gap. Enter DAI, the oldest decentralized stable coin with a daily volume of around $ 300 million and a market capitalization of $ 6.5 billion, as can be seen from the data collected by block works.

"In the Cosmos area we believe in quality and we want to find the most profitable decentralized stable coin," said Brent Xu, CEO of Umee, to block works.

"At the moment everything indicates that Dai is this stable coin on which the entire interchain can rely on."

Interchain refers to all blockchains that are connected by inter-blockchain communication (IBC) via the Cosmos Hub.

dai, however, can be shaped with a variety of collateral on Ethereum mostly ether . It survived several market cycles in the approximately five years of its existence, including periods of high volatility.

a cosmos-native approach

xu pleads to make Dai MultiChain - both in terms of its availability and on its collateral. He suggests expanding the security sentence of DAI to cosmos native assets like atom.

To do it, Umee has developed a new cross-chain technology called "Bridgeless Collateralization". The idea is that users can keep their assets on a blockchain instead of sending them over a bridge to become packed on another. In theory, this should avoid the security problems related to packaged assets that occurred in several top -class exploits such as the Wormhole Bridge in February.

"What we do is that we have a powerful oracle in the middle ... it can send a signal to say: 'Hey, let us shape something on the Cosmos-Blockchain that is supported by Ethereum-Assets and Cosmos Assets.

This bridging form, which XU refers to "a much more sustainable model in contrast to several bridges for a specific asset", will come later. First plans to the decentralized use gravity bridge for the dynamic display provision as a packaged asset.

"We are pursuing a Bridge-Agnostic approach and are expecting stable swaps on our roadmap," he said. This allows users to switch between different stable assets, including various types of packaged DAI.

For example, the largest Cosmos-based Dex, Osmosis, Bridge Dai took over axelar-Netzwerk as its canonical version of the Ethereum Stablecoin.

To realize Umee's vision, Maker Governance Voices are required. Details of the process are still pending, but XU expects it to take three to six months for the support of the maker community to be collected.

"We see this as a deep partnership," he said. "We would like to promote the most comprehensive use of DAI in Cosmos [as possible] to strengthen this lack of a viable stable coin in the Cosmos ecosystem," he adds that he has been working with Makerdao for years.

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The contribution will dai expand into the cosmos after the collapse from Terrausd? is not a financial advice.