The team behind RSK, a smart-contract-enabled sidechain extension for Bitcoin, announced Tuesday that Maker’s Dai stablecoin is now available on the platform.
The integration makes it possible to transfer Dai from Ethereum to the RSK sidechain, which makes it available for use in its Bitcoin-backed decentralized finance ecosystem.
The solution uses the Ethereum token bridge developed by the RSK Infrastructure Framework, or RIF, team. The bridge locks up these tokens on the Ethereum blockchain and mints an equivalent amount on RSK, ensuring a stable and decentralized peg via smart contracts.
The Dai integration has been audited by Trail of Bits and the Maker Foundation’s Integrations Team, according to IOVLabs, the company behind RIF. Trading pairs for RSK DAI, or rDAI, have been set up on the blockchain’s Uniswap fork, RSK Swap.
IOVLabs CEO Diego Gutierrez Zaldivar told Cointelegraph that rDAI is intended as a lower-fee alternative to escape Ethereum congestion:
“The current situation of the Ethereum network with its extremely high fees and scalability concerns can limit DAI retail adoption, specially for those currently underserved by the traditional markets who need small transactions and available fees.”
Zaldivar further claimed that using DAI on RSK offers users a Bitcoin-like level of security through merged mining, and fees up to 50 times lower than on Ethereum.
Dai is one of the leading stablecoins on Ethereum, which saw integration across most DeFi protocols and exchanges. It is also one of the few decentralized stablecoins currently on the market, though it has recently increased its exposure to custodial risk by adding several centralized stablecoins and wrapped tokens as collateral to create Dai.
MakerDAO is often the first type of DeFi protocol ported into non-Ethereum blockchains, with RSK featuring a similar system through Money on Chain.
RSK positions itself as a “Bitcoin DeFi” platform due to its tight coupling with it, but it should be noted that RSK is a separate blockchain that piggybacks off Bitcoin’s security and uses a pegged version of BTC.
Pegged Bitcoin in DeFi is also finding considerable success on Ethereum through projects such as Wrapped BTC, Ren and tBTC.
The latest move to enable transfers of liquidity from Ethereum highlights a general interoperability trend seen in many non-Ethereum DeFi projects. Some investors and commentators believe that the success of these projects hinges on bridging Ether (ETH) liquidity and offering a cheaper alternative to allow for further DeFi growth.
Source: Read Full Article