On November 18th of 2019, MakerDao released a new upgrade known as the MCD (Multi-Collateral DAI). This upgrade includes a variety of features, including security updates, name and terminology changes, and some new features. As a part of these changes, the previous Single-Collateral token has been renamed to SAI and the newly upgraded token is known as DAI. What were previously known as Collateral Debt Positions (CDPs) have now been renamed Vaults?
New features include a new Multi-Collateral protocol that supports more crypto assets, consisting of both BAT and ETH assets. The Maker community will later be able to vote regarding which additional tokens will be introduced. In addition to this, DAI token holders are now able to earn interest on their funds immediately via the Dais personal platform using the DAI savings rate (DSR). There are no fees associated with this service and the interest comes from the Stability Fees paid by borrowers that are using Vaults to take out loans.
Once all these new changes are implemented the Single-Collateral protocol will cease to be updated by MakerDao and, at some point, Single-Collateral Protocol will be phased out entirely. It is recommended that all holders of SAI tokens convert their tokens to the new Multi-Collateral DAI as soon as possible.
As of May 12, 2020, the Single Colllateral Dai protocol has been shut down. If you are still holding Sai token, you must redeem your collateral in ETH, and rebuy or open a new vault to mint the new Dai token from MakerDAO.
How to Convert cSai to cDai in 4 Easy Steps:
If you wish to convert your cSai to cDai on Compound.Finance, you can’t do it directly on the platform. You will need to withdraw it back to your Ethereum WEB3 compatible wallet, such as Metamask, TrustWallet, Coinbase Wallet before continuing.
- Go to Compound and click “withdraw” to return the Sai back into your Ethereum wallet.
- Go to the Sai to Eth Redemption Tool and connect with your wallet.
- Choose how much Sai you would like to redeem back to ETH. Submit your transaction and wait for confirmation. Once the transaction is confirmed you will see ETH in your wallet.
- Go to Oasis or Uniswap to purchase Dai with your new ETH, or alternatively go to Oasis and open a new vault to mint Dai using your redeemed ETH as collateral.
You can now go back to Compound now and lend your new Dai again.
What Exactly is Compound.Finance?
Compound is a numerical financial market on Ethereum that defines how users can earn interest or borrow assets using their security. To earn continued compounding interest, one is only required to surrender his/her assets to the Compound liquidity pool. The interest rates keep on changing based on demand and supply.
cTokens denote the balances of the assets supplied. These are assets that earn interest and, at the same time, act as security. The amount users can borrow is limited to 50-75 percent of their cTokens value, based on the quality of the asset provided. Users can deposit or withdraw funds at their will, but in case of undercollateralized debt, one is allowed to convert assets into cash, and liquidators facilitate this by providing a 5 percent discount on the assets being liquidated.
Out of the total interest earned, the compound protocol sets apart 10 percent of the interest earned as reserves, and the remaining 90 percent is paid to the supplies. There are no charges, and all the tokens owned by the protocol are from outside.
With the compound protocol, you can access BAT, DAI, REP, ETH, ZRX, and WBTC since all are supported. As of 2020 Sai is being phased out and will no longer earn interest.
Reference: https://steemit.com/ethereum/@ethfinance/how-to-convert-csai-to-cdai-on-compound-finance
Comments