Support for Multi-Collateral DAI – Compound
Plans, expectations, and timeline
The Compound protocol currently supports DAI, a stablecoin created by the MakerDAO ecosystem. MakerDAO’s team has announced their intention to release a new version of the stablecoin, Multi-Collateral DAI (“MCD”) on November 18th, and intent to deprecate the existing token through global settlement months later.
Subject to further review, here’s what you can expect from the Compound protocol:
Existing (Current) DAI
- The existing Compound DAI market, cDAI, will continue to function normally; all protocol functions should continue to operate without issue, and no changes are expected to be made to the protocol.
- Users will not be forced to redeem DAI, nor maintain DAI inside the Compound protocol. You are individually responsible for choosing when, and how, to migrate to Multi-Collateral DAI.
- After MakerDAO calls for a global settlement, DAI will no longer be a stable asset, and will instead track the (partial) value of Ether — you should be aware that holding DAI inside Compound does not preserve its value, and does not prevent global settlement.
- Following the development, review, and auditing of a cToken contract, as well as a determination of Multi-Collateral DAI suitability, MCD will be added to the Compound protocol.
- The Compound Interface will likely support both DAI and MCD until DAI balances and usage are immaterial.
- Interest rates, in either the DAI or MCD market, may be unusually volatile or abnormal during the transition period.