RSK, a smart-contract-enabled sidechain extension for Bitcoin, has announced that Maker’s Dai stablecoin is now available on the platform.
It has been reported that 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.
However, the solution uses the Ethereum token bridge developed by the RSK Infrastructure Framework (RIF) team. The bridge locks up these tokens on the Ethereum blockchain and mints an equivalent amount on RSK by ensuring a stable and decentralized peg through smart contracts.
According to IOVLabs, the Dai integration has been audited by Trail of Bits and the Maker Foundation’s Integrations Team. Trading pairs for RSK DAI (rDAI) have been set up on the blockchain’s Uniswap fork, RSK Swap.
The RSK Bitcoin sidechain has now integrated DAI, promising much cheaper transaction fees for its users, @shvandrew reports. https://t.co/XjiNxCApL7 — Cointelegraph (@Cointelegraph) October 6, 2020
Diego Gutierrez Zaldivar, the CEO of IOVLabs, said 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 said 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.
As 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.
Thus, MakerDAO is often the first type of DeFi protocol ported into non-Ethereum blockchains, with RSK featuring a similar system through Money on Chain.