Ethereum
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ETH · 23w

An Update on the Dai Savings Rate in Multi-Collateral Dai (MCD)

The Dai Savings Rate (DSR) is one of the most anticipated features of Multi-Collateral Dai (MCD). First, the DSR will further differentiate Dai from other stablecoins. In addition to continuing to provide Dai holders with a stable decentralized currency, MCD will offer an option to earn savings simply by holding Dai.  Any Dai holder may lock her Dai in a smart contract to earn additional Dai. Second, depositing and withdrawing Dai will happen via an easy-to-use dapp provided by the Maker Foundation. And finally, DSR will play a role in maintaining Dai’s soft-peg to the US Dollar by stimulating demand for Dai.

Lock-Up Dai to Earn Savings 

At the launch of MCD, any Dai holder will be able to deposit Dai into the Dai Savings Rate smart contract to earn additional Dai. Think of DSR as a savings account for your crypto. The process is simple, as noted directly below and illustrated in Figure 1:

The Dai holder deposits Dai from their wallet to the Dai Savings Rate contract, effectively locking the Dai in the contract.  While the user’s Dai is in the Savings Rate contract, the Maker Protocol automatically adds Dai equal to the variable Savings Rate determined by Maker Governance. The Dai holder can, at any time, unlock his/her Dai from the Savings Rate contract, along with the savings earned up to that point. The Dai holder maintains custody and control over the Dai locked in the Savings Rate contract at all times.  A Dai holder deposits 100 Dai at a Savings Rate of 5% per year, and then withdraws 105 Dai after 12 months.

Dai holders will use a DSR dapp to easily deposit and withdraw Dai, and review other information. In the mockup below of the dapp for DSR, the user can see the total amount of Dai in their wallet (512,534 Dai) and the amount of Dai they have within DSR (100.05 Dai). 

The user can easily top up their Dai in the dapp by specifying an amount in the “Deposit” tab, pressing the “Deposit Dai” button, and then signi...

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