MakerDAO Halts the Single-Collateral DAI Process

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The society of MakerDAO has taken down the Single-Collateral DAI (Sai) process as the complete protocol converts to the latest Multi-Collateral DAI (MCD or Dai) process.

MCD was enabled on MakerDAO in November 2019 as an update to Dai protocol. Whereas Sai is only supported by ETH collateral, MCD is supported by many asset forms, presently comprising ETH, BAT, and USDC. The update added additional collateral alternatives for clients and unveiled the Dai Savings Rate, which credits holders with a variable interest rate reimbursed out only in Dai.

The society has often expected the Sai system’s imminent termination, albeit without any sense of desperation. But recent revelations on the subject escalated due to market dynamics in March since it became evident that Sai was facing a major liquidity crisis.

MakerDao Protocol
The Maker protocol functions by creating dai loans when subscribers load ETH or Basic Attention Token (BAT) as collateral into the system. Maker then sells the collateral automatically when the market crashes to get DAI off the market before the program reaches its collateral target of 150 percent. But the price was falling too quickly to keep up with MakerDAO’s automated auctions.

Maker Foundation put a Governance Poll on March 30, to decide whether to undertake the closure. After the group endorsed the procedure, the process for clients to transfer their Collateralized Debt Positions (CDP) to MCD reached a grace period between April 24 and May 12. Sai holders on sites such as Uniswap were also able to pass their tokens to MCD.

Sai closed down formally on Monday.

At the market level, all Sai tokens were converted instantly to ETH. Subscribers already owning Sai may swap their Sai for ETH through the migration portal. Anyone who has not migrated their CDP may also use their assets to withdraw from the portal.