Makerdao, a decentralized finance project (defi), has revealed its intention to support Starknet (zero-knowledge) rollup solution Starknet. This will allow DAI transactions to be processed faster and reduce network costs. Starknet will be integrated into the defi protocol on April 28, 2022, as part of Makerdao’s multichain strategy expansion.
Makerdao’s Multichain Strategy Expansion Grows With Starknet Support
The Makerdao team revealed on Wednesday that they are planning to incorporate Starknet’s Ethereum layer 2 (L2) scaling solution. Starkware developed Starknet protocol, which is an L2 scaling product that uses validity proofs.
Makerdao is the issuer of the stablecoin DAI, and after Starknet is supported the team believes it will make DAI “minting, trading and liquidation significantly faster.” Starknet’s Makerdao integration follows the project’s bridge deployments on Arbitrum and Optimism. Starknet Core Unit’s Makerdao project contributor explained how cross-chain bridge technology has grown in response to expensive gas fees.
“As we see unsustainable gas fees drive more activity and users to a wider variety of blockchains, security challenges that come with bridging will continue to grow,” the Starknet Core Unit contributor said in a statement sent to Bitcoin.com News. Projects must move on to Layer-2 to continue to serve users, and Makerdao is partnering with Starknet to do exactly that.”
Starknet Core Unit Team member added:
With this strategy, we are positioned to cement the Maker’s Protocol’s position as the leading decentralized lending protocol in the industry, and also the status of DAI as the most decentralized, secure stablecoin. Makerdao’s product range will be expanded and it will grow along with Ethereum.
Makerdao grows, but decentralized algorithmic stablecoin rivals rise above DAI
Makerdao’s DAI stablecoin is currently the fifth-largest stablecoin crypto asset today with an $8.7 billion market capitalization. For quite some time following DAI’s inception, Makerdao’s stablecoin was the largest decentralized stablecoin by market capitalization, but recently Terra’s UST has surpassed DAI’s overall valuation.
Makerdao has its native coin maker, MKR. It is currently the market’s 73rd biggest with $1.7billion. During the announcement on Wednesday, the team further said that the upcoming improvements “will likely also increase the number of Makerdao users.”
Maker Vaults will also be available to retail users, allowing them to deposit collateral or generate DAI. The engineering team is currently implementing a multi-phase integration plan. They started by creating a cross-chain bridge that was tied to a wallet.
“Subsequent phases include the release of fast withdrawals in Q2, followed by near-instant teleportation of DAI across Layer-2,” Makerdao’s announcement concludes. “Finally the implementation of the entirety of Makerdao on Starkware—heralding multi-collateral DAI (MCD) contracts and an interface to migrate bad debt to the Ethereum Layer-1.”
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