Decentralized finance (DeFi) project MakerDAO has announced its plans to support Starknet, a zero-knowledge (ZK) rollup solution to accelerate DAI transactions and make network costs cheaper. As part of MakerDAO’s multi-chain strategy expansion, Starknet will be integrated into the DeFi protocol on April 28, 2022.
MakerDAO’s Multichain Strategy Expands With Starknet Support
On Wednesday, the development team behind the MakerDAO project revealed plans to integrate Starknet, an Ethereum layer two (L2) scaling solution. The protocol is a product developed by Starknet startup Starkware and provides an L2 scaling solution with ZK-based computations that use proofs of validity.
MakerDAO is the issuer of the stablecoin DAI, and once backed by Starknet, the team believes it will make DAI “significantly faster to mint, trade and liquidate.” Starknet’s MakerDAO integration follows the project’s bridge deployment on Arbitrum and Optimism. A project contributor to the Starknet core unit at MakerDAO elaborated that cross-chain bridge technology has increased due to expensive gas fees.
“As we see volatile gas fees drive more activity and users to different types of blockchains, the security challenges that come with bridging are increasing,” a Starknet core unit contributor said in a statement sent to bitcoin.com news. Will stay.” Projects must move to layer-2 to continue serving users, and MakerDAO is partnering with Starknet to do just that.”
A member of the Starknet Core Unit team said:
With this strategy, we are positioned to cement Maker’s Protocol’s position as the industry’s leading decentralized lending protocol and DAI’s position as the most decentralized, secure stablecoin. Through this development, MakerDAO will enhance its product offerings and grow with Ethereum.
While MakerDAO Expands, Decentralized Algorithmic Stablecoin Rises Over Competitor DAI
MakerDAO’s DAI stablecoin is currently the fifth largest stablecoin crypto asset with a market capitalization of $8.7 billion. For some time after DAI’s inception, MakerDAO’s stablecoin was the largest decentralized stablecoin by market capitalization, but recently Terra’s UST surpassed DAI’s overall valuation.
MakerDAO also has its own native coin maker (MKR), which is today the 73rd largest market capitalization with $1.7 billion. During the announcement on Wednesday, the team further stated that the upcoming improvements “will likely increase the number of MakerDAO users as well.”
Retail users will again be able to leverage Maker Vault to deposit collateral and generate DAI. Currently, the engineering team has begun to implement a multiphase roadmap for integration by creating a simple cross-chain bridge first connected to a wallet.
“Later phases include issuing rapid withdrawals in Q2, followed by near-instant teleportation of DAI in layer-2,” concludes MakerDAO’s announcement. “Finally the implementation of MakerDAO in its entirety on Starkware – the introduction of multi-collateralized DAI (MCD) contracts and an interface for transferring bad loans to Ethereum Layer-1.”
What do you think about MakerDAO adding Starknet support next week? Let us know what you think about this topic in the comment section below.
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