Different Varieties of DAI: A Combined Explosion of New Products

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Blue Fox Notes (ID: lanhubiji)

Blue Fox Notes (ID: lanhubiji)

DAI

, Author: Evan Kereiakes, Translator: HQ; Odaily reproduced with authorization.

xDAI

Foreword: DeFi has formed a climate, and there are more and more derivatives based on DAI. Algorithm-driven, permissionless, transparent and other characteristics make decentralized finance present many completely different appearances from before. MakerDAO's DAI solves the problem The stability of cryptocurrencies has led to a steady stream of innovations based on it. This is just the beginning, and the future will be even more exciting. The author of this article is Kyle Kistner, translated by "Leo" of the "Blue Fox Notes" community.

DeFi has reached escape velocity. We are experiencing a combinatorial explosion of new products driven by the endless creativity of the Ethereum community. If you look at it by day, it is almost impossible to keep up with all the new products and tools that are released. This article aims to solve this problem. (Blue Fox Notes: Escape velocity refers to the minimum velocity required for an object on Odaily to escape the gravitational force of the celestial body and fly into the universe. For example, the escape velocity of the earth is 11.2 km/s. If the initial velocity is less than the escape velocity , the object will eventually fall. The meaning of this article here is that the DeFi ecology has flourished and has an upward momentum.)

It is the original collateral-backed stablecoin, first proposed by MakerDAO. It has become the most commonly used unit of account in the entire DeFi ecosystem. DAI uses CDP (Collateralized Debt Position) to support its value, of which ETH is currently the main collateral. Multi-asset collateralized DAI is coming, just a few milestones to complete.

iDAI

xDAI is the first DAI derivative. Initially, xDAI runs on the POA sidechain (Blue Fox Notes: POA is the proof of authority), allowing seamless transfer of xDAI in a very short period of time. Today, xDAI runs on the DPoS blockchain using the POSDAO consensus algorithm.

POSDAO is implemented using a general BFT consensus protocol, such as AuRa (Authority Round) with proposer nodes and probabilistic finality or HBBFT (Honey Badger BFT) with instant finality and leaderless.

cDAI

Through a configurable incentive structure, validators are incentivized to act in the best interest of the network. The algorithm provides Sybil control mechanisms for managing a set of validators, assigning rewards, reporting and punishing malicious validators.

iDAI was first proposed by bZx in an article (with MakerDAO as a co-author) in July 2018. Its technical specification was published in March 2019. This is the first time the powerful idea of ​​tokenizing lending pools has been introduced to the community. iDAI continues to accumulate value and rise in price because its underlying asset is an asset that is lent to borrowers.

rDAI

There are two notable features of iDAI: one is that it calculates compound interest per second instead of per block, and the other is that if its underlying asset pool suffers losses, its exchange rate will drop. This makes it ideal for building risk management derivatives on top of it.

gDAI

Compound first introduced the concept of cToken and cDAI in April 2019, when they released Compoundv2. Like iDAI, it is a tokenization of the lending pool, which continuously accumulates value by lending the underlying DAI to borrowers.

dDAI

Compared with iDAI, it has two core structural differences. One is that it calculates compound interest according to blocks instead of every second; the other is that when the underlying asset pool suffers losses, the exchange rate of cDAI will not drop. In the case of a black swan event, it could lead to a bank run, with the lenders of last resort getting their money back to sustain the entire loss. (Blue Fox Notes: Block is the unit of time in the encrypted world, and second is the unit of time in human society.)

LSDAI

rToken is an ERC20 token, which can be exchanged for its underlying ERC20 token 1:1. The underlying tokens are invested into interest-earning assets through allocation strategies, such as into Compound or Fulcrum. Owners of rTokens are able to configure who is the beneficiary of the accumulated proceeds using the so-called hat definition. rTokens can be used for community funds, charities, crowdfunding, and more. It is also an integral part of dApps that need to lock the underlying assets without losing their earning potential.

idleDAI

gDAI was built by CryptoManiacsZone during the ETHBoston Hackathon. It uses Fulcrum to lend assets, while using GasStationNetwork, Kyber, and Uniswap to facilitate users to pay gas fees with DAI. For the first time, there is a gas-free DAI that can generate interest.

SwanDAI

dDAI is where rDAI meets gDai. It uses Fulcrum's iDAI for lending and Gas Station Network for gas-free transactions. It extends the rDai hat system, creating "recipes". These "recipes" allow callbacks to receive contracts and allow data to be added to the callbacks. It also integrates with GSN, allowing transaction fees to be paid in DAI. This is one of the projects developed during the Kyber DeFi Hackathon.

iSwanDAI

LSDAI is an interest rate exchange based on Market Protocol's derivatives and compound's cDAI, which was first created in ETHBerlin. LSDai has created a structure similar to the euro, which is a futures based on the borrowing rate of Compound DAI during the contract period. It does so by utilizing the Market Protocol, which uses an "iron-cross options" approach to constructing index futures. LSDai eliminates risk on both sides by taking short and long position tokens.

idleDAI is a DAI that acts as a rebalancer for tokenized DeFi. idleDAI was born during the Gitcoin Beyond blockchain hackathon. By depositing your DAI into idle, you can receive idleDAI, and your DAI is automatically lent out in Fulcrum or Compound, depending on maximizing your interest rate. idleDAI is a token in itself, it is easy to combine with other protocols.

AztecNotes

SwanDAI is a synthetic asset that uses the Coinbase DAI/USDC API to exponentially track the deviation of the price of DAI relative to its pegged USD. At expiration, the contract will trade strictly at the index price. Sellers need a time premium to compensate for the estimated risk of DAI decoupling.

zkDAI

iSwanDAI is a synthetic asset that uses the Fulcrum smart contract to track the deviation of iDAI from its highest recorded price. At expiration, the contract will trade strictly at the index price. Sellers get a time premium that compensates them for the risk.

Unlike SwanDAI, swanDAI only covers the risk of DAI decoupling. iSwanDAI also covers the risk of iDAI contract being hacked, the risk that Fulcrum cannot properly liquidate borrowers, and the risk of DAI decoupling. It’s worth noting that this only applies to Fulcrum’s iDAI, not Compound’s cDAI, as iDAI’s exchange rate can drop while cDAI’s cannot. iSwanDAI has not finished building yet.

pDAI

Aztec Notes are a form of DAI that keep sender, receiver, and amount confidential. It does this using zero-knowledge proofs. It does not use ZK-SNARKs. Instead, it uses algebraic zero-knowledge proofs, exploiting Boneh-Boyen signatures to create commitment schemes that embed efficient range proofs in each commitment. This makes Aztec Notes practical and gas efficient when performing confidential transactions.

aDAI

zkDAI uses ZKSNARKs to protect transaction senders, receivers, and amounts. It is the recipient of the MakerDAO API Award from ETHSingapore. It uses an implementation of ZKSNARKs, which is inspired by Zcash. zkDAI notes are spent like UTXOs.

nmDAI

In order to send a specific value to the receiver, you can choose some secret notes whose net value is at least the value you want to trade. This value will be propagated to the recipient in the form of a new zkDai note, and the remaining value will become a new secret note assigned to your key. One downside of this approach is that ZKSNARKs are gas-intensive, so this particular implementation can be expensive.

wxDAI

PoolDAI is a no-loss donation protocol that allows people to pool money together, lend it out, and donate the interest to a cause. It is built on top of Compound, KyberNetwork, TheGraph, and Blocknatvie. It was created by Zefram Lou, co-founder of Betoken.fund.

aDAI is currently being developed by the team at AAVE as part of their decentralized lending pools (DLPs). It is already running on testnet. aDAI works on the same principle as iDAI. Compound interest continues to be calculated every second, and if the underlying asset pool suffers losses, the exchange rate will also drop. This makes aDAI also suitable as currency LEGO for risk management products.

nmDAI is a theoretical DAI that integrates Nexus Mutual into iDAI, idleDAI or cDAI. This would make it an interest-bearing DAI that would hedge against smart contract hacks. It's not finished building yet, just an idea. Hugh Karp said some changes would need to be made at the protocol level before it would be possible.

yDAI

wxDAI is an xDAI wrapped on the Ethereum mainnet in the form of an ERC20 token. xDAI is the native token on the xDAI chain. It realizes mining xDAI on the xDAI chain by locking DAI on the Ethereum mainnet.

MetaDAI/MaxDAI/rfDAI

If the user uses the xDAI bridge to return xDAI, then the xDAI will be destroyed and the DAI will be unlocked. If the user uses the wxDAI bridge to connect to xDAI, then xDAI is locked on the xDAI chain, and wxDAI is created on the Ethereum mainnet. Unlock wxDAI, the exchange rate with xDAI is 1:1, and the exchange rate between xDAI and DAI is also 1:1.