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The Dai stablecoin produced by decentralized lending protocol MakerDAO is getting some speed and fee enhancements with its forthcoming upgrade on layer-two.
Ethereum scaling solutions provider Optimism will provide the technology as announced on the MakerDAO forum on March 9. Co-founder and CTO of gaming firm Bellwood Studios Sam MacPherson explained the “MakerDAO community will be launching an ‘official’ DAI on Optimism L2” and that the Optimism Dai Bridge would offer improvements on other implementations.
He stated that currently, Optimism requires a seven day lockup period when withdrawing tokens back to layer-one (Ethereum) as the rollups rely on publishing the data on the blockchain and allowing a challenge period for potential fraud proofs.
The Maker protocol can reduce this lockup period and allow near-instant withdrawals of Dai, he added.
The Optimism Dai Bridge will allow fast withdrawals by locking up L1 Dai to mint L2 Dai as well as allowing the stablecoin to be burned in exchange for near-instant access to L1 Dai. The mechanism of creating and verifying the two types of Dai was explained in depth on the forum, with MacPherson adding:
“This is a game changer not only for the Maker protocol, but the Ethereum ecosystem at large as we can finally offer a fast, trustless, decentralized off-ramp for optimistic rollups.”
With the Bridge, Maker has an opportunity to become the primary off-ramp for Optimism, the post continued. The scaling solutions provider described it as an “extremely cool and technically elegant solution”.
Incredible work! An extremely cool and technically elegant solution to fast exits out of L2 by the maker team. https://t.co/8cMeJK5wL5
— Optimism (@optimismPBC) March 9, 2021
The announcement added that the initial bridge would be launched “soon” but fast withdrawals are not expected until Q3 or Q4.
Optimistic rollups are already being trialed by DeFi protocol Synthetix which announced a staged layer 2 transition for the platform in mid-January following several months of testing and incentives for participants. Uniswap is also rumored to be looking at Optimistic rollups for its highly anticipated upgrade to version three later this year.
Optimism announced a $25 million Series A funding round led by venture capital firm Andreessen Horowitz (A16z) on Feb. 24.
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Author: Refer to Source Cointelegraph By Martin Young