Today, the team at cross-chain protocol Umee announced DAI will be filling that gap.
“The UST collapse made it absolutely clear that the Cosmos ecosystem needs a robust, safe stablecoin,” Umee’s CEO Brent Xu told Decrypt. “Looking ahead, Umee’s broader mission includes creating cross-chain stablecoins and adding Cosmos assets to MakerDAO.”
Unlike Terra’s UST, DAI is an overcollateralized stablecoin with a market capitalization of $6.9 billion. It’s still magnitudes smaller than market leader Tether (USDT), but it’s also built a whole lot differently.
In order to mint, for example, $1 of DAI, you need to deposit up to $1.75 in Ethereum. A host of other cryptocurrencies are also eligible to be used as collateral, including Wrapped Bitcoin (WBTC), Uniswap (UNI), Polygon (MATIC), and others.
Each collateral asset carries its own “minimum collateral ratio,” too, which dictates how much of said asset you need to put up to mint DAI.
Data dashboard DAI Stats indicates that the most popular collateral for minting Maker’s stablecoin is Circle’s USDC. This dominance has also drawn criticism to DAI’s claim of being a “decentralized” stablecoin, given how centralized USDC is.
DAI is already integrated with over 20 different crypto networks, including Solana, Fantom, and Polygon, according to DeFi Llama.
What is Umee?
Though users will technically be leveraging Gravity Bridge, a connector between Cosmos and EVM-compatible blockchains, for their DAI transfers, Xu claims Umee is much more than just a bridge protocol.
“Other protocols use bridges to create wrapped assets—essentially a quantity of a blockchain’s native currency equivalent to the non-native asset. Umee is unlike these protocols,” he told Decrypt. “Instead of building a bridge, we allow users to lend and collateralize, without creating any additional wrapped assets, to get exposure and participate in another ecosystem.”.
In plain terms, this means Umee is building out a tool that would let users lend and borrow typically non-compatible cryptocurrencies.
The idea has earned the attention of several notable investment groups too.
Last June, Umee landed $6.3 million in backing from Coinbase Ventures, Polychain, and others.
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