Today, I would like to announce that Maker will be the first third-party project to make use of Loom’s cross-chain gateways.
Just in case you weren’t aware… Maker is the creator of the number one decentralized stablecoin: Dai.
Together, Loom and Maker will turn Dai into a multichain token by bringing it onto other major chains — starting with Tron.
Maker is a household name in the Ethereum community, but if you haven’t been following the news, it is the largest decentralized finance (DeFi) product in existence — Almost 350 million dollars worth of assets are collateralized in Maker today. Those assets are used to generate Dai, a decentralized stablecoin that is battle-tested and trusted in the community. However, because Dai is an ERC20 token, it has always been inaccessible to anyone who isn’t a user of Ethereum. More than that, DeFi products that make use of Dai like Compound or dYdX (which together hold roughly $150M in assets) are also restricted to just Ethereum.
Needless to say, it will significantly open up the number of users and developers if Dai were able to exist on other Layer 1 chains as well — and that is exactly what is happening today. Using Loom Network gateways, Dai will now be able to exist on other popular Layer 1 blockchains natively.
How Does it Work?
Loom Network gateways allow tokens to be transferred between Layer 1s by using Basechain as a transit hub. For example, an ERC20 token like Dai can enter via the Ethereum transfer gateway and exit via the Tron transfer gateway as a TRC20 token.
You also have a ton of options during each transaction. For example, if you want to deposit 10 DAI from ETH and transfer 5 to Tron and 5 to Binance Chain — that’s totally doable. Or you can use the DAI on Loom Basechain to play some games (gas-free, of course), and then withdraw it along with your winnings to the chain of your choice.
Why Tron First?
Right now, the largest stablecoin on Tron is USDT, and we believe a decentralized collateralized coin would serve the users of that chain greatly. There is a huge market opportunity for all the games on the Tron chain to accept payments using Dai. And in doing so, we may even start to see some DeFi apps pop up on Tron.
Is it Secure?
The transfer gateways are secured via a multisig that requires three quarters of the validators on Loom Basechain plus one to sign off on any transfers, making it safe for million-dollar transactions. Additionally, we’ll start with just enabling Testnet transfers first, so we can thoroughly test this before it goes live in production.
The Bigger Picture — Decentralized Money Everywhere
As far as mainstream adoption is concerned, Dai is decentralized money. People have been receiving their salaries in Dai (shoutout to ConsenSys for doing a great job with this) and shops have been accepting Dai as payment. But in order to make decentralized money really great is to make it available everywhere — as accessible as possible. The idea is that one day soon, a user can pay for a product using Dai regardless of what app, wallet, or chain they are using.
To Sum Up
With any type of currency, it becomes more useful as more people and places accept it. Thus, Maker adding support for Tron and soon other chains makes complete sense — and using Loom Basechain is the fastest way to make this happen.
Dai being supported on Tron, Binance Chain, and other major chains means we’re one step closer to creating a multichain DeFi system — with more and more developers using Loom Network to scale their dapps and projects.
What will you be building on Loom?
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