DIP051 - Add collateral support to s.DAI

Summary

dForce DAO proposes to add lending & collateral support to sDAI.

Background

Savings DAI (sDAI) is a yield-bearing token that represents DAI deposited in Maker's DAI Saving Rate (DSR) module.

Maker increasingly backs DAI with yield-generating assets such as government bonds, and pays a part of the revenue to the users.

In August, Maker introduced an Enhanced DAI Savings Rate (EDSR) which offered initially an 8% annual reward on deposits, as a result, DAI saw nearly $1 billion inflows with a total market cap of $5.2b as of today.

Motivation

By onboarding sDAI to dForce, users will be able to earn DSR while utilizing sDAI as a collateral asset to borrow.

sDAI will serve as a complements to DAI on dForce. DIP045 approved for dForce’s integration with DSR which allows DAI holders to earn lending rate on top of DSR.

Should dForce community approve this proposal, both sDAI and DAI holders (available on Ethereum mainnet currently) will be able to earn DSR and lending interest, while utilizing sDAI & DAI as collaterals.

Specification

• Unlike DAI, sDAI can be used as collateral but cannot be borrowed out.
• sDAI will have the same parameters as DAI. Please visit our docs for details.