The makers of DAI stablecoin, MakerDAO is one of the oldest and largest DeFi protocols and now look forward to integrating on Ethereum L2-based network StarkNet. The huge transformational step was considered by MakerDAO to address the problem of network congestion and the high transaction cost.
Through StarkNet the users will be allowed to mint and trade DAI at a faster speed and cheaper rate. It is presumed that the transaction fees will go to improve by 10x as compared to the fees on the Ethereum mainnet.
MakerDAO looks forward to expanding its roadmap for multichain integrations. The Ethereum-based protocol not only partnered with StarkNet but previously integrated Arbitrum and Optimism also. Both the networks function differently but to achieve a single goal of scaling.
The four phases of deployment
The migration will go to take place from April 28 onwards where the process is divided into four strategic parts. The first step will be bridging the two main blockchains i.e. the main blockchain and the StarkNet Layer 2 (L2) Ethereum solution and will go live on April 28.
Following to the first step, the second phase will consist of a ‘Maker Wormhole’ through which the fast withdrawal process from L2 to L1 will be completed. According to MakerDAO’s engineer Louis Baudoin, such transactions will take only a couple of minutes to complete. According to Louis, the wormhole is a ‘burn-and-mint’ mechanism used in the withdrawals process. Therefore, the issue of transferring the DAI tokens from one L2 blockchain to other L2 blockchain is resolved and it takes only few minutes to process.
As per the third phase which is ‘teleportation’ the users will be able to perform multichain transactions. For instance, you can transfer DAI from StarkNet to Arbitrum.
And the last phase is the fourth phase where rebuilding of multi-collateral DAI (MCD) on StarkNet will be involved. The process of deploying MCD will take place by Q4 of 2022 or by Q1 of 2023. Deploying MakerDAO on StarkNet will allow users to mint and trade DAI faster and at a cheaper cost.
However, Louis Baudoin the StarkNet Core Unit at MakerDAO stated, the transactions related to minting and the fees beared by Oracles makes up the most of the gas fees. After deploying MDC on StarkNet, the minting cost will be as low as 10x on the platform than on the Ethereum mainnet.