Opening a new market for Dai (and MKR, but this post is to talk about Dai) requires the interest of the project/network/Dapp/etc. -partner- in integrating Dai. This interest comes from the analysis of knowing that integrating Dai will help them attract more users and improve the usability of their product.
Once Dai is integrated into the product, it requires a market capable of fulfilling users’ requests. Although Dai liquidity grows in time, there has to be someone deploying the initial capital to get the appropriate traction during the launch. The initial capital could vary depending on the product’s market size and the demand of this new Dai market.
@Growth-Core-Unit is talking with THORChain, a decentralized liquidity protocol. Currently, USDC and USDT pools are live on THORChain, and if we manage to have a DAI pool, this will enable people to swap native, non-wrapped L1 assets (BTC, LTC, BCH, BNB) for DAI in a permissionless, non-custodial way for the first time (how awesome is that?).
To activate the pool, someone has to provide DAI liquidity. This someone will receive the fees generated from trades (The existing stablecoin pools are currently between $6-12MM in depth and have APY >20%), but that someone is also exposed to impermanent loss (this is a DAI:RUNE pool) and the risk associated to the THORChain protocol. This someone could be:
- Pros: they take the riks
- Cons: they take the profit of the pool, and we also have to pay them (nothing is for free)
- We could build a D3M similar solution knowing that:
- there is no LP token at the moment. The protocol tracks things internally
- Assets are Cosmos-based
- They could take the loan from Aave
- Why do they would do that if we are interested in opening a new market (they already have other stablecoins)
- Pros: it could be created to support other new projects that integrate Dai, and if we do a good risk assessment, it could be profitable
- Cons: it doesn’t exist
We want to know your opinion about this. Although this matter comes from the specific case of THORChain, we are talking with others about the same, and it would be great to have a solution not just for THORChain but for all other new markets that the multi-chain strategy is about to bring.