I have been looking at ways for MakerDao to expand across other chains as a means of accomplishing 3 core goals:
- Reduce fees associated with interacting with MCD smart contracts.
- Allow additional collateral types that do not exist on Ethereum.
- Foster growth and bring additional liquidity (and users) into the system.
The first project that caught my eye was Cosmos via Tendermint core and the Cosmos SDK (software development kit). It allows for limited interoperability through the Inter Blockchain Communication (IBC) protocol. It will also allow connection to live blockchains through peg zones. This is actually also the same thing that Binance smart chain was built on (they forked Cosmos as far as I understand to build the Binance smart chain). So suffice it to say that one option is COSMOS or BINANCE for interoperability.
The second option that caught my eye was Polkadot The Polkadot project is supported by a good technical team led by Dr. Gavin Wood, co-founder of Ethereum. Polkadot allows the transfer of data and value between different blockchains of its ecosystem. It is a very development-oriented project and many teams have elected to build on Substrate, Polkadot’s technology for creating Blockchains. This is similar to what Cosmos and Binance could offer but at least it would further enhance the interoperability by also allowing data to be transferred cross chain.
The third and in my opinion most functional option is Fusion. Fusion is an upgraded fork of Ethereum so transferring code would be relatively simple. Fusion allows for full interoperability between chains (this includes Cosmos, Binance, and Polkadot in addition to the chains it can connect to directly) through what Fusion calls DCRM (distributed control rights management). This can be simplified best as a group of nodes that in a fully secure and decentralized manner creates accounts on any target blockchain directly as a group. It then shards the private key of that account and splits it among the DCRM nodes and then passes authority to use that key to your Fusion account allowing you to control all of the other blockchains from one account on Fusion in a fully decentralized manner. This is full interoperability and it includes decentralized custody.
Any or all of these options I think would be highly beneficial for MakerDao to expand into. I feel like Fusion is the simplest and most efficient because it is already Ethereum but with gas fees that are more along the lines of one hundredth of a cent per transaction rather than Ethereum’s at least 25 cents each send. Expanding into these cross chain platforms would allow for all 3 of the goals I mentioned above to be met and would also help future proof MakerDao and keep competing lending platforms from gaining any significant advantage over MakerDao by allowing cross chain functionality first. What does everyone think?