RSK & RIF (RSK Infrastructure Framework) boost financial services on top of Bitcoin as they integrate DAI
DAI stablecoin is now available on RSK platforms fostering interoperability amongst different blockchains through the RSK-Ethereum Token Bridge allowing users and dApps to use DAI on RSK Bitcoin Sidechain. As a result the integration DAI is now accessible for all BTC-backed defi products including the RIF token and its variety of protocols.
The integration is expected to boost decentralized financial services on Bitcoin. DApp developers will be able to create apps on RSK that connect to the Ethereum ecosystem and tap into its network effects and liquidity, while benefiting from its scalable and low cost smart contract framework. Users will be able to send microtransactions and interact with smart contracts for services such as staking and lending.
The Bitcoin-Ethereum bridge has been audited by ToB and reviewed by the Maker Foundation Integrations Team. The interoperability bridge locks the original token such as DAI on the Ethereum blockchain while minting an ERC777 ‘side token’ that can move freely on the RSK network. This maintains the existing supply of tokens while allowing them to be distributed between chains.
At a time where Ehtereum gas prices have reached high levels, this integration provides the possibility to access DAI at a low cost through the RSK blockchain. Interoperability between blockchains is gaining more traction and at an all time high fees, moving tokens to RSK at much lower fees seems like a natural choice.
DAI will also be accessible to bitcoin-backed defi products and users of RIF ecosystem and protocols.
A number of BTC-adjacent dApps are integrating DAI including Sovryn, Aave, AvalDAO and Chainlink. In addition, rskswap.com has created liquidity pools for RBTC-DAI and RIF-DAI, enabling the stablecoin to be swapped for 1000x less than on Ethereum http://rskgasstation.info).
By bringing the tools and assets that power decentralized finance to a Bitcoin environment, DAI integration with RSK, and RIF token community, can fuel growing demand for defi assets and applications.
How it works?
The Dai you want to cross are locked by the Token Bridge Smart Contract and an event is emitted with all the information about the transaction. This event is listened to by the validators; they check the information and resend the event to the token bridge smart contracts on the other chain, in this case RSK. Once the majority of the validators acknowledge the transaction, the Token Bridge mints the same amount of tokens in a mirror token to the same address that originally called the bridge. The mirror token has the same ticker but an R or a E depending on the network, in this case, the mirror is called RDai.