Withdrawing DAI without paying high gas fees on Ethereum is now possible
Due to the high costs of gas in the Ethereum network, DAI stablecoin users have to think twice before making a transaction. Depending on the amount, gas prices can add up to as much as 50% of the transaction total. RSK and MakerDAO are offering an alternative that accesses the Rootstock blockchain through Defiant, a non-custodial wallet that supports both networks.
The success Decentralized Finance (DeFI) is having has exerted enormous pressure on Ethereum, the network on which most decentralized apps (dApps) are built.
DeFi activity has increased in the last few months and that is why users have had to pay ever higher transaction (gas) fees to miners. This has made dApp interaction very costly for regular users. For example, at the time of writing, the gas price for a simple token transfer averages to about 28.82 dollars.
This situation has greatly affected users of the stablecoin DAI, which runs on the Ethereum network. Nevertheless, there are other options for making transactions using DAI without paying such high prices, like using the Rootstock (RSK) network through the Defiant wallet.
What is gas?
Every interaction with the Ethereum wallet requires that users pay a gas price, which is measured in ETH units called Gwei (1 billion Gwei = 1 ETH). The more complex a transaction, the more Gwei are needed to execute it. And even though Ethereum wallets allow users to limit the amount of gas they pay for one transaction, there is still a minimum price depending on the number of transactions to be executed at a given moment.
Gas and RSK
RBTC is the native RSK token and it is pegged 1:1 to BTC. It is used as gas to pay for the execution of smart contracts, the same way that ETH is used as gas on Ethereum.
An important characteristic of RSK is that, at current values, transactions on RSK are much less expensive than transactions on Ethereum. For example, at the time of writing, a typical RSK transaction costs less than 15 dollar cents in RBTC.
Cost comparisons between Ethereum and RSK
From DAI to rDAI
So, an alternative to the Ethereum network to make transactions with DAI would be to move from DAI to rDAI, i.e., to transfer DAI from Ethereum to RSK using the Defiant wallet, which supports both networks. Ethereum token bridges designed by the RSK Infrastructure Framework (RIF) team can be used for this purpose. The bridge blocks these tokens in the Ethereum blockchain and mints an equivalent amount on RSK, which guarantees a stable and decentralized exchange rate through smart contracts.
This way, DAI can be used while taking advantage of the low gas prices on the RSK network. Sending DAI from one wallet to another using RSK would can cost up to 80 times less than doing so over Ethereum.
“At Defiant, we have created solutions to make cryptocurrency transactions easy and economical for everyone. The integration of rDAI solves a problem for millions of users around the world who use DAI to save or to send money abroad,” points out Fiorella Scantamburlo, CMO at Defiant.
The problem with gas on Ethereum will finally be addressed on Ethereum 2.0. But the update, which will be implemented in stages and will make far-reaching improvements on the network, might take years to complete. In the mean time, we have to look for other options.