Introducing automatic CDP migration to Multi-collateral Dai
It has been a full week since the launch of Multi-Collateral Dai and, while the supply of new Dai has been growing steadily, the migration…
It has been a full week since the launch of Multi-Collateral Dai and, while the supply of new Dai has been growing steadily, the migration process so far wasn’t without hiccups. Some users have simply been unable to upgrade their CDPs to the new Maker protocol despite their desire to complete the process.
The way the migration process has been designed is pretty clever. Here’s a quick rundown: Sai holders can upgrade their funds to Dai at a fixed 1:1 rate. This is thanks to a special, one-of-a-kind MCD CDP (also called the migration contract) that uses Sai as collateral and generates Dai. This means this newly generated Dai in MCD is backed by locked Sai which we know is backed by ETH, although this ETH is still locked in SCD.
The locked Sai then sits in the MCD migration contract, waiting for CDP owners wanting to upgrade. Their migration involves converting Sai debt to Dai debt, a process during which locked Sai is destroyed and their CDP’s debt is converted to Dai. The Dai that was previously backed by Sai in MCD thus becomes directly backed by ETH, which is the ultimate goal.
However, the issue so far has been that the available Sai locked in MCD necessary for CDP upgrades has been almost constantly low. Many CDP owners wanting to upgrade have been forced to keep track of it in order to jump in on the action as soon as it hits their required amount.
This is why we wanted to create an easier solution for upgrading CDPs to MCD.
Automatic CDP upgrade
We are introducing an automatic CDP upgrade feature to DeFi Saver so you don’t have to keep checking what’s the current locked Sai availability in the migration contract. Instead, our system will keep checking for you and simply upgrade your whole CDP once there’s enough Sai available. Simple as that.
This is a trustless system, just like our CDP Automation is. In order for the automatic CDP upgrade to be possible, you only need to provide the required permissions to DeFi Saver’s smart contracts so it can trigger and complete the upgrade process for you once the conditions are met. The only requirements are that your CDP is on the standard DSProxy (if it’s not our Maker dashboard will offer the option to migrate) and that you have at least 20 Sai debt.
There are no fees associated with this feature and you’ll only need to pay the gas cost of the transaction that triggers and completes the upgrade, which will be charged to your CDP’s ETH collateral in the same way our CDP Automation works (with the maximum possible gas price hardcoded at 50 gwei). One last thing to note is that the system works on a first-come-first-served basis.
If you’re tired of looking at Dai Stats waiting for the right moment to upgrade, then these are the steps to enable automatic upgrade for your CDP:
1. Open the DeFi Saver MakerDAO dashboard and connect your wallet (Trezor, Ledger, MetaMask and all mobile web3 wallets are supported).
2. Your current CDP will be loaded and you will be welcomed with a notification about the option to upgrade your CDP to MCD.
3. Clicking the Upgrade button will initiate the process and you will be offered with two options for migration — Regular or Automatic.
4. Once you select the Automatic option and click Next, the following step will be to select how you would like to pay your CDP’s current stability fee. with 3 options available: (1) using MKR in your wallet, (2) using SAI in your wallet or (3) generating new SAI from your CDP. Paying the currently owed stability fee is a required step for migrating your CDP to MCD and in case of Automatic upgrade, the accrued stability fee will be paid the moment the upgrade is done.
If you want to be notified when the upgrade happens, you can enter your email address, though this is completely optional.
Also note that you’re free to actively manage your CDP until the migration happens. The system will keep track of your CDP’s stats so it knows when the upgrade will be possible.
5. Once you confirm the transaction, you’re all set. We’ll let you know once the upgrade is completed and you can sit back and relax until then.
In case you have CDP Automation enabled for your CDP, please note that you will need to enable it again once the upgrade is completed in order to have automatic liquidation protection and leverage increase active for your MCD CDP.
We can’t give any estimates on when subscribed CDPs will be upgraded to MCD, but the available SAI liquidity in the migration contract should greatly improve once some of the exchanges starting converting their SAI to DAI in early December.
If you have any additional questions please feel free to join us in the DeFi Saver discord.
💬: Official Discord
📢: Official Twitter account