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- 1 wETH Multi-Collateral DAI repayments increased recently, suggesting a trend for Ethereum.
- 2 Ethereum’s price and resistance zone showed an intriguing market environment.
Multi-Collateral DAI repaid has historically had an impact on the price of Ethereum, particularly on its wrapped form, Wrapped Ethereum (wETH). Notably, this measure has recently increased.
Recent developments, according to an article by Santiment, might lead to a positive trend for Ethereum. The Multi-Collateral DAI Repaid chart shows that wETH was used to return 43.42 million coins.
Prior occurrences of spikes in this statistic were related to bottoms and peaks in the local market. A deeper look at the graph reveals that the most recent peak took place on February 18 and entailed the payback of more than 78 million coins. The price of wETH and ETH rose significantly after this hefty repayment, reaching a regional high.
What is Multi-Collateral DAI
MakerDAO is the protocol that powers Dai. It is the first decentralized stablecoin in the world and is based on the Ethereum blockchain. Dai has one of the lowest market caps among stablecoins, with a debt maximum of $120 million. The assumption is that the Dai supply will increase much quicker in the years to come with the emergence of new collateral. This would make it possible for anybody to get a steady loan (in the form of Dai) using an unlimited number of currencies from anywhere in the world, MakerDAO now functions as a decentralized bank.
Single-Collateral Dai as it now exists will be referred to as “Sai,” and Multi-Collateral Dai will be called “Dai.” The Migration Portal may be used to easily upgrade users’ Sai to Dai (more on migration below). Users who upgrade get a number of benefits from Multi-Collateral DAI, including the Dai Savings Rate and additional collateral alternatives.
Relation Between wETH and Ether
wETH is an ERC-20 token that is intended to stand in for Ether (ETH) on the Ethereum network. It makes it possible for Ether to be utilized in decentralized apps (DApps) and it also allows the use of Ether in smart contracts..
Ether is compatible with the ERC-20 standard when it is wrapped. Every wETH token is supported by an equal quantity of Ether held within a safe smart contract’s safekeeping. Although Ether and wETH are separate assets, they may be swapped directly at an equivalent value. These tokens may be used in apps built on the Ethereum platform and are freely tradable and transferable.
The phrase “Multi-Collateral DAI” describes the stablecoin DAI’s enhanced capabilities. DAI’s forerunner, SAI, could only take ETH as collateral at first and was limited to the Ethereum network. However, the token is now interoperable with a variety of smart contracts thanks to the launch of Multi-Collateral DAI.
This improvement made it possible to generate DAI using a variety of coins as collateral. The stablecoin may now be backed by a wider variety of assets as a result. In essence, Multi-Collateral DAI has broadened the alternatives for collateral beyond ETH, enabling the use of several cryptocurrencies to acquire DAI.
The Current Trend
Although it was predicted that this would have an influence on ETH’s price trend, the current daily period showed no evidence of any substantial changes. ETH was trading at about $1,790 as of the time of this writing, with a little loss. It is important to take note of the short-moving average’s new status as a resistance area, which was located around $1,890.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
