The MakerDao community has completed the transition to its multiple collateral Dai (MCD or Dai) system from the single collateral Dai (Sai) system leading to a complete shut down of the Sai system.
The Sai system was previously only backed by ETH collateral while the new MCD system would be backed by an array of assets including ETH, WBTC, BAT and USDC making it more feasible and dynamic for the public to access the ever-growing defi ecosystem.
The update from Sai to Dai would not only provide an array of assets to collateralize but also offer Dai Savings rate rewarding users with variable interest rates which are paid out in Dai. The multi-collateral Dai system was activated back in November 2019, and since then, a majority of the users started the migration to MCD from Sai owing to better options and liquidity features.
There was no urgency in shutting down the Sai system when the Dai protocol was activated back in November however. The discussion around Sai intensified in recent times, and the Emergency Shutdown (ES) came about on April 24th through a community vote, the MKR Oracle was deactivated with a grace period up to May 12th.
The main reason behind intensified shut down discussions was the growing concerns over liquidity for the Sai system.
Users were able to migrate their Collateral Debt Position (CDP) to MCD through various platforms including Uniswap and Kyber before the official shutdown on May 12th. Now they would be required to manually exchange their tokens for ETH through migration portals.
Given the increasing demand for decentralized finances and liquidity issues with the Sai system, it was only a matter of time before the system was completely shut off. Now with the Dai system, users can withdraw loans against multiple assets, offering more liquidity within the ecosystem and also expanding the domain of the defi.