#17 Add Axelar DAI to Parity Stability Module

This discussion thread is meant to evaluate a proposal to

  1. make an ERTP issuer called DAI_axl out of the cosmos denom below, and
  2. start a new PSM contract to trade it for IST.


Launched in 2018 DAI is the largest decentralized stablecoin, and fourth largest by market cap. All collateral backing DAI is completely transparent and accounted for on the Ethereum blockchain. Dai is collateralized using many different assets, some with counter party risk and many assets with no counter party risk, managed by MakerDAO. Over its history DAI has shown great resilience in the face of market volatility.

Some of the reasons to list DAI in addition to USDC or USDT could be:

  • DAI is the 3rd most liquid stablecoin in Axelar bridge with ~$5M. By supporting DAI we could capture a constant liquidity flow and offer a decentralized alternative stablecoin for users
  • DAI cannot be frozen, so if Circles/Tether froze Axelar/Gravity bridge deposit contracts on Ethereum, users would not be able to move funds back to mainnet through USDC/USDT, but in the meantime DAI can still be transferred freely
  • Even if USDC backing DAI was frozen, underlying collateral within the Maker protocol is still held for the benefit of DAI holders so the odds of losing money is very low.
  • DAI has many use cases within the Cosmos ecosystem. DAI is the 2nd most liquid stablecoin in Osmosis pools, making it an ideal option for arbitrage opportunities that could be beneficial for IST users

DAI has a proven track record as a useful medium of exchange and should be included in the PSM.

This is a swingset-core-eval proposal. If passed,
the enclosed JavaScript code is executed and granted
access to the powers enumerated in the enclosed permit.
The IBC denom is a result of a transfer from axelar-dojo-1.

We double-checked it as follows:

$ agd query ibc-transfer denom-trace 3914BDEF46F429A26917E4D8D434620EC4817DC6B6E68FB327E190902F1E9242 --node=https://agoric-rpc.polkachu.com:443
  base_denom: dai-wei
  path: transfer/channel-9

{ "consume": { "agoricNamesAdmin": true, "bankManager": true, "board": true, "chainStorage": true, "zoe": "zoe", "feeMintAccess": "zoe", "economicCommitteeCreatorFacet": "economicCommittee", "provisionPoolStartResult": true, "psmCharterCreatorFacet": "psmCharter", "provisionPoolStartResult": true, "psmFacets": true, "chainTimerService": "timer" }, "produce": { "testFirstAnchorKit": true }, "installation": { "consume": { "contractGovernor": true, "psm": true, "mintHolder": true } }, "instance": { "consume": { "economicCommittee": true } }, "issuer": { "produce": { "DAI": true }, "consume": { "DAI": true } }, "brand": { "consume": { "DAI": true, "IST": true }, "produce": { "DAI": true } } }

/* global startPSM */ // @ts-nocheck /** * @typedef {{ * denom: string, * keyword?: string, * proposedName?: string, * decimalPlaces?: number * }} AnchorOptions */ /** @type {AnchorOptions} */ const anchorOptions = { keyword: 'DAI_axl', proposedName: 'DAI', decimalPlaces: 18, denom: 'ibc/3914BDEF46F429A26917E4D8D434620EC4817DC6B6E68FB327E190902F1E9242, }; const config = { options: { anchorOptions }, WantMintedFeeBP: 0n, GiveMintedFeeBP: 0n, MINT_LIMIT: 1_000_000000n, }; /** @param {unknown} permittedPowers see gov-add-psm-permit.json */ const main = async permittedPowers => { console.log('starting PSM:', anchorOptions); const { consume: { feeMintAccess: _, ...restC }, ...restP } = permittedPowers; const noMinting = { consume: restC, ...restP }; await Promise.all([ startPSM.makeAnchorAsset(noMinting, { options: { anchorOptions }, }), startPSM.startPSM(permittedPowers, config), ]); console.log('started PSM:', config); }; // "export" from script main;

Contributions to this proposal from @Facundo and @dckc


tagging @chrisberg for comment as well as other members of the economic committee

There doesn’t seem to be any dissent (nor comments, lol).
How about posting over in Signaling Proposals as the BLDer DAO has to vote on it anyway.
Might as well include Gravity Bridged DAI as well!

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Dear @kennyrowe ,

This is Youssef Amrani, from Inter Protocol Econ Committee.

First, thank you for your contribution as well as @Facundo and @dckc

The EC supports the addition of DAI to the PSM. We’ve been talking about this so your suggestion has a strong support amongst us. DAI has proved to be a robust and resilient decentralized stablecoin over the years.

One thing we (EC) suggest is to also add the Grav DAI, the rationale being to:

  • Diversify the bridge risk
  • Collect early data points on what bridges are more popular.
  • Currently, USDC & USDT from both Axelar and Gravity Bridge are used as collateral for IST so we don’t suggest to create an imbalance by having only one bridge for DAI.

Please let us know if you’re aligned with the EC view on adding both Axelar and Gravity Bridge contracts for DAI.


Thanks for the feedback! @yamrani @SeanDay

Yes, I completely agree with you. The reason not to include Gravity in the first place was just that DAI doesn´t have much traction in that bridge, but we could certainly include grvDAI to leave the users the final decision by giving them a complete view about the options available.


Hi there, we support the proposal

how will you manage frozen USDC or USDT? will the protocol cover that to benefit holders?

Good to know…

On that part, perhaps start a new thread? It seems a bit off topic for this thread on adding DAI.

DCF is supportive of this suggestion. Is someone able to put together a proper proposal and get it up to initiate the discussion period (prior to it going onchain for a vote) on Commonwealth? @kennyrowe

This proposal is proper as far as I can tell. The discussion period has been going for about 10 days now.

This is the preferred place for governance discussion since Oct 14:

Note that such discussion is migrating to new forum infrastructure: https://community.agoric.com/


There has been a suggestion made that we delay on pushing the proposal to a vote until after the Thanksgiving Holiday in the USA. The concern largely relates to the availability of staff at both validator operators and on the Agoric team (which also, believe it or not, does take some time off!). Best not to add complexity at a time when staffing levels are likely to be suboptimal, at least in some places, along the critical path.


DAI is available via Gravity Bridge via the denom:
18 decimal places

This can be verified by querying the blockchain:

agd query ibc-transfer denom-trace 3D5291C23D776C3AA7A7ABB34C7B023193ECD2BC42EA19D3165B2CF9652117E7 --node=https://agoric-rpc.polkachu.com:443
Denom_trace: base_denom: gravity0x6B175474E89094C44Da98b954EedeAC495271d0F
path: transfer/channel-4

and the Maker contract for DAI can be verified on Etherscan at: Maker: Dai Stablecoin | Address 0x6b175474e89094c44da98b954eedeac495271d0f | Etherscan

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I fixed the line breaks and folded the Gravity part in and did some detail testing on a local chain.

For details, see:

Meanwhile, folks interested in flexible governance using Hardened JS may find my post on swingset.CoreEval relevant.

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Testing on emerynet here https://emerynet.explorer.agoric.net/agoric/gov/11


Live proposal Big Dipper | Agoric Block Explorer

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Yea! Passed. Welcome DAI :slight_smile:
Yes 944 of 952 votes (100.00%) 236,129,034.32262 (less than 0.00% for the other votes)
No (0.00%) 1,328.961256
Veto (0.00%) 311.183821
Abstain (0.00%) 6,399.247242


Super happy to see DAI supported as IST collateral :smiley:

I just used up available capacity on DAI.grav, and looks like DAI.axl is also fully utilized (999/1,000). Wondering if there’s any plans to increase limits over time?

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Minting limits have been raised!
See https://community.agoric.com/t/statement-from-the-ec-regarding-new-minting-limits for details and https://analytics.inter.trade for the current mint status.

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We’re also very excited to support DAI, let’s hope we can bring native DAI one day to Cosmos:)
Any plan to do that at some point?

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None I’m aware of in the short term, but theoretically Maker teleport (native DAI bridge) could support Cosmos chain(s) the future! Believe the top priority is linking with Ethereum L2s and then considering additional environments after activating there.

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Not sure you’re aware but USDC will be issued natively on Cosmos through Interchain Security (Launch: January 2023), secured by the Cosmos Hub. It will be a generic asset issuance chain that can be used to natively issue other assets. Can definitely put you in touch with folks managing Interchain Security to explore this.

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