The DAI Direct Deposit Module (D3M) from MakerDAO, the longest-running DeFi lending network and inventor of DAI, the first decentralized stablecoin, has been integrated into Compound, the permissionless money market mechanism built on the Ethereum blockchain, according to a press release by the company.
D3M supports the connection of Maker’s credit-facility engine with third-party lending pools. This connection makes it possible for MakerDAO to enforce a maximum variable borrow rate for the DAI market on the lending protocols. The MakerDAO Risk team anticipates that the integration will result in an increase of 1.8 million DAI in annualized income for the Maker protocol.
Compound becomes the second protocol, after Aave, to integrate with D3M as a result of the MakerDAO community’s overwhelming approval of D3M’s onboarding to Compound. This establishes DAI as the most liquid and convenient stablecoin to borrow across different loan marketplaces.
D3M is an innovative and one-of-a-kind Maker Vault that creates newly minted DAI and deposits it into the loan market on Compound. The protocol’s users now have access to a stable and consistent DAI borrowing rate, whereas in the past, these customers were exposed to interest rates that were highly variable as a result of the unstable structure of the DeFi market.
“The integration of D3M with lending protocols such as Compound offers a widely available decentralized and transparent method of alleviating interest rates that could spike due to high demand. This integration is in line with MakerDAO’s aim to offer a wholesale line of credit, and high liquidity to borrowers of all sizes, up to the very largest institutions.”
According to the press release, the module gives them the capacity to manage DAI supply on third-party lending platforms, adding credence to the idea that, in the volatile stablecoin market, DAI is the safest and most liquid option.