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In the letter
- ETC Labs has partnered with Chainsafe Systems to bring DAI stablecoins to the Ethereum Classic blockchain.
- DAI stablecoins are used in many DeFi applications.
- ETC has recently undergone several high profile hacks.
Ethereum Classic and Ethereum separated much earlier DeFi had captured the minds and ETH tokens of crypto users.
ETC Labs, a group of users and developers who help maintain the original Ethereum blockchain, wants to rectify this situation. Today announced plans for a new bridge between the Ethereum Classic and Ethereum blockchains, enabling DAI stablecoin to be exchanged between the two.
The COME ON bridge, operated by Chainsafe Systems, will potentially give DeFi a boost by adding more users who are familiar with the ins and outs of the Ethereum infrastructure, but who don’t necessarily use the ETH token.
“The launch of the DAI-ETC bridge is scheduled for November 18 and will be the first of many efforts that will give the ETC community direct access to DeFi projects,” said ETC Labs CEO Terry Culver. Decrypt. “We are currently working on the listing on various platforms and are working on several projects to be built directly on ETC, and we invite other projects to join us.”
DeFi, short for decentralized finance, represents a group of controlled applications that run automatically smart contracts which allow users to receive loans or earn interest on cryptocurrency deposits as they would from a bank, but without the need for a centralized institution.
The Chainsafe bridge will use technology similar to renBTC and other cross-chain transfer solutions, locking DAI on one chain and minting an equivalent token on the opposite chain. Moving DAI to the Ethereum Classic blockchain will give ETC users access to the third most popular dollar-linked stablecoin used in DeFi applications, after Coinbase-backed Tether and USDC.
“We are proud to partner with ETC Labs using ChainBridge to connect DAI to ETC,” Gregory Markou, CTO of Chainsafe, said in a press release. “This is a huge step towards financial inclusion and for enabling people and organizations to build and innovate through blockchain and other distributed technologies.”
Ethereum Classic diverged from the Ethereum blockchain after a change to the protocol’s underlying rules, known as a hard fork, was made in June 2016. The fork came after one of the first support organizations for the young Ethereum project, just a year old at the time, it was hacked for $ 55 million.
The Ethereum community at the time, much smaller than it is today, decided to execute a single fork of the protocol to return the compromised funds, but not everyone agreed with the plan. Holdouts, which felt forked to help return compromised funds, violated the basic principles of immutable cryptocurrency blockchains, continued to keep the original Ethereum blockchain; make up today’s Ethereum Classic community.
Ethereum Classic could use the extra attention. The ETC blockchain holds a fraction of the value of the prevailing Ethereum blockchain, with a market capitalization of $ 631 million compared to ETH’s $ 45 billion. Furthermore, the low hash rate of the network made the project vulnerable to attacks by 51%, in which a user with sufficient leased mining power was able to rewrite the ETC blockchain on multiple occasions to inflate their holdings and steal millions from affected exchanges.
DeFi apps are already starting to make their way onto other blockchains, such as Solana is Tezos. Perhaps a new stablecoin bridge will help give new life and development to Ethereum Classic as well.
