Tokenizing interest cash flow from cDAI
Compound v2 introduced cTokens, allowing users to have an ever appreciating asset to move to cold storage. We took this one step further.
rDAI tokenizes the ownership of interest that is accrued by underlying interest earned from the staked cDAI. These rDAI tokens allow you direct the flow of interest earned from your cDAI to other parties while effectively owning full control of the principal DAI that is staked.
How this works…
- A user deposits DAI into the rBank and the contracts deposit the DAI into Compound to generate cDAI.
- Instead of the user gaining a continuous interest earned from the cDAI, they generate an ERC-20 token called rDAI, that is always redeemable for the original quantity of DAI.
- The owner of this rDAI is free to assign (to themselves or others) the continuous interest earned on the original principal amount of DAI that is staked into Compound.
- The user can then send their rDAI to any other address and that address that owns the rDAI will then be able to assign the interest accrued by the underlying rDAI.
- Users can keep the interest rDAI themselves or pledge it to a pool with one or multiple beneficiaries.
- Every rDAI is fully backed by cDai (and other similar assets in the future), which the original depositor owns and control at all times.
- rDAI is designed to be as fungible as any ERC20 token on Ethereum. But it also never stops accruing interest. Even if you stake it, lock it up in a contract, or transfer it to someone else. It NEVER stops.
- rDAI is easy to integrate and will work with any wallet, as it is based on the ERC20 standard. We have also designed the mechanisms to ensure contract addresses can participate fully in the rDai ecosystem without needing to be redeployed.
We believe rDai will allow for much faster prototyping of new funding mechanisms for dApps, DeFi, and organizations in general.
rDAI is a way for contracts to monetize funds, allowing dApps to make money off deposits in a very simple way. As soon as an address gets some rDai, it start accruing interest for the designated beneficiary. On and off ramping your users by swapping DAI for rDAI is also very easy, with our mint() and redeem() functions.
A bounty platform with no fees. A casino app with no fees. An NFT based game where you can mint new items based on deposits
A layer2 solution for payments, exchanges, or games, but with no entry or exit fees, fully monetized by investing user deposits.
A smart contract wallet where the developers automatically invest their user’s money, but can decide to keep a part of the generated interest.
This is the fintech holy grail: apps becoming like banks with a two line integration.
P.S. The use-case that we have built our website around is for users to donate their funds to charitable causes and community organizations (no-loss donations). We hope this will become a major funding opportunity for these orgs, and we are happy to add more to our website if you have any suggestions.
Interested in learning more about rDAI ?
Special thanks to @peterpan for re-designing our logo and helping out with this article