- ETC Labs has partnered with Chainsafe Systems to bring DAI stablecoins onto the Ethereum Classic blockchain.
- DAI stablecoins are used in many DeFi applications.
- ETC has recently suffered several high-profile hacks.
ETC Labs, a group of users and developers helping maintain the original Ethereum blockchain, wants to rectify that. It announced today plans for a new bridge between the Ethereum Classic and Ethereum blockchains, allowing DAI stablecoins to be swapped between the two.
The DAI bridge, operated by Chainsafe Systems, will potentially give DeFi a boost with the addition of more users familiar with the ins and outs of Ethereum infrastructure—but who don’t necessarily use the ETH token.
“The DAI-ETC bridge is scheduled to launch on November 18, and it will be the first of many efforts that will give the ETC community direct access to DeFi projects,” ETC Labs CEO Terry Culver told Decrypt. “We are currently working on listing on various platforms and are working with several projects to build directly on ETC, and we invite other projects to join us.”
DeFi, short for decentralized finance, represents a group of applications controlled by automatically executed smart contracts that allow users to receive loans or earn interest on deposits of cryptocurrencies like they would from a bank, but without the need for such 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 onto the Ethereum Classic blockchain will give ETC users access to the third-most-popular dollar-pegged stablecoin used in DeFi applications, after Tether and Coinbase-backed USDC.
“We are proud to be working with ETC Labs using ChainBridge to connect DAI with ETC,” Chainsafe CTO Gregory Markou said in a press release. “This is a huge stride towards financial inclusion and to empowering 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 underlying rules of the protocol, known as a hard fork, was carried out in June 2016. The fork came after one of the earliest supporting organizations for the young Ethereum project, just one year old at the time, was hacked for $55 million.
The Ethereum community at the time—much smaller then than it is today—decided on a one-time fork of the protocol to return the hacked funds, but not everyone was on board with the plan. The holdouts, who felt forking to help return hacked funds violated the basic principles of immutable cryptocurrency blockchains, continued maintaining the original Ethereum blockchain; they make up the Ethereum Classic community of today.
Ethereum Classic could use the extra attention. The ETC blockchain holds a fraction of the value of the prevailing Ethereum blockchain, with a market cap of $631 million compared to ETH’s $45 billion. Furthermore, the network’s low hash rate has made the project vulnerable to 51% attacks, in which a user with enough rented mining power was able to rewrite the ETC blockchain on multiple occasions to inflate their own holdings and steal millions from impacted exchanges.