SingleCollateral

SingleCollateral refers to the original design in the MakerDAO system for issuing the DAI stablecoin using a single type of collateral, typically Ether (ETH). In this design, users opened a collateralized debt position by locking ETH in the system and could generate a debt token against the collateral. The amount of debt that could be drawn depended on a collateralization ratio, which had to be maintained above a minimum threshold to avoid liquidation.

In the SingleCollateral framework the debt asset minted against collateral was Sai, not DAI. If the value of the collateral fell and the position’s ratio dropped below the required level, the system could liquidate the collateral through auctions to repay the outstanding debt. The process was governed by a set of rules and parameters controlled by MakerDAO’s governance framework, including stability fees and collateralization requirements.

Historically, SingleCollateral was the approach used before the introduction of Multi-Collateral DAI (MCD). In 2019, MakerDAO launched MCD, which allowed multiple types of collateral to back DAI and introduced a revised debt system that minted DAI rather than Sai. Existing Sai-based CDPs were migrated to the new system, and the old single-collateral design was gradually retired. Today, the standard DAI in production is powered by the Multi-Collateral DAI framework, while SingleCollateral is viewed as a historical reference point for the project’s early architecture.

Overall, SingleCollateral represents the initial, single-asset-backed phase of MakerDAO’s evolution toward a diversified, multi-collateral framework.