Why creating a new asset in an immutable ledger should not reuse an old name
19 Nov 2019Introduction
Yesterday MakerDAO reached a very important milestone. It introduced a new type of DAI stablecoin that can have multiple underlying assets used for collateral as opposed to the old DAI which could only be supported by collateralizing ETH.
Unfortunately at the same time they decided that they were so attached to the name DAI that they wanted to give the same name to the new token. And they could only do this by renaming the old token. Which is exactly what MakerDAO went with as you can see here.
This post is going to explain in detail why from a user’s or an application’s perspective the decision to change the name is quite bluntly put idiotic. Renaming DAI to SAI has zero advantages and introduces a long list of problems as seen below.
Problems introduced by renaming
In this section we will see a writeup of all the problems that the renaming is introducing along with a short explanation for each one.
Token Symbol
A contract deployed in the Ethereum blockchain is immutable. The DAI contract is here. If you try to read the symbol attribute it will be DAI. The symbol attribute is part of the ERC20 interface and ignoring it breaks that interface. You can not arbitrarily decide to now call the token by a different name (SAI) while the symbol of the token is DAI.
Centralized Exchanges
Right now centralized exchanges are in a tough spot. They have to perform DAI to MCDAI upgrades for their users and then decide on how to name the new assets. If an exchange intends to keep both tokens listed then the naming becomes a problem.
In the end the problem is pushed to the users as can be seen from above. For users SAI is DAI but if as a user you attempt to deposit what you think is DAI to Kraken you will lose it. If that does not constitute a UX nightmare I honestly do not know what does.
Decentralized Exchanges
Decentralized exchanges do not have much of a choice. They do not hold the tokens for their users so they will not be able to automatically upgrade DAI for them. They need to offer trades in both tokens and then the naming does indeed become a problem.
Software libraries
Software needs to be making assumptions for some basic things. One of these assumptions that software in our field make is on the immutability of contracts and by extension the token contract symbols.
Software libraries that made correct assumptions in the past will now break. As an example, one of the most used javascript libraries in crypto UI applications is cryptocurrency-icons. It pulls icons for crypto assets based on the symbol name.
At the moment, the DAI symbol returns the old logo of DAI and the SAI symbol will return an error. All projects using this library (and it’s a lot) will have to update whenever a new version comes out. At the moment there is no version supporting the new naming so all projects using it are displaying the wrong icons.
External APIS
A lot of APIs, for example price feeds such as cryptocompare have had DAI listed. Now they need to update their APIs in order to point DAI to the price of the new multicollateral DAI and create a new entry for the SAI token which points to the old DAI price. And that is hoping that there is no other cryptocurrency with the SAI symbol. I am pretty sure not every one of these price feeds will follow the new naming and then end-user applications will have to maintain converters between different price feeds using different symbols. It’s a mess.
End user applications
Every single end-user application that deals with crypto and DAI has to adjust. As an example we can take Rotki. If we go with renaming DAI to SAI we have to create a new release that will upgrade the user’s databases renaming the assets and rewritting history. If we do not we will confuse our users.
What is the solution?
At this point nothing can be done. The renaming has to go through since it has already started. But due to all the reasons outlined above it was a terrible decision.
The proper solution would have been a very simple one. DAI stays as DAI and is the symbol of the single collateral DAI. And then the new multi-collateral token is called MCDAI or well … anything other than the same name as the previous token.
Conclusion
Despite all the problems with the renaming the achievement of having a multicollateral DAI is something to be proud of.
All of the above problems in isolation do not sound really bad but if you sum them all up it ends up as a nightmare for all actors involved. It’s a mess for application developers, a mess for users and a mess for service providers. And all of these could have been avoided by simply doing the obvious thing and providing a new name for a new token!
For Rotki a blog post will follow explaining how we will handle the switch from SAI to DAI and how it will be reflected in the databases of our users. If you liked this post and have not tried Rotki yet you can get the latest release from here. By using Rotki you can take ownership of your financial data! Please try it out and provide us with feedback so that the software can improve.