Dai 1.0

Global Settlement

A key feature of Dai is the possibility of cage: shutting down the system and reimbursing Dai holders. This is provided for easy upgrades between Dai iterations, and for security in case of implementation flaws both in the code and in the design.

Top

An admin can use the top contract to cage the system at a specific price (dai per gem), or by reading the last price from the price feed.

First, sufficient real gem collateral is taken such that Dai holders can redeem their Dai at face value. The gem is moved from the tub to the tap and the tap.cash function is unlocked for Dai holders to call.

Any remaining gem remains in the tub. PETH holders can now exit. CDP holders must first bite their CDPs (although anyone can do this) and then free their PETH.

Some important features of cage:

• Dai holders are not guaranteed their face value, only preferential payout.
• the full real collateral pool is tapped to make Dai whole. PETH is a risk-bearing token.
• PETH holders will receive a poor rate if they try to exit before all CDPs are processed by bite. To prevent accidental early exit, top.flow is provided, which will only enable exit after all CDPs are processed, or a timeout has expired.

The top also serves as a useful frontend entrypoint to the system, as it links to all other components.