Crypto with a stable value is not new. Tether is the oldest and largest stablecoin accessible. Also fighting for the sturdy cryptocurrency crown are stable coins such as USDC, PAX, Gemini Coin, and Facebook’s planned Diem (previously Libra). DAI alters it.
While many solid digital currencies exist, only one is widely utilized, decentralized, and trustless. This article explains why DAI distinguishes out among the stablecoin crowd.
DAI is an Ethereum ERC20 token with a fixed value of $1, and it also powers MakerDAO’s loan system. A MakerDAO loan creates DAI. It is the money consumers lend and borrow.
DAI is established as a stable Ethereum token. It may be spent and transferred simply between Ethereum wallets.
The current version of DAI is termed multi-collateral DAI since it allows several crypto assets to create DAI. SAI. Single-collateral DAI is the former version of DAI that could only use ETH as collateral. BAT (BAT) is the first crypto asset with approval in the new multi-collateral DAI scheme.
Current CEO Rune Christensen founded DAI which is a MakerDAO product.
Smart contracts that execute automatically control the price of DAI. Maker (MKR) tokens burn or generate to stabilize the price of DAI.
MakerDAO’s DAI
MakerDAO’s algorithms automatically maintain DAI’s price. Therefore no one is trustworthy to keep it stable. If the system operates as intended, one DAI equals one USD, Holders of MKR gain.
DAI’s price has stayed steady for nearly three years, fluctuating barely slightly from one dollar.
DAI can also be wrapped in smart contracts and modified for other purposes. For example, xDAI puts DAI on a low-cost sidechain to speed up transfers and payments. With Chai and rDAI, users may put DAI into an interest-generating pool and manage what happens to it.
Because DAI is an Ethereum token, anyone can use or construct it. DAI is an ERC20 token in any dapp that requires a stable asset or payment system.
You can take out a loan on MakerDAO’s Oasis platform to get DAI. A centralized exchange like Coinbase or similar can also trade DAI. DAI forms when taking a MakerDAO loan out. Consequently, the coin disappears after repaying loans.
DAI is a steady hedge against the volatility of prominent crypto-assets like Ethereum and Bitcoin. DAI’s constant value is helpful for investors or traders expecting a market decline.
Because DAI is so stable, it is an excellent crypto asset to spend. The Coinbase Card also lets customers spend DAI and other crypto assets on a Visa card. In the UK or Europe, you can use the Monolith Visa debit card to pay DAI.
MakerDAO is working hard to establish DAI as the world’s first unbiased currency, starting with a logo that should be as familiar as the dollar, euro, and pound.
Millions of people must embrace and use DAI to become the first trustless mainstream currency–a feat requiring branding, marketing, and education. No other stablecoin is in a better position to make this happen.
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