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- DAI is a stablecoin based on the blockchain of Ethereum regulated by MakerDAO, a decentralized autonomous organization, and Maker Protocol.
- MakerDAO, a type of organization that manages itself in a decentralised way, through the utilization of smart contracts.
- As of this writing, the stablecoin was range bound at $1 with a market capitalization of $9.3 Billion.
What is DAI?
Basically, DAI is a stablecoin based on the blockchain of Ethereum, whose development and issuance is regulated by MakerDAO, a decentralized autonomous organization, and the Maker Protocol.
DAI’s cost is softly attached to the USD, and is collateralized by a blend of other digital assets that are deposited into the vaults of smart contracts on each instance a latest DAI is minted.
It is also essential to distinguish among single collateral DAI, an initial version of token which can be put as a collateral against a single crypto asset only and a Multi Collateral DAI: DAI Savings Rate are also one of the features not supported by Single Collateral DAI, that enables the clients to earn savings through holding DAO. Multi Collateral DAI enables the clients to generate DAIs through the leverage of assets that have an approval of the “Maker Governance.”
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Why is DAI Distinct?
Major benefit of DAI lies in its attachment to the price of USD. Cryptocurrency market is infamous for its volatility even with its highly liquid largest coins like Bitcoin, as it can also experience changes in its prices both positively and negatively within a single day. In such situations, investors and traders are predisposed naturally to add secure assets in their portfolios, whose stability of price may assist in offsetting prominent fluctuations in the market.
Stablecoins are such types of assets, where DAI is one of them. These are the digital assets whose price is attached to the assets that are stable, like fiat currencies Euro and USD.
Another prominent benefit is the DAI is not not regulated by any private organization, but by a DAO through a protocol of software. This is why the burning and issue of the tokens is regulated and openly recorded on the self executing smart contracts powered by Ethereum, making the whole system crystal clear and less vulnerable to corruption.
Additionally, the method of development of DAI software is regulated in a democratic way, through direct voting by the token ecosystem’s regular participants.
Should We Purchase it ?
Major advantage provided by the DAI is that it offers crypto asset’s transactional advantages with almost no volatility, due to its pegging with the United States Dollar. Another advantage of DAI is how broadly it is integrated inside the blockchain of Ethereum. Once it is purchased or borrowed, it can be utilized in many dApps including Non Fungible Tokens, Decentralized Finances, Gaming and more.
As of this writing, the stablecoin DAI was range bound at $1, with a market capitalization of $9.3 Billion and a 24 hour volume of $433.5 Million, which was down by 23.31%.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
