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What is DAI?
This is an ERC-20 that’s on the blockchain of Ethereum and is a stable coin equal to the USD. It’s also the key to the lending system, MakerDAO. Dai is developed when someone acquires a loan on the MakerDAO platform. It is the currency that people borrow and pay back.
As soon as DAI is developed, it works just like a stable token of Ethereum. Users can use it to pay for products or services, and they can easily transfer it between wallets of Ethereum.
Who created DAI?
MakerDAO is responsible for the creation of DAI, and it was invented by the present CEO, Rune Christensen.
The latest version of this token is basically an updated variant of the stable coin known as multi-collateral DAI that was used in creating DAI. DAI has an old version which is now known as SAI, also called single-collateral DAI, since they can only create it when the collateral is ETH. In this new multi-collateral DAI system, the other accepted cryptocurrency asset apart from ETH is BAT (Basic Attention Token).
What makes DAI so special?
It has a stable price that’s possible via a smart contracts system that automatically executes itself. If DAI’s price is at a figure too far for one USD, MKR (Maker) tokens are created or burned so the price of DAI can be stabilized.
The algorithms of MakerDAO manage DAI’s price automatically, so there’s no need to trust one person so the currency can be stable. If the proposed intent of the system works, and one DAI is equivalent to one USD, holders of MKR will benefit because there’ll be a decrease in the entire supply of MKR, and this will make MKR more scarce and valuable.
Till today, DAI has stayed stable for more than three years with just some little fluctuations from its pegged one USD.
How is DAI created?
DAI is produced when an individual procures a loan on MakerDAO. When the person pays back the loan, DAI is destroyed.
How can one get DAI tokens?
The straightforward way to do this is just to take a loan on the Oasis platform of MakerDAO. You’ll also be able to trade DAI on the platform or make use of some centralized exchanges like Coinbase.
What are the uses of DAI?
One of the things you can do with DAI is use it as a counterweight or stable edge against other cryptocurrency volatility. Since DAI is stable, it means that it’s excellent for traders or investors that believe that the market will soon crash.
The stability of DAI also makes it one of the best cryptocurrencies to spend. With the Coinbase card, users can spend DAI and other cryptocurrencies when they convert the currency into fiat. There are also other cards from crypto exchanges that allow you to spend DAI wherever you are.
The Future of DAI
MakerDAO has continued to work tirelessly to make DAI the “world’s first unbiased currency,” and it is beginning with its logo that it wants to be recognizable and ubiquitous as symbols for the USD ($), EUR (€), and GBP (£).
While trying to be the foremost trustless mainstream currency, DAI needs to be used and adopted by a whole lot of individuals. Something that doesn’t only need branding but also education and marketing. Although this task isn’t easy, there’s no other stable coin in a better state to make this a reality.